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Columnists

Sanctions would also hurt donor interests

I have been analysing the forthcoming elections without prejudice. I want to state that no country in the world will issue sanctions against Kenya. I developed this thought when the Nairobi Securities Exchange became one of the best performing stock markets in the world.

There are so many multinational companies in Kenya. It is good to be truthful to ourselves. Debt and Interest rates: The national debt of the United States of America is $16 trillion.

The GDP per capita of this country has been declining and this poses a great challenge to the Americans to pay their debt. The federal interest rate in America ranges from 0-0.25 per cent, In Europe, the European Central Bank has set the interest rates at 0.75 per cent.

The Central Bank interest rates in Kenya are 11 per cent. These countries are lending money to Kenyan banks and micro-finance to make huge profits unaware to Kenyan citizens through Carry trade. I pose a challenge, who doesn’t love money?

Outsourcing: It is impossible to compare the cost of labour between Kenya and the West. In the US, Europe, Australia, it costs $10 an hour to hire a labourer .In Kenya, It only costs $3 to hire a labourer the whole day. It is therefore difficult for the export companies in the Kenyan horticultural, floriculture, and manufacturing close their shops in Kenya which has a port and is centrally located geopolitically.

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It is extremely difficult for these companies to be profitable in their home countries. They cannot transfer their operations in china due to the rising middle class and increased wage index.

Minerals: The Kenya government in collaboration with Tullow LLc reported oil discovery. A barrel of oil costs $88-90. An oil tanker has a capacity load of one million barrels. If Kenya starts exporting five million barrels of oil in one week, it totals up to more than $400 million in a week. We also have Gold, Coal, Rare Earth Minerals, Iron ore and Titanium. This is where foreign interests come into play.

Japan: I know you most likely used a Japanese car in the morning and your garage is full of Japanese spare parts. It means you have employed so many people in the manufacturing, shipping and insurance industry in Japan. How will they support sanctions and create unemployment in their country?

The writer is a lawyer and financial markets trader.

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