By Linda Ngari

The common and often accurate Kenyan narrative is that getting a job is a herculean task that can only get hacked by the witty, rich, smart, well-connected and at times the sneaky folk.

According to a Kenya National Bureau of Statistics (KNBS) 2018 report, the overall unemployment rate in Kenya is at 7.4 per cent. “The largest unemployment rate was recorded in the age cohort 20 – 24,” the report states. A World Bank report further projects that this figure is expected to double if population trends prevail.

The population trend, in this case, refers to the domineering number of people aged 35 years and below- a phenomenon termed as a “youth bulge” by the UN. The UN defines this as a case in which more than 20 per cent of a country’s population is composed of young people, as in Kenya.

About 800,000 job hopefuls enter the job market every year, most who end up in despair. A factor that has been found linked to depression among the youth.

Perhaps it is time to get out of the job-seeking rut and evolve into a work-based nation.

The Business Advocacy Fund held a policy breakfast on  27th November 2018, in which the theme ‘The future of work and the impact of the digital economy in economic growth’ was discussed. Among the guests was the Honorary Consul of Estonia in Kenya, Kadri Ayal, who emphasized the need for a work culture that ought to be instilled in Kenyans.

“In Estonia, people talk of work as opposed to job,” said Ms Ayal.

“Growing up thinking that somebody needs to employ you is placing an expectation on somebody else, while growing up knowing that I want to work and this is the kind of work that I want to do is taking the responsibility for that work on oneself,” she said.

This is contrary to what would be regarded as the elitist mentality in Kenya, where the brilliant students are known by their good grades, and in turn stand a higher chance at securing a job.

In Estonia, brilliance is in innovation. Ms Ayal explains that children are as early as High School encouraged to start their own businesses and pursue their ideas to yield different innovations, which in turn could be picked up and promoted by the government, introduced to the market and earn the students’ money.

“Initiating children into entrepreneurship while growing up actually starts in High School. All schools have children-led businesses that compete against one another,” said Ms Ayal.

She further gives an example of a group of three high school boys whose wooden watches project was picked up by the Prime Minister. The Prime Minister supported the boys by purchasing the wooden watches which he gave as gifts to world leaders when they would visit Estonia.

“Getting support to student-led businesses from that level communicates the thinking of a country,” the Honorary Consul said, adding that the backbone of Estonia’s economy is in Small and Medium Enterprises (SMEs).

This is contrary to the case of SMEs in Kenya, which according to a survey by the Kenya National Bureau of Statistics (KNBS), 95 per cent of SMEs close before they are five years old despite plausibly being the country’s biggest employer. Most SMEs close due to a shortage of operating funds according to the 2016 survey.

“An average Estonian company is between three to seventy people,” said Ms Ayal, “This allows for a diversity of work to be done.”

The country has moreover capitalized on the integration of ICT in its work culture, as it became the first country to ever introduce e-Residency. This enables entrepreneurs from anywhere to start and manage a company in Estonia and do it entirely online.

This further enhances the work over job culture, where most of the jobs in the online space would not demand a strict eight to five schedule that is planned by someone else and often supervised. Technology has widened the scope of freelance jobs, often run based on individual convenience and schedule.

Kenya has witnessed the advent of such jobs in Uber driving, online writing, computer programming which have lately become the go-to in the wake of unemployment in traditional jobs. A survey conducted by Uber found that 70 per cent of drivers in Kenya choose to leave employment to drive on Uber for reasons such as flexibility, to make more money, be self-reliant and pursue side hustles. A bigger percentage in the survey found that Uber driving made them more money than employment.

Technology, according to the KNBS 2016 survey on SMEs, would positively contribute to the survival of SMEs in Kenya. The slow uptake of technological innovation, limited adoption of modern technology, unaffordable technology, lack of reliable power supply, and inadequate access to information technology by SMEs are major challenges hindering startups. An ironic spectacle, since Kenya is recognized among the leading nations in technology in the continent, earning it the moniker Silicon Savannah.

The government too has its lion’s share of play in the dynamic through the formulation of policy and regulations.

It is the meantime Wanjiku’s responsibility to branch out of the job culture into the work culture, tapping not into what the country can do for her, but what she can do for the country.

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Linda Ngari is a Communications Assistant for Knowledge Management at the Business Advocacy Fund.

Posted On Wednesday, 18 December 2019 17:31

By Linda Ngari

The Business Advocacy Fund on November 27th  2019 held a policy breakfast in partnership with the Strathmore Business School.

