By Michael Arum

In the Daily Nation dated February 4th 2019, it is reported that Agriculture Cabinet Secretary Mwangi Kiunjuri stated that he would neither engage with Sugar Campaign for Change (SUCAM) nor receive our report consolidating farmers’ views.

SUCAM is an independent lobby and advocacy coalition consisting of grassroots farmers’ organisations, Civil Society Organizations and private institutions working in collaboration with various farmers associations.

By refusing to engage with us the Cabinet secretary may be perceived to be taking an unconstitutional stand.

The constitution of Kenya, 2010 provides the key principles of governance and the rights of all citizens. One of the key principles is public participation, which sugar cane farmers are seeking. Secondly, farmers have the freedom of speech and that of association. Farmers are free to belong to SUCAM and to express their views, through SUCAM, on the issues affecting them.

SUCAM applauds the government, through the Ministry of Agriculture and Irrigation for constituting the task force on the sugar industry in a bid to find long-term solutions to the problems ailing the sector. The task force was set up through a Gazette Notice No. 138 of 9th November 2018, with the Cabinet Secretary Mwangi Kiunjuri and Kakamega Governor Wycliffe Oparanya as co-chairs.

The task force was formulated by a directive from the president to the Cabinet Secretary for Agriculture during Mashujaa Day in 2018. The president further directed the Cabinet Secretary to have farmers arrears paid in 30 days. The president also advised farmers to supply their cane to millers who pay them promptly. In spite of this directive, by 31st December 2018, farmers had not been paid.

The 16-member task-force consists of 12 public servants, 3 millers and 1 farmer representative. SUCAM seek to have an equitable representation of farmers in the task force. There are 250,000 sugarcane farmers in the country, while there are 13 millers in the country. Increasing the number of farmer representatives on the taskforce would go a long way in improving the likelihood that the voices of farmers are heard.

Equitable representation of all key stakeholders in the sugar sector would enable the Cabinet Secretary to support the sector players to realise value from their endeavours.

On January 16th 2019, the task force commissioned public participation however, it later suspended the consultative meetings as farmers demanded to be paid their outstanding arrears first. Farmers also called for an extension of the timelines the committee was given to present its report to President Uhuru Kenyatta to allow farmers to consult widely.

SUCAM is leading efforts to collect views, and have a unified voice of sugar cane farmers. Farmers have raised the following issues: zoning, pricing of cane, outstanding debts, a suitable regulatory framework, and increased farmers’ representation on the sugar taskforce.   

SUCAM, a farmer based organisation, is not fighting the taskforce nor the Cabinet Secretary. We are advocating for the right of sugarcane farmers to be heard, and their views considered by the sugar taskforce. We stand ready to collaborate with the Cabinet Secretary of Agriculture and irrigation to revive the sector. ; Twitter: @sucamkenya

This article was prepared by Michael Arum, the Coordinator of SUCAM.

Posted On Friday, 15 February 2019 10:57

By Phyllis Wakiaga

Taxation is a key element in cost of doing business and hence should be designed to optimize growth of industry and increase overall competitiveness.

Ideally, favourable tax policies should be useful in predicting aspects of business, for instance, output fluctuations throughout the business year. Consequently, investors can plan their expansions and long-term investments, thereby increasing revenue to the country. Unfavourable tax policies, however, not only discourage investment and growth, but they are also a disincentive to exporters, which in the long run dilutes our competitiveness.

Kenya’s Declining Exports

A quick snapshot of the region reveals that intraregional exports increased from USD 2.7 billion in 2016 to USD 2.9 billion in 2017. The increase was partly driven by increased exports by Tanzania and Uganda to other Partner States which grew by 18.4 per cent and 37.3 per cent respectively. Rwanda recorded intra-regional export growth of 6.4 per cent while Kenya, South Sudan and Burundi recorded decline by 7.4 per cent, 24.2 per cent and 6.0 per cent respectively.

Decline of Kenya’s exports in the region was driven by reduced exports of manufactured products such as cement, iron and steel, salt and medicaments due to a continued erosion in our competitiveness. The two biggest contributors to this are systemic inefficiencies and unfavourable tax policies.

Delays in VAT Refunds

Businesses in the manufacturing sector have experienced major delays in VAT refunds, in some cases going back 3 years. Recent system changes at the Tax Authority, which are aimed at easing the administrative process, are unintentionally causing delays in verification of VAT claims that date back to 2014 despite exporters presenting proof of entry from across the borders.

