@murchr..these economics are quite deep, you will have to make Google your friend to grasp the concept.Let me give you pointers to use for your research. 1. Government spending to buy land in Kenya will eventually result in rapid land price appreciation. Land is the most important factor of production so if the price goes high, this means less productivity. Not really true; it depends on what it does with this land. If Govt. decides to buy ALL kibera land and build 1000 Times Towers for residential purposes, what will happen to the price of land? It will go down. iF Govt buys all Kibera land and builds skyscrapers, cost of rent will reduce and banks that have financed real estate investoers will collapse, leading to a colapse of all the economy. 2. Its true economies are stimulated by Govt spending. Govt spending should be in areas of improving infrastructure eg roads,education etc, not in ways that lead to inflation hence poverty. Government spending in roads and education can also bring about inflation. While government spending on private sector areas like the production of goods like Maize and beans, can bring about lowers prices and a better functioning market. How can govt spending in roads and education bring inflation? Explain with examples. 3. Govt is unique in that it has capacity to print money hence alter the economy hence inflation. If Govt is allowed to compete with its citizens, this can create situations where it just prints money, buys everything, resells, taxes its citizens even more. In such situation, citizens will take years before they realise the cause of the high inflation is govt printing money etc. Government ALWAYS competes with its citizenz - even in the good old USA; in R&D, check out the TVA. Furtheermore, printing of money will not necessarily cause inflation...it all depends on the economy. Give examples of Govt competing with its citizens. Unless in banana republics, no where else citizens can allow got to compete . Govt only provides goods and services that private sector cant eg public hospitals,schools, roads, etc.where there is no direct competition. As long as Govt spends money on improving factors of production ,i.e land, capital and labour, its ok. By buying LAND and improving it's usage, government is increasing the Supply of LAND. Remember in the economic sense, Land is not a plot.... Land is constant and cant be increased or decreased. It can only be improved thru infrastructure or demolished thru toxic nuclear waste dumping. Govt owns most of the land in Kenya . Govt can use compulsory acquisition law to acquire any land in Kenya for public use. For example, in Konza, Govt spent billions to buy land. An acre jumped from 100k to 4 million hence unaccesible to many productive Kenyans. If the govt bought the @4M, that's corruption, and not about economic theory. Govt should not even be buying land in the first place, as happend in Konza.Machakos city land was not bought hence viable. If Govt spent the billions in infrastructure, the increase in land price could have been gradual and balance out with the new increased productivity. In Nairobi, GVT is not buying any land....why is the price escalating? Govt needs to step in and increase the supply of land by building a new city in eastlands. Nairobi land price escalation is due to real demand due to lack of Govt to increase infrastructure to exapand the city hence no space for expansion. Nairobi CBD can only expand to upperhill with very narrow roads. Govt does not need to buy land in Eastleight and build a new city. All it needs is create Zoning laws that say in Eastleight, all new buildings must have 10 floors and above, with several floors of underground parking etc etc. Govt can then upgrade the infrastructure. After this, Eastleigh will then naturally transform to a new city without Govt buying land and building cities. In the case of Konza, no new productivity, no new infrastructure but the land price increased hence a loss to the economy.

@murchr..these economics are quite deep, you will have to make Google your friend to grasp the concept.Let me give you pointers to use for your research. 1. Government spending to buy land in Kenya will eventually result in rapid land price appreciation. Land is the most important factor of production so if the price goes high, this means less productivity. Not true at all. Who will be competing with govt to push the prices up? 2. Its true economies are stimulated by Govt spending. Govt spending should be in areas of improving infrastructure eg roads,education etc, not in ways that lead to inflation hence poverty. When govt acquires land, its sole aim is to improve infrastructure so as to lure the investors it so wishes. EG the Educators and others who will offer employment. 3. Govt is unique in that it has capacity to print money hence alter the economy hence inflation. If Govt is allowed to compete with its citizens, this can create situations where it just prints money, buys everything, resells, taxes its citizens even more. In such situation, citizens will take years before they realise the cause of the high inflation is govt printing money etc. There was no case of printing money here, just aquiring idle land and zoning it so where is the reselling etc coming from? As long as Govt spends money on improving factors of production ,i.e land, capital and labour, its ok. So you agree that land should be improved...this is what is happening, zoning and making that land more useful. Labor too and idle capital. Indeed its for the govt to gain here by gaining tax For example, in Konza, Govt spent billions to buy land. An acre jumped from 100k to 4 million hence unaccesible to many productive Kenyans. Are these productive Kenyans the ones who buy and subdivide in 1/8ths? If Govt spent the billions in infrastructure, the increase in land price could have been gradual and balance out with the new increased productivity. Indeed Govt will spend Billions in imroving infrastructure and etc that go with it then investors will gain confidence.In the case of Konza, no new productivity, no new infrastructure but the land price increased hence a loss to the economy.I understand apart from the WHERE Konza lies i.e Machakos/Makueni/Kajiado....there are those who feel it should be in Thika...dump politics