One of the perks of pursuing an economics degree majoring in finance is getting to say you pursue an economics degree majoring in finance. That’s just about it. Well, and a whole plethora of knowledge bestowed upon me by dedicated professors.
Then there’s also the benefit of looking at the world from an economics point of view and getting to see how minor changes in various sectors in the economy affect the whole country. It’s no longer about being optimistic or pessimistic. You no longer look at the glass and how full it is, instead you look at stuff like where the glass came from, what fills it, where does that come from, can you control it, or can you make more of it etc.
After my first semester, business news started making sense. I began understanding why effects are never immediate and it led me to appreciate things on a broader level. Simple things like living within your means and saving were things preached to us by financial advisors but it now made much more sense. Fast forward a few years later and the economy is growing. There is still a lot that can be done to improve the growth rate including creating a universal, consistent and affordable power source.
This takes me back to one of those hot afternoons where I’d sit in class almost bored to death as an archaic lecturer in a brown oversized suit would spew out theories from the days when Nikola Tesla was still experimenting alternating currents. This one particular afternoon I was attentive – blame my plummeting GPA and the lecturer kept talking about Harrod-Dommar. This is a simple model on savings and investments dictates that a country should save part of its national income which would be used to replace capital goods. This basically relates capital investments to saving. So basically to achieve economic growth we need to increase saving and ultimately increase investment.
One sector that can largely contribute to economic growth is the industrial sector. However, faced with a myriad of problems like fluctuating fuel prices which affects cost of energy the cost of production tends to change. Again, this goes back to one of the most basic economic principles that relates prices to demand. With changing production costs price changes, with price changes theirs a change in demand. What this means is if prices go up demand goes down. Less is sold, less is produced and less is invested.
Here in Kenya, the industrial sector contributes largely to our economic growth. Therefore, the success of such industries is a crucial backbone in the growth of our economy. A universal, consistent and affordable source of energy would go a long way in stabilizing this industry. As a result there will be lower stable prices. Lower prices means the country spends less and therefore shows an increase in real income. With an increase in income Kenyans are able to save. As seen earlier savings is directly related to investments. Therefore, as a whole there will be a betterment of lives and a steady growth in the country’s economy. So let’s go on and power Kenya. Here’s to universal, consistent and affordable energy.