The breakfast involved practitioners in business reporting, scholars, private and public sector participants and corporate expert. The discussions revolved around technology in relation to the workspace, while introducing anticipated changes that ought to be brought about by a fast-paced digital era. The theme for the breakfast was dubbed; “The Future of Work and the Impact of Digital Economy in Economic Growth".

Amid the discussions was the concern that as much as the Big 4 Agenda introduced by President Uhuru Kenyatta highlights some of the long-term problems that have been facing the country, it still lacks a crucial component.

According to Bill Lay, ICT integration should have been part of President Uhuru Kenyatta’s Big 4 Agenda if not a fifth agenda all on its own.

The liberations identified that technology offers a quicker, much effective way to rid Kenya of the sore impediment that is corruption.

Mr Bill Lay is a seasoned stakeholder in the private sector. He is currently chair of the Business Advocacy Fund’s board. The U.S-born policy expert has amassed decades of experience in the private sector in Kenya having formerly worked as CEO to companies such as General Motors and CMC.

The four pillars, comprising of food security, affordable housing, manufacturing and affordable healthcare were introduced by the president at the dawn of his second term in 2017, just when the country was battling economic turmoil due to the post-election upheaval that lengthened the electioneering period.

Mr Lay notes that what the government has done with ICT, especially in relation to taxation is simply the elimination of paperwork, but not necessarily the eradication of tax crimes.

“We think iTax is a big deal,” he says, “iTax is run by a room full of guys. They can get in and do anything with your iTax.”

iTax in Kenya was introduced in 2013 as a web-based program by the Kenya Revenue Authority (KRA) to simplify tax administration services.

The General Motors CEO also adds that “It seems like it has been digitized, but its just been paper elimination. It hasn’t increased integrity.”

“It should be dead easy for KRA to use smartphones to pay taxes. It should be dead easy to tax any online service because there’s a record. If there’s a digital footprint for every time I ordered something from Jumia, if there was a value-added tax service, I pay and I’d know KRA got it because I have my records.”

The hand of the law has at the same time proven too short to penetrate online spaces, posing unfair competition between similar businesses that operate online and those operating traditionally.

Bill Lay points out that if the public were to reclaim the money online entrepreneurs take up through tax evasion, it would make an impact on the country’s wellbeing.

“If KRA used ICT to do taxing then most of the tax cheats would have to hire some developers to help them do the cheats. The people who do online business shouldn’t be afraid of being taxed, because they didn’t get in the online business to avoid tax, they got in it to make money.”

“What’s unfair is the guy who’s doing the same business traditionally and paying taxes.”

Mr Lay think this would be a viable resolve for the country. “So an ICT Big 5 agenda as a major initiative would be the fastest way to eliminate corruption. And if we get thirty percent of that money back into our hands, we could solve a lot of problems,” he said.

“ICT as a fifth agenda would have been an overriding initiative, and because we would have been better at that we would have been able to also improve healthcare, food and other Big 4.”

He finds that some of the pillars of the Big 4 agenda, such as low cost housing can only exist on paper since its provisions do not consider actual circumstances.

“From a private sector point the fact of the matter is if we do the math, we’re losing jobs. Low-cost housing, the uptake has been very low because investors don’t see the benefit. Low-cost housing means the government subsidizes it, but when the government stands and says that there is going to be low-cost housing but it’s not going to be subsidized, people can’t afford housing without subsidy, they don’t need an Sh2 million housing and no mortgage.”

As for the Universal Healthcare initiative under the Affordable Healthcare agenda, Mr Lay notes that the government is right to have it as a key agenda, but it does not have to be a government initiative, rather it should be a government priority.

“A Big 5 agenda should have been able to take our ICT leadership for a ride around the block. We could market ICT like we market tourism, floriculture, coffee and tea.”

Internet reports have ranked Kenya highly in the continent and the world when it comes to speed, accessibility and usage, this has earned it the moniker ‘Silicon Savannah’. According to the World Bank, Kenya ICT sector has seen an average growth of 10.8% annually since 2016, becoming a significant source of economic development and job creation.

“God didn’t give us IT, it was because the millennials took education, and phones and all these things seriously. We have developers, we have people that can do this stuff, and we are not doing anything.”

For this reason, Mr Lay thinks that Kenya is well in a position to attract a regional office for tech-related assistance and supply. A hub that is run to fully benefit Kenyans. Not another one of foreign-invested projects or branches that makes the money here and takes it back home.

