Vincent Maosa: Let all repatriate cash held in secret offshore accounts

In April 2017, the Buy Kenya, Build Kenya campaign strategy was formulated following a presidential directive to encourage consumption of local goods and services.

A brainchild of President Uhuru Kenyatta’s government, it envisaged enhanced competitiveness of local firms; expanded local productive capacity through increased investment; accelerated industrialisation; mitigation of adverse impacts of trade imbalances; and creation of employment opportunities for Kenyan youth.

A conscious effort to promote the Kenyan brand and instill patriotism amongst the citizens, its formulation and implementation demonstrated the government’s resolve to shape the country’s destiny by enhancing local investment to stimulate economic growth and marked a transformative journey towards sustainable local-driven development.

The same philosophy that undergirded the conceptualisation and operationalisation of the initiative should inspire wealthy Kenyans with huge cash deposits in offshore accounts to repatriate the funds in order to promote economic development.

In 2007, a report by risk advisers Kroll and Associates commissioned by then-President Mwai Kibaki detailed how at least Sh130 billion was looted and stashed in offshore accounts. A 2018 investigation by an American think tank National Bureau of Economic Research (NBER) showed Kenya’s super-rich held more than Sh5 trillion in offshore tax havens.

Following a 2016 amnesty by then-Treasury Secretary Henry Rotich, Kenyans wired back Sh1 trillion but it was hard to determine where it went.

Negative publicity

The latest Central Bank of Kenya financial stability report shows foreign financial institutions reported balances of Sh247 billion at the end of last year, up from Sh120 billion the preceding year, a 106 per cent increase in cash deposits held with foreign banks.

Despite the negative publicity which tax havens have received in the recent past, they are legal and operate within the law. Reasons why the rich prefer offshore tax havens include the friendly tax laws, flexibility in registering offshore companies, high degree of privacy and safety of their investments.

Repatriating the cash will benefit the society by, first, dramatically raising and strengthening liquidity in the banking industry, which will invigorate lending to the private sector and spur economic growth, creating job opportunities.

Secondly, it will help local banks to build a lending war chest to fund big-ticket infrastructural projects, saving us from foreign debt. They will build up sufficient liquidity buffers to withstand economic shock.

Thirdly, there exists a nexus between wealth and political power. It is in their best interest that both political and economic stability prevail in order to safeguard their investments.

Lastly, it is a great act of patriotism and demonstrates confidence in our country’s economic prospects. It will reinforce the Buy Kenya, Build Kenya message and help local industries to flourish.

[email protected]. @ndegemaosa