Other countries have devised ways of tackling this problem, a crucial one being the charging of interests on delayed refunds. The impact of delayed refunds is dire for business. It means financing normal operations become very costly and this is more so for exports. Some manufacturers are currently borrowing expensive loans to maintain cash flow levels; liquidity becomes a major challenge and business operates at low capacity.

When faced with these hurdles, many manufacturers are faced with hard questions. How can the business stay productive and profitable? How can we recoup the heavy investments made in the last few years, to expand capacity and increase export business?

Competitiveness Must Be Addressed

At present, Kenya is at a cost disadvantage of nearly 12% on most manufactured goods, compared to other countries in the region. It is absolutely vital that this cost imbalance be addressed as a matter of priority.

For example, charges of 2% for Import Declaration Fee on all imported industrial inputs, and 1.5% for the Railway Development Levy, adds 3.5% on all products even before any other logistics, administrative and production costs are loaded. Our partner states in the region do not have these additional costs. When other costs such as delayed payments and cost of financing the business are factored, we automatically become more expensive by nearly 12%, making us unable to compete on the same level as neighbouring countries.

Industry, through Kenya Association of Manufacturers, continues to engage Treasury and KRA on these matters hoping for a quick resolve. The government has manufacturing as one of the Big 4 Agenda pillars, and rightly so, because manufacturing is the only one of the pillars capable of providing productive and sustainable jobs. However, tax policies, infrastructure and regulations have to be built to uphold this vision for us to realize the economic outcomes of the Agenda.

The writer is the CEO of Kenya Association of Manufacturers and the UN Global Compact Network Representative for Kenya. She can be reached at This email address is being protected from spambots. You need JavaScript enabled to view it.. This article appeared on the KAM websites and was accessed on 1st February 2019.

Posted On Friday, 01 February 2019 12:01

By Phyllis Wakiaga

This year, reports and news articles have been awash with stories of a dysfunctional EAC bloc stagnated and in the near-crumbling state. While many countries and regional economic blocs in the world are continuously making efforts to remove barriers within their relative geographical areas, the EAC partner states seem to be heading in the opposite direction. This has hindered the movement of people and goods, which is an essential element for the economic prosperity in any country.

The World Bank Group has stated that countries, which open themselves up to international trade, tend to grow faster, innovate more, improve productivity and provide higher income and much more opportunities for their people. The European Union (EU), for instance, lifted 45 obstacles in 2017, twice as many from 2016, as recorded by a 2018 European Commission Annual Report on Trade and Investment Barriers. Furthermore, the EU companies exported an additional €4.8 billion in 2017 due to barriers removed between 2014 and 2016.

The EAC has in place an Industrialization Strategy that aims to expand trade in manufacturing, by increasing trade among the EAC Partner States for manufactured products to at least 25% and increasing exports of manufactured goods to countries outside the EAC to at least 60% by 2032. Whilst the Strategy seeks to expand trade, it is unfortunate that our regional exports, which are mainly on raw materials, are decreasing.

The EAC global exports decreased by 9.3 per cent to USD 14.7 billion in 2017 from USD 16.2 billion in 2016; whilst the main regional export commodities included gold, coffee and tea. Whereas the EAC intra-regional exports increased from USD 2.7 billion in 2016 to USD 2.9 billion in 2017, Kenya, South Sudan and Burundi recorded a decline by 7.4 per cent, 24.2 per cent and 6.0 per cent respectively, according to the 2017 EAC Trade Investment Report. This is a clear indication that it is time the Partner States work together in driving the competitiveness of the industry to realize the Economic goals of the EAC Bloc.

It is therefore critical that the Partner States work in sync to address the myriad of Non-Trade Barriers (NTBs) that continue to impede the expansion of Intra-EAC trade. If these NTBs are resolved, the region will also see the realization of the EAC Trade Integration Agenda.

The Kenyan government has played a critical role in addressing NTBs through its engagements with the EAC partner states. As a result, their engagements with the Partner States have seen printed labels, motor vehicles, Kenya leaf spring, lubricants and energy drinks accorded again preferential treatment in Tanzania, confectionary and sugar based products and paper sacks in Uganda, Natural juice and steel and steel products in Rwanda and Burundi respectively.

In spite of these efforts, some of our products still face challenges in accessing the regional market. For instance, Tanzania is yet to accord preferential treatment to confectionary and sugar based products, despite the verification study done in June 2018 confirming that the products qualify, and tobacco products from Kenya.