The challenge, however, is whether the government is even half aware of the burgeoning economic capabilities that the ingenuity of Kenyan developers can yield.

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Linda Ngari is a Communications Assistant for Knowledge Management at the Business Advocacy Fund.

Posted On Tuesday, 17 December 2019 10:49
Posted On Monday, 09 September 2019 00:15
Posted On Monday, 09 September 2019 00:15

By Robert Komu

The world marked the International Day of Cooperatives on the 6th of July this year. In Kenya, the day was not marked with any fanfare or celebration in the sector unlike other parts of the world. This is a sad state of affairs bearing in mind the integral role cooperatives play in the economy. The day was set to remind the public that cooperatives across the world continue to help preserve employment and promote decent work in all sectors of the economy.

Cooperatives have been around for now 200 years, since the proposed "villages of co-operation" in the United Kingdom as a response to the economic crisis in 1815. The idea spread was adapted, and went global, with around 1 billion members of cooperatives worldwide today. In Kenya, the first cooperative Society was established in 1908 with the government formally getting involved in 1931. Since then there has been several developments and legislations in the sector which have led to exponential growth, a lot more still needs to be done.

Kenya is estimated to have over 14 million people in cooperatives; with about three-quarters of the population which nears 30 million depending on the activities of cooperatives and Saccos either directly or indirectly for a living. The cooperative sector has played a key role in directly employing over 500,000 people. Sacco’s today account for 80% of the total accumulated savings while Kenya’s sub-sector is the largest in Africa.

In recent decades, co-operatives have made tremendous contributions to millennium development goals, through the generation of income for their members and also offering a range of benefits which has led to their inclusion in the development conversation. Their role was recognised within the development community when the UN declared 2012 as the International Year of Co-operatives. Consequently, this has had far-reaching effects; a good example of this is the UN's Food and Agricultural Organisation noting that cooperatives have been and are key to feeding the world.

Cooperatives worldwide offer a dynamic and flexible business model that bridges market values and human values. Due to this, they have a very integral role to play in the frameworks for inclusive growth; however, they are faced with a myriad of challenges that prevents them to thrive and offer better value. For instance, in the 1960 and 70’s due to high expectations and being seen as integral and major players to development, there was a lot of government interference which led many to fail and were, as a result, written off by most development agencies. Government interference is still rife in the sector.

This interference by government today is through over-control and regulation. Cooperatives are often subject to burdensome regulations with high cost and time burdens associated with setting up a cooperative. A robust legal environment with prudential regulation needs to protect democratic member control, autonomy and independence, and voluntary membership.

At the same instance, many agencies working with cooperatives do not recognise or understand their specific governance and legislations, thus the challenge of fighting back laws that do not support the growth of cooperatives. In 2018, Kenyan co-operatives lobby groups opposed the proposed changes to the Co-operative and Sacco Act, which intended to give members with enormous resources powers to moot and control investment plans and returns from their investments; this would have been detrimental to the principle of one man, one vote and equitable distribution of returns in Sacco’s and co-operative societies.

The Industry, Investment and Trade ministry also opposed the proposals contained in the Statute Law (Miscellaneous Amendments) Bill 2018 saying they risked creating a parallel class of investors within Kenya’s co-operative movement.

This said the delays in concluding the cooperative policy-making process are now impeding the growth and management of cooperatives in the country. This kind of confusion prevents the growth of a sector that has a great experience in building sustainable and resilient societies, For example, agricultural cooperatives have been at the heart of ensuring the longevity of the land where they grow crops through sustainable farming practices. Consumer cooperatives increasingly support sustainable sourcing for their products and educate consumers about responsible consumption. Housing cooperatives help ensure safe and affordable dwellings, while Worker and social cooperatives across diverse sectors i.e. health, communications, tourism, aim to provide goods and services in an efficient way while creating long-term, sustainable jobs.

It is therefore important to give the utmost support to the  cooperatives sector, the core principles and values of voluntary and open membership, democratic member control, economic participation by members, autonomy and independence, education, training and concern for the community that guide the sector is pivotal to member and economic development of the country .

The writer is a communication consultant and a supporter of the cooperatives movement.

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Posted On Wednesday, 31 July 2019 14:47

By Oscar Amadi Lusiola

Many governments, especially in Africa, lack resources to sufficiently provide security needs for all, prompting the establishment of private security firms to complement the government exertions in protecting the citizenry. Private security companies make a vital contribution to state security efforts. They are equally a significant employer.

