Kenyan manufacturers on the prowl for African markets

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BY BETTY MAINA

As a high level delegation of industry captains leaves for Ethiopia under the auspices of the Kenya Association of Manufacturers (KAM) and headed by the Cabinet Secretary for East African Community Affairs, Commerce and Tourism, Mrs Phyllis Kandie, it is pleasing to note the strides that Kenyan manufacturers and the private sector in general are making in exploiting opportunities in African markets.

KAM was highly instrumental in lobbying government to have the Ethiopian market opened which saw the signing of the Special Status Agreement between Kenya and Ethiopia late last year and this opened doors for immense opportunities for local manufacturers. The current government is clear about focusing on opening more trade opportunities in Africa. Currently Kenya exports 45pc of it total world exports to Africa and these only account for 15pc of the trade in Africa and there is an opportunity to increase the market share in Africa to 40pc.

The strategy to extend Kenyan products’ footprint to more African markets is noble. This will however need to be supported by a deliberate move by local companies to expand into those markets.

Africa is an emerging global market and it would be foolhardy for the business community in Kenya to rest on laurels expecting anyone from outer space to come and give them markets on a silver platter. Penetrating new markets requires a high level of aggression and due diligence on the feasibility of the venture.

Africa’s combined gross domestic product stands at just over USD1.6 trillion and is expected will rise to USD2.6 trillion in 2020 with a spending power of USD1.4 trillion. The continent’s combined working age population in 2040 of 1.1bn people will be greater than China and India combined. Kenya is poised to have the largest working population by 2040 and there is need to create job opportunities in for the working populace on the continent.

Africa is bursting with opportunity and there is need for concerted efforts towards accessing markets and removing any hurdles in the way to the realization of the African promise.

To maximize on the opportunities available on the continent there is need for commitment, competence and support of foreign missions in the various markets.

This brings to thought the notion on the structure and competence of our foreign missions. From a business perspective, it is obvious that the East African region is where many of Kenyan products are exported and one would expect strong presence of missions there.

To the extent that in order to serve our companies better one would expect at least two mission offices in Tanzania, for example, maybe a trade office in Dodoma and a mission in Dar es Salaam.

In Brazil in the foreign service, Argentina has more prominence largely because of the trade interests that the country has. Kenya may also take a cue from this and strengthen the missions where the country trades so that the country may maximize on the available opportunities.

As businesses are moving their feet and penetrating new markets there is need for Government support in signing and concluding pertinent trade agreements in order for local companies to have access to some markets even as Kenya works on improving its business operating environment.

Some Kenyan investors shy away from penetrating into some African countries because of restrictions imposed on trade of some commodities and for some countries there are still protectionist measures in place which frustrate trade.

The Jubilee Government clearly stated its quest to develop markets in Africa and this will be largely supported by the manufacturing sector. Africa is awash with opportunities and it is time for Kenyan companies to take advantage of those opportunities. There is need for more incentives and support for the sector in order to achieve the two digit economic growth rate that the country is aiming for.

Kenya Association of Manufacturers has been leading delegations to countries in Africa as part of ongoing efforts to tap into the emerging markets. A trip by industry giants was held two years ago to Nigeria and Ghana. The last mission was to Zimbabwe which presented a lot of opportunities for Kenyan investors.

The mission to Ethiopia will undoubtedly open doors for more opportunities and lessons as Kenyan investors claim a larger market share in Africa.

Kenya and Ethiopia combined today are home to 14pc of Africa’s population. However, the two contribute less than 5pc of Africa’s GDP. There is need to work in concerted ways to increase the slice of this GDP which is expected to increase by 62pc in 8 years.

The writer is the Chief Executive of Kenya Association of Manufacturers and can be reached on [email protected]

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  • solomon kinyanjui

    good move , we look forward to having a strong presence of KAM in our annual Africa Export and Import Fair 28h -31st august 2013 at the KICC.
    We are also working with the Ethiopia chamber of Commerce to Stage the 6th Ehio-Chamber International Trade Fair this November

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