For any industry, the predictability in policy and regulatory environment plays a central role in driving competitiveness. Such trade disruptions result in losses, reduced export volume and ultimately, lowers foreign exchange earning. On the other hand, this can result in unfair practices such as smuggling among other forms of illicit trade, which puts the lives of many at risk. Additionally, companies end up underutilizing their operational capacity resulting in poor economies of scale and deterioration of unemployment rate.

Investing in Intra-EAC trade will not only decrease the imports of raw materials and finished goods into the region, but it will also drive innovation, specialization and technological advancement. At the same time, it gives SMEs a platform to grow and expand.

Kenya Association of Manufacturers has been working closely with the government to identify and address NTBs within the EAC. The Sector Deep-Dive Report released in October, this year, by the Association and Kenya Business Guide highlights the NTBs that local industries encounter and recommendations that will encourage intra-EAC trade. This, however, will only be achieved if the EAC reinforces its market access strategy, prioritizes the removal of non-trade barriers and improves communication and awareness raising for sustained trade and economic development.

The EAC has developed legal frameworks to address NTBs, which include the East African Community (EAC) Elimination of Non-Tariff Barriers Act, 2017 and Draft Regulation on the same. However, the review of the Act and development of Regulations is underway to strengthen the structures that address NTBs and enforcement mechanisms in the EAC.

It is also critical that EAC Partner States sustain resolutions arrived on reported NTBs and enforce the decisions of the EAC Secretariat.

The writer is the CEO of Kenya Association of Manufacturers and the UN Global Compact Network Representative for Kenya. She can be reached at This email address is being protected from spambots. You need JavaScript enabled to view it..

This article appeared on the KAM website on December 18th 2018.

Posted On Wednesday, 23 January 2019 10:35

By Herman Wasserman

Press freedom is often thought of in relation to political pressure. There is more than enough evidence that threats, intimidation and imprisonment of journalists remain a serious cause for concern in Africa. But two recent gatherings on the continent encourage the thinking around press freedom in even broader terms.

One threat that’s getting increasing attention is the lack of media sustainability. This is understood to mean more than just the survival of media. It’s also about access to the resources needed to produce high-quality, independent journalism that supports a democratic culture, transparency and development in areas of government, human rights and economics.

The pressure on sustainability is a subtler threat than imprisonment and harassment. But it’s also dangerous in the long run.

The issue was at the forefront of debates at a World Press Freedom Day panel discussion in Windhoek, Namibia, and at a gathering of media scholars from around the world, the World Media Economics and Management Conference, in Cape Town.

In Windhoek, the focus fell on journalism’s sustainability in conditions of severe economic uncertainty. In Cape Town, the main focus was on the threat to media sustainability and journalism globally, posed by tech giants such as Facebook, Google and Twitter. Their enabling of “fake news”, aggregation of content and hoarding of advertising spend, formed part of a broader panic about failing media business models.

The sustainability of the news media is a precondition for good journalism in the public interest. So economic questions should form part of discussions of press freedom. And that has implications for media ethics.

The Media Sustainability Index (MSI)  conducted by the NGO IREX recently found that media sustainability in the region was on the decline. It found that financing and media management is the weak link, threatening sustainability and independence… (I)t is clear that business management and sources of funding for the media (…) form the missing foundation for many other aspects of media health and are a cause for concern.

Sustainability fears

South Africa is often considered to be a major media player on the continent. But an important new report by Rhodes University Professor Harry Dugmore shows how fears about sustainability potentially hamstring the country’s media in fully fulfilling its democratic role.

Print media circulation has fallen steeply in recent years. Media organisations are struggling to make money out of the migration of audiences to online platforms. The result, the report shows, has been cutbacks on investigative journalism, shrinking newsrooms and the capture of some media by joint oligarchic and political forces.

Similar trends were found in a draft report presented in Windhoek by the Institute for Public Policy Research. It shows how negative economic conditions in the country, combined with failing business models, have led to a loss of senior journalists, retrenchments and closures of media outlets.

The problem of collapsing business models in Africa is compounded by weak economies and struggling advertiser markets. In such circumstances, media become particularly vulnerable to capture by political interests, unethical practices, such as “brown envelope journalism” or cut corners to produce superficial journalism.

But there remain many African journalists who have courageously weathered economic crises. They can serve as examples to the world. The most recent example was the role South African journalists played in exposing ‘state capture’ by former President Jacob Zuma’s friends, the Guptas.

Digital media

A great deal of hope is being pinned on digital media to provide more avenues for information and citizen participation. There are some inspiring examples of this in Africa. These range from independent news websites such as Groundup to interesting blogs and citizen journalism on mobile platforms.