QUESTIONS

With increased criminality and terror threats, this not only makes security big business but has also prompted the Kenya Security Industry Association (KSIA), a federation of private security companies, to warn investors against fake firms.

The criticality of security to humans cannot be overemphasised; modern society depends on a security system that is available and accessible. Private security guards are the first line of security; they access control for most facilities in Kenya. Their major roles include not only guiding visitors but also searching and frisking them for any item that may cause harm or threaten life. Most use bare hands, other metal detectors.

Questions are being asked about the viability or criticality of the guards’ roles, especially when searching for visitors. A recent survey by a local television station revealed how an armed intruder can go through searching zones undetected, even after the “search”. It is about time we asked some pertinent and fundamental questions.

Is it time the guards were retrained, particularly on emerging threats? Do we do away with manual searching or frisking, for “walk-through” metal detection machines? How many organisations will afford it? How do the guards' store firearms retrieved from visitors who are licensed gun holders? Do they know how to “make safe” when receiving or issuing arms? What if they found a visitor with an illegal gun?

Apart from CCTV, what other mechanisms are in place to ensure an all-round “Onion Layer” security arrangement that deters, denies, delays and detects threats? What of the response plan — and time?

Adam Curtis, a British documentary filmmaker, said: “Nobody trusts anyone in authority today.”

Wherever you look, there are lying politicians, crooked bankers, corrupt police officers, cheating journalists and double-dealing media barons, sinister children’s entertainers, greedy energy companies and out-of-control security services.”

This, then, implies that there is a general feeling by a section of Kenyans on the likelihood of the private guards being “out-of-control” if issued with firearms.

The National Security Advisory Committee is set to approve or reject a proposal to give guards guns. The Private Security Regulatory Authority came up with regulations on whom to grant a gun permit and the criteria for recruitment, training, follow-up, deployment and discipline of armed guards.

Though this has been received positively by the private security sector, most Kenyans are sceptical of the viability of the arrangement amid fears of gun misuse by the guards.

It’s prudent that private security management agencies be duty-bound to liaise with government agencies for thorough physical security and access control training of guards with a focus on emerging threats. For now, arming them should not be the priority.

Mr Lusiola, a security consultant, is a PhD student. This email address is being protected from spambots. You need JavaScript enabled to view it.

Posted On Wednesday, 31 July 2019 10:50

By Richard Ngatia

In a competitive global market, at a time of dwindling trade barriers and border restrictions occasioned by ubiquitous nature of technology, economic diplomacy has become an all-important tool to secure investment opportunities through bilateral and multilateral trade co-operation.

Economic diplomacy deals with the nexus between power and wealth in international affairs. It not only promotes the State’s prosperity but also, as the occasion demands, and opportunity permits manipulate its foreign commercial and financial relations in support of its foreign policy.

Accordingly, economic diplomacy is a major theme of the external relations of virtually all countries. At home, economic ministries, trade and investment promotion bodies, chambers of commerce and, of course, foreign ministries are all participants in economic work.

COLLABORATION

Current trends include increasing collaboration between State and non-official agencies, and increased importance given to WTO issues, the negotiation of free trade and preferential trade agreements, and accords covering investments, double taxation avoidance, financial services and the like. Abroad, embassies, consulates, and trade offices handle economic diplomacy.

The main focus is on promotion, to attract foreign business, investments, technology and tourists. Economic diplomacy connects closely with political, public and other segments of diplomatic work.

Diplomatic relations through state visits, export promotion and development co-operation are relevant in minimising potential risks that businesses encounter in their foreign operations, especially in Foreign Direct Investments (FDIs). They provide an avenue to mitigate risks such as political, legal and credit that may discourage potential exporters from entering foreign markets through negotiated trade agreements.

At the same time, the role of diplomatic relations in facilitating trade between and among states taking the forms of state visits, opening trade missions, consulates and embassies cannot be gainsaid as critical determinants of bilateral and multilateral trade relations.

Last week’s Common Market for Eastern and Southern Africa’s (Comesa) Source 21 International Trade Fair and High-Level Business Summit brought together 21 Comesa member countries.

REGIONAL BLOCS

Officially opened by President Uhuru Kenyatta at the Kenyatta International Convention Centre (KICC), it was a clear manifestation of the importance of regional blocs and the positioning of Nairobi as a regional economic hub and preferred conferencing destination.

Nairobi has in the past hosted international conferences and President Kenyatta played host to Heads of States and government, which have yielded trade agreements through fruitful negotiations for export of Kenya’s agricultural produce to the international market.

