Why Kenyan products are uncompetitive

By Gabriel Onyango

It is hard to fathom how rice from Pakistan could be cheaper that Kenyan rice, despite the cost of shipping it from another continent. During the sugar crisis a while back when Mumias Sugar was collapsing, there were whispers about businessmen importing Egyptian sugar and packaging it as Mumias. For that to even be remotely possible, Kenyan products have to be ridiculously uncompetitive.

Before we begin blaming importers, the big question is, what are other countries doing that we are not?  Julius Kirima, the deputy director of industries, Ministry of Industrialisation and Enterprise Development attributes it to low investment, he says, “we invest minimally and expect good returns. It is like fishing with a bare hook, we use obsolete technology and it increases our production cost, rendering us uncompetitive. ”

If our production is inefficient; slow, consuming more power, then we lose the advantages of industrialization. Kenya aims to achieve industrialization by 2030, a goal with tremendous potential, capable of transforming our economy.

This has necessitated the country’s move towards establishing Special economic zones where manufacturers will enjoy tax incentives, better infrastructure and seamless links to transport networks. All in an effort to boost the competitiveness of our products. The focus is on manufacturing because of its many links with other industries, it is estimated that one job in the factory,  supports 15 more outside, a phenomenon known as the job multiplier effect.

It is not that Kenya’s products cannot compete in the global markets, we are the largest exporter of tea in the world exporting 95 percent of the tea we produced. Also, international brands such as Calvin Klein and Arrow, source products from our Export Processing Zones (EPZs), however, there is still plenty of room for improvement.

In agriculture, when East Asia and the Pacific regions were benefiting from the green revolution between 1960 and 1990, Africa missed out. The green revolution involved land reforms, technological advancement, improved farming practices, large-scale agricultural projects that immensely increased yields.

However, transfer of technology from these regions to Africa has yielded little results-mostly due to a lack of fit. In addition, Africa’s staples include crops like maize, cassava, and sweet potatoes, meaning technology from Asia’s vast rice and wheat fields have little impact on Africa’s landscape.

Locally, agriculture remains largely rain-fed despite widespread climate change that brings about erratic weather and global warming. The World Economic Forum released the Africa Competitiveness Report 2015, where an analysis by the African Development Bank showed that averagely, irrigated farms have 90 percent more yields that un-irrigated farms.

However, irrigation technologies such as drip irrigation have low adoption rates in Kenya. This is mainly because of factors such as cost, security constraints, lack of water storage facilities and drip line problems. Once Kenya modernizes its agriculture, not only will our volumes increase but produce quality too, enabling us to compete with countries like Brazil, India, and Pakistan.

For change to occur, there has to be a collective effort among all stakeholders; the government, private sector, learning institutions and all citizens to ensure that the entire value chain right from production to market is as efficient as it can be.


RELATED POST

Your email address will not be published. Required fields are marked *