Why Kenya s economy is heading to the cliff

Let me start my blog today with a humorous story I just picked upon ‘Why America’s economy fell Off the Cliff.’

"John Smith, an American, started the day early having set his alarm clock (MADE IN JAPAN) for 6am. While his coffeepot (MADE IN CHINA) was perking, he shaved with his electric razor (MADE IN HONGKONG). He put on a dress shirt (MADE IN SRI LANKA), designer jeans (MADE IN SINGAPORE) and tennis shoes (MADE IN KOREA). After cooking his breakfast in his new electric skillet (MADE IN INDIA) he sat down with his calculator (MADE IN MEXICO) to see how much he could spend today. After setting his watch (MADE IN TAIWAN) to the radio (MADE IN INDIA) he got in his car (MADE IN GERMANY) filled it with gas (FROM SAUDI ARABIA) and continued his search for a well paying American job. At the end of yet another discouraging & fruitless day checking his computer (MADE IN MALAYSIA), John decided to relax for a while. He put on his sandals (MADE IN BRAZIL), poured himself a glass of wine (MADE IN FRANCE), and turned on his TV (MADE IN INDONESIA) and then wondered why he could not find a good paying job in America, and now he is hoping he can get help from a President (MADE IN KENYA).

In all fairness, this is the same story that is driving Kenya’s economy straight off the cliff.  I have been an investor in manufacturing for over 20 years and earned myself the tag ‘Industrialist.’  Kenya’s manufacturing sector is vapourising; virtually disappearing. There will be no more industrialists unless the Government of Kenya wakes up from slumber. 

If we are to save it, we must avoid the tranquilising pill of gradualism in policy execution and inject ourselves with an intravenous therapy of purposeful rescue action.

Here is an example of the debilitating gradualism in policy that continues unabated in our government when it comes to supporting manufacturing sector:  Product Quality Standard is a basic fundamental requirement of industrialisation (manufacturing).

In Kenya, the product quality standards are managed and policed by the Kenya Bureau of Standards; a very important body under the Ministry of Industrialisation. Each year manufacturers pay a standards levy to the government for purposes of enforcing product quality standards in the market.

In the past one year, a raft of new rules and guidelines have been introduced to promote standards. I’m talking about the Pre-verification of Conformity to Standards (PvOC) and S-Mark (Standards Mark). Manufacturers rallied to conform amidst grumbles about the short time given to comply and the cost of compliance to the new rules eroding competitiveness in the market.

However, in principle the enthusiastic efforts of KEBS were obeyed (90 percent compliance). But one year down the line, manufactures have realised these rules and guidelines mean absolutely NOTHING. The Certificate of Conformance to Standards required for all imported good and the S-Mark as well as ISM Mark can now be bought off the shelf by any rogue trader cum-businessman.  Actually this mark has now been given a stamp of approval to counterfeited products.

What point am I making? Weak, slipshod & dowdy indifference in product standards enforcement in Kenya is driving the manufacturing industry to the brink. As a result, briefcase traders are now pushing out industrialists like me out of the market. 

Manufacturers are responding by shedding jobs and converting to traders themselves. We are on the way to making Kenya a large supermarket for Chinese, Indian and Egyptian products. We are exporting our jobs to them.  The government is aware; the Kenya Association of Manufacturers is up in arms, yet NOTHING is happening. Gradualism and pole, pole attitude carries the day.

Kenyans take heed. Demand quality products and wherever possible support locally manufactured products or products whose value addition in Kenya is more than 80 percent.
In the meantime, let us all pray that someone fixes the ongoing mess that is standards enforcement in Kenya. Government, please overhaul the Kenya Bureau of Standards.  And, act fast.

Otherwise, our jobless youths like John Smith of America in my narrative, shall continue to wonder why they cannot find a good paying job.


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