The ‘Big Four Agenda’ outlined by the President on food security, affordable housing, manufacturing, and universal health coverage presents unlimited opportunities for the local business community and also foreign investors. That will open avenues to investments, create jobs and facilitate skills transfer for our people on the new competitive technologies.

The Kenya National Chamber of Commerce and Industry (KNCCI) has embarked on an aggressive push to expand trade opportunities in international markets through its extensive network, however cognisant of the need to adhere to global standards. During the Kenya Trade Week 2019, KNCCI presented an agenda to upgrade its Certificate of Origin (CoO) systems to accept the issuance of all preferential certificates of origin issued by the Kenyan government.

MOBILITY

Automation of the issuance of Ordinary Certificates of Origin will enhance the efficiency and security of the process. Since the automation in late 2015, fee collection has increased from Sh1.6 million to Sh4.5 million per month. Additionally, the system shall hold a database on all pertinent export information which shall be used for targeting new markets and improving existing ones.

Effectively, Kenyan traders will enjoy an expanded market for their goods and services as KNCCI seeks to achieve the Integrated National Export Development and Promotion Strategy (INEPDS) by embracing sustainability, connectivity and mobility.

Effective day-to-day economic diplomacy by the foreign service officers will ensure that Kenya statecraft achieves the best for our country.

Mr Ngatia is the president of the Kenya National Chamber of Commerce and Industry (KNCCI). This email address is being protected from spambots. You need JavaScript enabled to view it.

Posted On Wednesday, 31 July 2019 10:23

By Donatus Njoroge

Once again, Kenya finds itself in a Catch-22 situation. A food crisis script that has become an annual ritual is slowly unfolding. Plans by the Ministry of Agriculture to import 12.5 million 90-kilogramme bags of maize casts doubts on the government’s commitment to one of the Big Four Agenda: Food security. Many are now wondering what went wrong and whether there could be lessons from neighbouring countries like Uganda and Tanzania.

FARM TO FORK

Researchers from Tegemeo Institute estimated an average production of 40 million bags of maize against an estimated annual demand of 45—50 million bags per year.

Even as we import to cover the deficit, statistics from the Ministry of Agriculture indicate that post-harvest loss in maize is close to 30 per cent.

Kenya imports maize in excess of Sh42 billion in foreign currency, but ironically in 2017, for example, farmers lost close to Sh29.6 billion to post-harvest losses, mainly due to spillage during handling, transportation, processing, marketing, rotting, aflatoxin and weevil attacks.

These losses are greater than the entire 2017 harvest for the annual short rain season. How much money can we save as a country if we manage post-harvest losses?

Where are we as a country four years after the 2014 Malabo Declaration on Africa Enhanced Agricultural Growth and Transformation? According to the 2018 Economic Survey, Kenya continues to experience losses as a result of poor storage, handling and rejection.

As the country prepares to mark the 2019 World Food Day, we need not lose sight of the government agenda of attaining a food waste target of 15 per cent by 2022.

What this means is that food security efforts by the government may remain a pipe dream unless adequate measures are instituted to manage food loss and waste that occurs at various points from farm to fork.

To achieve this, there is need of an integral approach from the country’s scientists, scholars, farmers, policymakers and investors to adopt innovative ways to reduce the food wastage and losses in the value chain for long term consumption and food production.

EMERGING ECONOMIES

As the world grapples with climatic problems, any amount of food harvested from the farm, sold at supermarkets and bought in households is of value and should be protected to avoid spoilage as its presence contributes to improved food security and can save a life.

Ms Immaculate Wanjiku, a maize farmer in Rift Valley, pointed out that her 10 bags of 90 kilos were destroyed by weevils last season as she waited for better prices.

“I just sold all my stock at a throwaway price to a broker, only for prices to improve a month later,” Peter Mwangi, another farmer in Kitale said.

This is only a pinch of the many tribulations facing grain farmers in the country.

Introduction of the Grain Warehouse Receipting (WHR) System could be one piece of the puzzle to bring order into the sector.

Post-harvest credit, in the form of warehouse receipting finance, has proven to be a critical component for agricultural sector growth in emerging economies.

The system creates a buffer against uncertainties in supply and demand, and takes advantage of economies of scale, and lower purchasing and transportation costs.

It improves the post-harvest operations in the grain sector to increase smallholder farmers’ capacity to get additional finance to invest in all the necessary inputs because the receipts issued are acceptable to banks as collateral for loans.

