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