How to end poverty and unemployment in Kenya

 

How to end poverty and unemployment in Kenya

Unemployment and poverty has plagued many African countries including Kenya for many years. The situation has been made worse this year by the pandemic. Unlike covid, unemployment has a quick and easy solution

Step one: Create a digital currency

If you have ever used Bonga points by safaricom or Ziada points by Telkom or points that Airtel offers(if they have), then you have used a digital currency. These points can be used to buy airtime, bundles, phones and in some cases food. Many people use them and they accept them as they would accept cash. Has anyone ever stolen your bonga points? The pain you felt was equal to the pain you feel when you lose cash. Millions of people in Kenya already use these points and they don’t need smartphones to access these services. The challenge with these points is that many people don’t have thousands of them and this brings us to step two.

Step two: start a company that distributes a digital currency

Imagine if you had 200,000 bonga points. There is a lot you can buy with it. Therefore, someone (not me) needs to start a company that will create and distribute a digital currency similar to the points I have mentioned above. This company will work as a bank. It will distribute the digital currency to those who will open accounts in that company. Every account holder will require to make a daily deposit so as to qualify for loans at the company. This daily deposits will help the company to have a cash reserve. This will help the company be able to meet their expenditures. For someone to qualify for a loan, they have to deposit a certain amount of cash e.g. for you to get 50,000 points, you need to deposit 1000ksh. When you then pay back the loan, some of the amount can be in cash e.g 5 percent of the loan amount can be paid in cash. This will further help the company have a cash reserve. The value of the digital currency can be equal to the value of the shilling.

Step three: convince people to start using the digital currency

For the points to be accepted, you need businesses to accept the points as a means of payment. For example, when Mpesa started, you could not send money to someone who was not registered to the platform. Once people saw the service was quick and efficient and also relatively safe, they quickly jumped to the service. The same will be true with any digital currency. It has to have the same qualities. What about those who would want to jump from digital to cash?

Step four: make it easy to convert the digital currency to cash

A system can also be created whereby agents can be deployed at the grassroots so that once you sell goods or services using digital currency, you can then convert it, at the agent shops, into cash. This however can be at a discounted rate so that the agent also profits e.g. if you give him 1000 points, you get 800ksh. The agent can then sell points at a profit e.g. the 200 points he then sells at 150 ksh. Also, if you have taken a loan worth 200,000 points, you can convert some of it into cash e.g. 50,000 and spend it on outlets which do not accept the points. 

What are some questions that can be raised about this idea?

Should the government do this?

The government can and I’ve written another article about how it can implement it. Some European governments have given electronic vouches to their citizens so that they can redeem in local tourist site thus propping up their economy.

Will people accept this idea?

I think so. Because right now, the Kenyan economy has a lot of debt. The developed nations are also struggling with their economies. We have to come up with a local solution to the economic problems that we have.

Benefits

1.     1.  Everyone who has a phone can benefit. Right now, not everyone can access money from a bank or a money lending institution. But with a digital currency, it creates another platform for everyone to access funds to start their venture

2.     2.  It’s difficult to do business when many people don’t have money. With the digital currency, businesses will be revived.

3.      3. Since the digital currency can only be used in Kenya, it will boost Kenyan businesses. Also you cannot steal it and put it in an offshore account

4.      4. It’s a quick and easy way to boost the economy

 

Conclusion

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https://tunalenga.blogspot.com/2020/12/how-to-end-unemployment-in-kenya.html