He spoke for 27.45 minutes, giving global and local insights on trade and business practices at the Safaricom’s Sustainable Development Goals Business Strategy launch. Dr. Mukhisa Kituyi, the Chief Guest and United Nations Conference on Trade and Development (UNCTAD) Secretary General emphasized that businesses are best placed to lead in achieving the 17 Sustainable Development Goals.
Dr. Mukhisa alluded to an increased multilaterialism which is focused on three main issues; Critical actions must follow decisions made, Smart partnerships with government, civil society and private sector is key and international responsibility with shared differential balance according to abilities must be underlined. These three issues pervade all multilateral efforts being made today to combat contemporary challenges from climate change to corruption to trade.
Closer to Safaricom, he alluded to disruptive innovations that are taking root.
Since the introduction and huge success of M-Pesa in Kenya, new models of thinking to tackle contemporary challenges have emerged. Technology has been celebrated because it destroys and builds better. While it also destabilizes the labor force, it creates for a new thinking in the labor sector
At the World Economic Forum in Davos this year Travis Cordell Kalanick, the founder CEO of Uber asserted that today, we are organizing our work around our lifestyles, unlike before when it was the other way round thanks to technology.
On matters business, Dr. Mukhisa Kituyi reminded the forum of how managers are aligning their lives to world’s changing times. Globalization has realigned the labor force making it possible to have labor as a national enterprise. In this regard, every of the top 500 company CEOs has at least three passports. This can allow them to change their location of operation to a country that ensures they will flourish.
But as technology is moving fast, so does government find it difficult, if not impossible to also exercise regulation over them and also benefit in terms of taxes. Global services like Uber, Foodshare are earning citizens a living, changing lives of many but these increase economic activity is not being reflected with increased taxation. In Europe for instance Foodshare allows a neighbor who has been visited by a friend or relative who is a expert chef in something to enjoy his meal at a cheap cost and high quality. When more people enjoy this food, the chef is happy to earn some money but the government will struggle to make something directly from this.
This peer to peer economies are also being felt in Kenya, especially through Uber which has disrupted the taxi business. But the Kenya government it not taxing them because they do not own any taxi and only own and operate the mobile application.
Unfortunately this growth has not been reflected in some of the manufacturing sectors. A good example is the textile industry which could soon send thousands of people at home. Last year Kenya exported in excess of $400 million in the apparel sector under African Growth Opportunities Act (AGOA) and sustained horticulture production to the European market.
But Ethiopia has come of age, it does not have minimum wage. It is building 62 new custom made textile production centers and three quarters have already taken been up by Chinese companies. The average wage of a worker in the apparel sector in Athi River is sh12,000. The average wage of a Ethiopian working in the textile sector outside Addis Ababa is sh5000. They have just completed their Standard Gauge Railway and with higher production, what is the future of apparel sector in Kenya?, he posed!
But beyond Ethiopia, Vietnam has signed a Trans Pacific Partnership agreement (TPP) with the US. TPP is a trade agreement among twelve Pacific Rim countries. If this agreement is implemented, Vietnam will have duty free and quarter free access to the American textile market.
The labor force of Vietnam is 40 per cent more productive than that of Kenya in textile manufacturing. East Asian investors did not come to Kenya because they love us, they came because of the access Kenya provided to the US. If they can get direct access from Vietnam, cheaper and more efficient work force, we are in trouble, he said
His challenge was to governments to think about regional economic development. He lamented that governments act alone, they only focus on the big businesses. For instance, if there is a maize farmer in Mwanza, who is looking to cross the border to sell their maize in Kenya because the prices are better here or go to Uganda because there is a shortage of maize, they are called smugglers in 2016.
But this is the reverse how other countries did it. Empowering border communities is the best way of fostering regional integration. In other areas like Thailand, Laos, Mynmar and Cambodia and China. The regional integration started when each of these countries had their own leadership challenges. All government put their differences and grew their border economies first, the prosperity of the border started there to grow to capital cities.
Business has to start thinking on behalf of the nation. But as they do it, our business schools need to re-invent their curriculum especially to integrate sustainability and transformative goals in their students to ensure graduates translate knowledge to action, he asserted.