Wednesday, March 21, 2007

Brain drain, brain gain

we had a heated debate with two of my colleagues the other day concerning reports that most Kenyans were leaving the country for the western states. the report had indicated that for each doctor that Kenya lost, 36 million bob went down the drain and for each nurse 30 million. the concern was that we were ending up with fewer health workers per capita and that was quite worrying. my position was that Kenya it was important to see this as an opportunity instead of seeing it as a curse. all we needed to do was to trade in our personnel. ie train more doctors instead of teachers and export them to the west. one friend suggested that we could draw a contract where the exported health workers are paid by the Kenyan government and the benefiting foreign institution pays the Kenyan government. how about that? just the same way consultants work with their sponsoring consultancies.

my other argument was that in fact, we have more nurses than we can afford to absorb and thats why there are so many of them tarmacking or earning peanuts. instead of wasting these talents and trainings, we could instead facilitate their posting abroad and benefit from their remittances back home. its not lost to anyone that Kenyans in the diaspora never forget their mother land and normally send back billions of shillings each year. In fact the nation has reported today that they have become the top foreign exchange earner for the country toping traditional commodities eg tea and coffee, and even tourism!

further, having more professional Kenyans out there is also good for the country politically since these guys can influence the international opinion about Kenya and help grow the domestic industries. if Kenyans abroad decided to market Kenya as the place to be for holiday, the place to get vegetables, the place to buy fish, the place to get sports men, the place for shooting movies etc, you can just imagine the explosion we would have. all we need to do is to encourage them to be positive about this beautiful country. of course i know we have a number of problems that most diasporians actually ran away from but then you don't solve problems by focusing on them. thats why i don't believe in poverty eradication, rather wealth creation is more like it.

Value of bonds yesterday we gave a 101 on bonds and what they are. today we can mention here briefly how to determine whether you are getting value for your money. there are several ways to determine that but the one i fancy is to find the NPV of the bond. normally you would work out the present value of all cash flows expected from year 0 to maturity. the way to do this is to discount the initial outlay (the cost of the bond) which will be -ve in this case, and all the other inflows (the coupons and the final amount) based on the rate of return.

if the NPV is -ve then you know the bond is over priced and you should toss it. if the NPV is +ve then you should take it up without blinking. else if the NPV is 0 then you know you are not getting a bargain but a fair value for your money

odegle tip of the day MainaT actually reminded me; the 14.5% promised by the CBK is quite juicy and you should strongly consider if you can get it


  1. Od, I actually think that we should go further than that and instead of asking for aid/loans/grants from the West, just ask them to offer scholarships, on-the-job training to an agreed quota of our graduates and KCSE students each year. These guys will not only send remittances, but will eventually export their expertise to grow our nation.

  2. hmmm, youre idea is interesting!but all this i.e remittances, selling the country etc banks on kenyans patriotism!i wondeer if it can be sustained...guys are doing it now, but when i look at some young chaps i dont know!
    i like that scholarships idea.

  3. Kenyan salary huko majuu wouldn't count for much, and I'm thinking if the govt paid the professionals in their terms, there wouldn't be enough left to pay guys here.

    I'm of the opinion that guys working abroad should be given more opportunity to remit their earnings cheaply and efficiently as well as contribute their expertise once in a while in thinktanks and projects.

  4. Dont forget Bonds dont keep pace with inflation.If we have high inflation u r hammered.

  5. I am with you on this one. We should stop complaining on loosing nurses to developed nations. Expatriates' income (dollars, pounds or euros) end up benefiting destitute Kenyans.
    Nothing will stop nurses exodus to Europe and North America. Not even a tenfold increase in their Kenyan salaries. There is a rising demand for nursing services as the so-called baby boomers retire to nursing homes.

    The exodus should be good news for Kenyan nursing colleges. A forward looking college should, for instance, train its students for the United States' LPN, RN and CRN nursing certifications. Training for this courses cost a fortune in the US. An entrepreneurial Kenyan lady in Atlanta has been training fellow Africans. Her two-weeks long lectures cost $600; she's among the chepest sababu yeye ni mutu ya nyumbani. Ain't that a killing?

    Bottomline, there is money to be made in Kenya's nursing training industry. The government has to stop baby-sitting its colleges. They can only open their eyes when forced to be self sufficient. The same should happen to all institutions of higher learning.

    ODNI--Sorry for blogging. Your thought of exporting nurses made my mind see dollars and euros waiting to be scooped. Iko pesa kila mahali lakini tunaregarega tu!

  6. @mainaT, actually i think we no longer get loans from these guys but yes i can see the idea taking shape!

    @MShady , in fact i think the younger generation will do it more. patriotism is becoming a fad these days. the remittances are growing each year. there is also growing interest in ones origin.

    @Mwasjd , my suggestion was that these countries pay Kenyan govt who in turn pays these guys. of course what we get from the foreign countries must cover the cost of paying the professionals!

    about cheap ways to remit money back home, i am with you 100% but i also think this is where our banks come in.

  7. @pesatu, thank you for that reminder. very useful when analyzing a bond or a bill.

    @kenyanomics, your blog on my blog is welcome! I like the way you have put lots of flesh on the idea. we only need to stop regaregaing and scoop the money. am seeing Kenya become a human resource capital of the world or a consulting capital of the world the same way India became the outsourcing capital of the world. we need to use this opportunity to achieve the kenyan dream of 2030

  8. BBC has a report on mass exodus of British nurses to Australia and New Zealand.
    The UK expects to have a shortage of 14,000 nurses in the near future. That should be a boon to Kenyans.

  9. Odegle:

    Powerful statements that you have made. It is quite interesting to note that at the recently ended Kenya Open for Business forum that took place in Atlanta, GA USA over the weekend your sentiments were echoed by several of Kenya's ministers. In fact there was even a speech entitled from Brain Drain to Brain Gain.

    I agree with you wholeheartedly. Plus, with the western countries experiencing near 0% and some negative population growth, I think that the western countries will soon begin to get much more aggressive about overseas recruitment. It will become a fact of life that African countries will have to become accustomed to dealing with. The best way as you said is to allow the expatriates to help build wealth and knowledge pools in their countries of origin.

    This was the whole theme of the Kenya Open for Business forum that I attended this weekend. You can catch more of my thoughts on the blog...

  10. @Benin, you have captured this event very well in your blog. i am hoping that we will get ready enough to take advantage of all these. i hope Africa will not lose out again. the US for instance has a way of luring great minds with offers of citizenship so that their home countries do not benefit. i hope Kenyans in diaspora will be able to read through these conspiracies and stick to their mother land the way Oliech did


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