The Math Causing Us Much Pain During Lockdown and Beyond

Have you ever posed for a group photo and all smiles but the cameraman bids his time until you develop a permanent smile courtesy of a muscle cramp? It is the equivalent of a hanged computer or phone. You look happy on the surface but deep inside, you are hurting and are not ready to openly share in your pain. That long pose is what the lockdown is to those left without alternatives.

How come when the Government statistics tell us that the major economic indicators are sound and that the prospects remain positive, the downtrodden are crying for lack of opportunities?

We are in one country but with three distinct experiences.

The first, are those that ooze with confidence. Their businesses have grown during the pandemic. Most of these have harnessed the power of robust technologies. Twiga Foods, Safaricom and oil marketers are part of this group. Marginal dents in business revenues seem to recover pretty fast for this group of organisations. Plenty of planning, faith and resources went into these operations. For them, good business is based on reasonable turnover. The economic outlook from this lot is that Kenya is growing and perhaps handling the lockdown setbacks pretty well.

The second group comprises the "Songa Kando Kwani Uta do?" entrepreneurs of different shades that include tenderpreneurs and operatives blessed with access to the high and mighty. This group enjoys growth rates higher than the economy and unlike those who believe in a consistent turnover approach, they believe in the one big kill and if possible, big bang repeats. The economic outlook for this group is of a happy-go-lucky kind and is dictated by kingpins who politically induce opportunities for the boys and girls in the loop. This group two, hardly spend and starve the economy of money circulation.

Let us not rush, before we get to the third group, for a moment imagine that the first group are the shirt and the second group are the trousers, the financial sector is the belt that neatly holds them in place, for they come in between the first two groups. They enjoy a little of everyone's pie and as the first two see this sector's broad smile, the third group receives its loveless broadside as is manifested in the Monday papers nearly a dozen auction announcement pages.

The third group comprises those that live in the daily struggle domiciled in the part of Kenya that most can identify with. These are the majority of the population. Vilfredo Pareto the Italian civil engineer, sociologist, economist, political scientist, and philosopher, came up with the 80/20 rule, and in our case, about 80% of the population contributes nearly 20% of GDP. Group one and company contribute about 80% of GDP and are easy on the eye and palm of the government from a tax revenue perspective.

The irony here is that 80% of the population need 20% of the money in circulation to feel the same way as groups one, two and the financial sector do when they command 80% of what is in circulation. But is group three's 20% portion in circulation within them or away from them? We shall come back to this but first, let us understand something important.

According to the Intelligent Economist site, Land and natural resources, capital, labour and entrepreneurship are considered as the factors of production. Let me add that capital can either be financial or political or both. Without these, one cannot muster any meaningful chunk of the economy. All these are barriers to entry for the innocent but ambitious fellas full of enthusiasm.

The part where most people in group three can participate in is as part of the labour force. This aspect is under heavy threat from technology. Even profitable organisations are laying off staff as they adopt newer technologies. Without jobs, they cannot be unionisable and are in limbo. Those that dare get into business, will soon enough but sadly find out, that the new business mortality rate exceeds 90% after consuming all their capital even before making any demonstrable inroads into the market. Many here, own land but they only subsist as these pieces lack the economies of scale needed to sustain meaningful revenues.

That the population of the 'Kadogo' economy is growing in a manner that many are welcomed into the fold at a faster pace now, tells us that the experiences gained by the government in managing the refugee camps may come in handy, now that many are unable to fend for themselves.

The third group is caught up by many things. They are the victims of greater efficiencies employed by organisations as their modus operandi. When 200 jobs vanish because of technology, the resultant savings go to group one, and with that, the traditional 20% thins out. It may now be a 90/10 scenario. Group two are rich and powerful and hardly spend so very little circulates from them. As the Dooleys song - "The chosen few" lyrics reveal, we conclude that there can never be a forced entry. It is by invitation.

So now add a lockdown to another lockdown in opportunities and you have no money circulation in group three. The only way out for group three is through unity of purpose. If they work as a unit, then they attract financial resources whilst they provide the required labour for their own economically productive thing. Violence will chase away the shyest thing ever known, the economy.

As with anything in life, be it systematic or biological, for it to produce, it must be heated up in the right way. We are now a knowledge-based economy and knowledge is power. The sooner group three appreciates and takes the steps to search for and receive refined knowledge, the faster this will get them mainstreamed (back) into the economy. Knowledge is the necessary heat to meaningful productivity. Knowledge is now coming at us faster than at any other time in human history. Avoid it and you will be left behind.