WHY RAILA'S 6K PROMISE TO VULNERABLE FAMILIES WILL CAUSE A COBRA EFFECT?

 As Mwihaki Hegel Fredrick , am a staunch supporter of Azimio la Umoja coalition party. The support and love for the outfit is ingrained in my blood vessels. I always don't like sycophancy to blind fold me however much they say politics is partisan. I always measure the partisanship and that's why , I will take this opportunity to critique Raila Odinga perverse incentive that is targeting the most vulnerable citizens in the society by offering the sh 6000 stipend every month. A perverse incentive is an incentive that result in unintended negative consequences due to actions people take to receive the incentive.

A German Economist Horst Siebert coined a phrase the cobra effect to explain this kind of incentive that Azimio la Umoja coalition party presidential aspirant Raila Odinga is planning to introduce. It is a good one because it is one of the programmes that a social welfare States brings forth but they are very costly and can lead to disastrous effects. What is Cobra effect? It is a phenomenon that occurs when a policy intended to solve a problem actually make it worse or even creates an entirely new problem. It can also be  said to be when people are incentives to make the problem worse usually by a Government. The primary cause of the cobra effect is over simplification. If a complex problem is reduced to one factor for purposes of measurement , then , other factors will play a higher role in determining outcomes than expected.

Then , where did this phrase , cobra effect originated from that Siebert used it in his Economic analysis. It stems from India during the British occupation of that Country . India was colonized by British and attained its independence in 1947. They had a major problem which was the cobra menace. The British government tried to tackle this problem of venomous cobra snakes by offering a bounty for every dead Cobra. In response enterprising locals started breeding cobras for the income. When the government became aware of this , they cancelled the bounty program which resulted in the cobras being released or let loose into the streets of New Delhi as they were now worthless without the bounty system.

To help prevent this from happening again , the British government required that all snake heads be presented with the skin still attached to prove that they had been freshly killed. People resulted collecting dead snakes from around the city and sewing their heads back before turning them in to get paid. The British government was forced to cancel the whole program altogether which caused the snake population to return to its previous state and even worse.  The cobra effect is often used as an example of unintended consequences. It also highlights why it is important to think through solutions before taking action and why implementing policies without fully understanding their implications can be disastrous.

On this issue of 6K from Raila Odinga , it is a policy he should retreat from. It is a good social welfare program but our economy cannot sustained it. We don't want to create a dependency mentality and a lazy population who will be complacent to work hard and think creatively in nation building because , by the end of the day , they will get a cash transfer from the national Treasury. The current Government is running a cash transfer program called Inua jamii where , senior citizens aged 70 years and above get sh 2K each month. It is a program that president Uhuru Kenyatta regime roled out back in 2017.

Our economy is struggling and it is good to be honest. That social welfare program will make Kenyans to dig into their pockets deeper than they are doing now. The cost of living is skyrocketing each day. The price of essential household products has hit the roof. The government cannot offer more subsides and especially on price controls. That can be another perverse incentive that can be very detrimental to our already ailing economy. Am ain't to point a figure to the government in a negative way because , globally , even the most developed nations are battling mild inflation in their economies. US is doing so. In UK , the Bank of England Governor said that , the interest capping will be increased inorder to address the fiscal and monetary abnormalities the economy is battling.

Azimio la Umoja one Kenya Alliance coalition party should reconsider that promise by subjecting it to serious Economic and policy Analysis. It shouldn't be rushed inorder to look attractive and populistic yet , it will be the cobras in our homes and our pockets. Azimio la Umoja is a serious outfit that is aimed at making the many wrongs committed by the previous regimes right. So , inorder to instill confidence on Kenyans , it should reconsider it. From where am seated , am resonating very well with Baba care medical scheme than am resonating with the 6K cash transfer program to the most vulnerable citizens in the society especially those who live in favelas ( slums).

Raila Odinga and Martha Karua should promise Kenyans especially those in the lower stratum that , it will create a conducive environment for them to live to decent life. Kenyans only need to be provided with the the line and the hook and they will do the fishing themselves instead of being given the fish. We don't want to create a beggar thee Economy. Kenyans are enterprising people. They only lack a start up and a conducive environment. Let the informal sector be uplifted. The Medium and Small Micro Enterprises ( MSMEs) be released the many regulations and taxations from the tax man even before their get a footing.

The agricultural sector must be look in deep. Kenya's economy is Agricultural based but we also need to diversify to manufacturing. Let us create a conducive environment that will attract investors yo come up an set up their businesses and factories/ industries in Kenya. This is one way of creating jobs. The private sector supplements the government in creating jobs by having more local and international investors setting their businesses in our economy. I hope all this issues , which need robust policy checks will be domiciled in Raila's presidential manifesto. Inawezekana!!!