CHAOTIC MARKET

It’s no new concept, agricultural commodity exchanges have been practised for centuries with immense success.

In 1848, a group of businessmen who wanted to bring order to the Midwest’s chaotic grain market came together to form The Chicago Board of Trade. It’s now one of the busiest commodities exchanges in the world.

The government should speed up adoption and implementation of the Warehouse Receipts System Bill if the country wants to achieve its goals on food security.

Finally, food loss and wastage is a global challenge and the country needs a collective tracking mechanism to identify areas prone to losses and adopt technologies and other approaches to curb this challenge, otherwise we will end up spending too many resources to produce foods that end up as trash while millions of people go hungry every day.

If food security goes wrong, nothing else will have a chance to go right in the country.

Mr Njoroge is the Global Innovation through Science and Technology 2019 First Prize winner. This email address is being protected from spambots. You need JavaScript enabled to view it.

Posted On Wednesday, 24 July 2019 16:22

By Michael Arum

Kenya’s sugar industry has many natural advantages, almost all of which have been undermined by policy and public mismanagement that has seen its productivity slump. As a result, when import protection ends, supposedly next year, the industry will be immediately undercut by far cheaper imported sugar with huge costs to the country.

A quarter of a million farmers grow sugarcane. Up to six million Kenyans draw a livelihood from Kenyan sugar.

IMPORT COSTS

The nation saves Sh40-55 billion a year in import costs by using locally produced sugar — which matters more as our trade deficit continues to grow and place downward pressure on the value of the shilling.

Yet, in its bid to remedy the decline in the industry, the government has drawn up regulations that appear unjustified and inexplicable.

The Common Market for Eastern and Southern Africa (Comesa) has warned that there will be no further extensions in protecting domestic sugar production from imports, yet Kenyan sugar costs $870 (Sh87,000) a tonne to produce compared to $350 in Malawi and $400 in Egypt. There is, therefore, no possibility of Kenyan sugar competing against imports without the cost of production falling dramatically. That makes it a top priority for the new regulations to reduce production costs.

LOW YIELD SEEDS

Yet, the proposed controls comprise a peculiarly old-fashioned model of expensive (for taxpayers) state intervention that will further load costs and actively prevent the key corrections that can reduce our production costs.

The starting point for Kenya’s excessive costs is seeds. Farmers still use old-fashioned, low-yield seeds, meaning that Kenya produces far less sugar per hectare than any competitor.

A clear jump-start would have come from regulations that encouraged entrepreneurs to produce any of the 14 new high-yield seeds developed by the Sugar Research Institute (SRI) and already released for commercial production. Likewise, delivering on the Crops Act’s commitment to extension services to get farmers switch to better seeds would even double yields.

DEAD HAND

Instead, the regulations take sugarcane seed production away from the Kenya Plant Health Inspectorate Service (Kephis), which handles all of the country’s seed licensing, and puts it under the Sugar Directorate.

Setting up a department in the directorate with the requisite technical capacity, expertise and infrastructure will be costly and time consuming and promises delays and disruptions.

The next ‘dead hand’ is the mismanagement and inefficiency of our sugar mills. We produce around 5.3 million tonnes of sugarcane a year for 16 mills while Egypt produces only half as much, at 2.8 million tonnes, but has 14 factories.

Egypt produces nearly five times the sugar that we do — 2.3 million tonnes, compared to Kenya’s 0.5 million tonnes. Its mills are larger and newer and crush better-quality sugarcane more efficiently. However, the regulations add a framework that is proven to deter farmers and create disincentives to millers.

ZONING

They introduce zoning — meaning a farmer is assigned just one mill to sell to. In other countries, it drove farmers out of production. It ruined a once-thriving industry in Australia; when it was abandoned, raw sugar production doubled in five years. Countries such as Pakistan, India, and South Africa have all suffered from it.

The new rules also require investors to have high-powered management teams up to two years before getting licences or going into operation and build sugar mills ahead of licensing.

And they are illegal. Besides breaching the Constitution and other laws, they did not undergo the required impact assessment. The Parliamentary Committee on Delegated Legislation is due to review this decision to ‘forget’ to carry out a cost-benefit analysis or comparative assessment of other policies.

The six million Kenyans hope for a more serious attempt at cutting sugar production costs.

Mr Arum is the co-ordinator, Sugar Campaign for Kenyan cane growers (Sucam). This email address is being protected from spambots. You need JavaScript enabled to view it.

Posted On Monday, 22 July 2019 16:18
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