But digital media is not exempt from political capture, as the Bell Pottinger saga in South Africa showed. It drove the Guptas’ divisive “white monopoly capital” campaign.

On top of this, access to digital media is still unequal. Not everyone can afford data costs to access the internet. And the presence of the tech giants can erode independent media’s foothold in Africa.

The challenge is to create models for African media that are sustainable enough to provide journalists with freedom and independence. They must also be relevant to local audiences, and keep the core values of journalism (public interest, truth, human dignity) as their primary goal, rather than chase profits as an end in itself.

This calls for creativity and adaptability, as well as a keen focus on rebuilding trust with audiences and communities.

Suggestions from the conferences included that journalists should immerse themselves in communities, and media houses build relationships with audiences to regain trust. This is especially important in the age of ‘fake news’. Public meetings and events could put media houses in contact with audiences. Digital platforms should be used to meet audiences where they are.

Trust and relationships will be key to charting a sustainable future for news media. If communities trust the media, they can become their allies against political interference, and help support the role of journalists. As CNN’s Christiane Amanpour has reportedly reminded her journalism colleagues: Trust and credibility are the commodities we trade in.


This article was published in The Conversation on  May 16, 2018.

Herman Wasserman is a Professor of Media Studies and Director of the Centre for Film and Media Studies, University of Cape Town. This article is based on a presentation made at a World Press Freedom Day event in Windhoek, Namibia, where the author was an invited guest of the Namibia Media Trust.

Posted On Wednesday, 23 January 2019 09:37

By Sarah Quarmby

There’s widespread and sustained interest in the role of evidence in policymaking. But because policymaking is inherently messy and complex, there’s no catch-all way of making sure evidence gets used. In this context, “knowledge brokers” are increasingly being recognised as a potential way to improve evidence-informed policymaking.

Knowledge brokers are individuals or organisations that bridge the gap between academic research and policymaking. They work to make sure that useful evidence arrives with the right people, in an appropriate format, at an opportune moment. Successful knowledge brokerage is based on building trusting relationships. This requires an intimate knowledge of both academia and policymaking, including their respective values, norms, and incentives. There’s a limited evidence base about knowledge brokers, but preliminary findings suggest that they do have the potential to improve the uptake of evidence.

How does knowledge brokerage work in practice?

For the last six months, I have been working as a Research Assistant at the Wales Centre for Public Policy, an independent research centre based at Cardiff University. The Centre opened in October 2017, building and expanding upon the work of its predecessor, the Public Policy Institute for Wales, and is a member of the UK-wide network of What Works Centres. We work closely with Welsh Government Ministers and public service leaders to help them identify their evidence needs and then facilitate the provision of evidence. In practice, this means guiding a series of projects, each relating to different policy or public service topics, from the initial ideas stage to delivering a final product.

To take the example of the Welsh Government side of our work, projects usually begin by meeting up with Ministers, their special advisors and/or policy officials (under the auspices of the Cabinet Office) to discuss potential areas of work. When we have agreed the kind of evidence they would find useful, we conduct a short review into what’s already known about the topic. From here we can decide whether to do the research in-house, or to commission it out to an external expert. If we’re outsourcing the project, we identify the most appropriate experts and liaise with them to see if they would be interested in working with us.

Each project is different, but our work often involves facilitating and managing relationships between the experts and the Welsh Government, as well as ensuring effective communication so that the final product meets expectations. The form that the evidence produced takes depends on the specifics of each project. It may be a report (for example, see here), an eventworkshop, or simply a series of structured conversations between the expert and the Welsh Government.

In this way, we navigate the space between academic researchers and policymakers, who have long been thought of as separate communities. Nathan Caplan’s “Two-Communities” theory is still a useful tool for thinking about how to bridge the gap between academic research and policymaking. He suggests that the research and policymaking worlds operate according to such different value systems and timescales that it is as though they were speaking different languages. Policymakers face political pressures and public scrutiny, and are looking for timely, practical input into policy matters, whereas academics are more interested in longer-term, theory-driven research and are under pressure to publish in academic journals. Caplan pointed to the need for intermediaries who are sympathetic towards both cultures and can mediate to best effect.

Why it is important

Our work at the Centre puts into practice some of the latest research on encouraging evidence use in policymaking. A recent study from the Alliance for Useful Evidence looked at what can be done to put policymakers in a position where they are both able and motivated to make use of evidence, and identified six “mechanisms” to improve evidence uptake. Our approach focuses on four of these: fostering mutual understanding of evidence needs and policy questions, facilitating communication and access to evidence, facilitating interaction between decision-makers and researchers, and building the skillset required to engage with research.

Indeed, the way we operate is informed by a wide range of academic literature on policymaking. For example, we’re currently exploring alternative approaches to presenting evidence. Research suggests that policy-makers often respond to narratives and case studies which show how policies affect individuals’ every-day lives. Advocates of this line of thinking claim that evidence presented in this way is far more likely to be used. The problem with this approach is that it has implications for the need for academic neutrality and we don’t want to risk compromising the Centre’s impartial status.

Knowledge brokerage is a work in progress, but research suggests that it’s important that the early trial and error approach to facilitating the use of evidence in policymaking doesn’t turn into an unsuitable longer-term strategy. For this reason, we’re refining our ‘theory of change’, i.e. what we want to make happen, how we’re going to do it, and how we’re going to measure whether it’s been done. Further down the line this will allow us to assess whether we have been effective, and what approaches have worked better or worse than others. We know that our model works in our context and have a lot of examples from our work with the Welsh Government to support this. But the challenge is to systematise ways of working and collect clear examples of where and why we have been able to have ‘real-world’ impact.

This article originally appeared on the LSE British Politics and Policy blog

Sarah Quarmby is a Research Assistant at the Wales Centre for Public Policy

Posted On Thursday, 22 November 2018 11:42

By Dinah Wakio

There seems to be a leadership vacuum in the world right now, as partly seen in the lack of a consensus in the protectionism versus globalisation policy dilemma.

While prominent global leaders push the envelope with the trade wars, economists are predicting a potential financial crisis.

Notably, global growth has decelerated gradually compared with its strong historical performance. Some of the reasons given for this slowdown include the recent rise in protectionism, dimming of economic activity, increase in trade wars and tighter credit marked by high interest rates.


In recent times, protectionism has gained momentum with leaders seeking to protect their nations’ economic interests, mainly by creating trade barriers.

During the 2016 US election campaigns, most Republicans made remarks that showed their bias for protectionism.

Since his election as the 45th US President, Mr Donald Trump has constantly spoken about possible change of the existing foreign and trade policies, claiming they do not favour his country, claims most experts are sceptical about.

In a recent address to the UN General Assembly, Mr Trump noted that his nation was systematically renegotiating broken and bad trade deals.


In 2016, United Kingdom held a referendum and British voters opted out of the European Union. The scheduled exit March 29, next year, might, however, be halted following calls for a second referendum to remain in the EU. Those rethinking Brexit apparently realise that the UK stands to lose economically by going it alone.

In the face of a changing global trade environment, African leaders should step up decision making to secure their economies.

A World Bank report released early this year noted that 18 sub-Saharan African nations are at growing risk of debt distress because of heavy borrowing and gaping deficits. They include Angola, Ethiopia, Kenya, Ghana, Nigeria, Tanzania and Zambia.


While some argue that the loans are meant for the much-needed development projects, the sceptics are jittery about the consequences in the event of default.

In March, the African Continental Free Trade Area (AfCFTA), a regional body urged African states to join forces and promote the free movement of goods and services.

If all the 55 countries join, it will be one of the world’s largest free-trade areas with $4 trillion in combined consumer and business spending.

African policymakers must prudently craft policies geared toward unlocking their nations’ economic potential while ensuring selfish interests do not hinder the opportunity for growth.

If this does not happen, Africa will continue to be on the edge as major global powers engage in healthy policy debates and impose their ways on us with our leadership failing to develop clear strategies to uplift our people.

Ms Wakio is a communications consultant at P & L Consulting Ltd. This email address is being protected from spambots. You need JavaScript enabled to view it.

Posted On Friday, 16 November 2018 08:28

By Sally Akinyi

"Seeds are the soul of agriculture’’. This is a statement not far from the truth; these tiny things are the lifeline of the food we consume every day.

However, with the looming climate change, the future of seeds is under siege. The harsh consequence of this reality has been observed through the continued loss of food diversity. In fact, the world has lost 75 per cent of its food biodiversity in the past 100 years.


Today, in East Africa, local varieties of indigenous foods such as yams, cowpeas and amaranth are not only shrinking, but also rapidly being replaced by unhealthy foods. Smallholders, too, have resorted to cultivating crops that fetch them more income.


The FAO estimates that out of the 821 million people in the world with severe undernourishment, 256 million are in Africa. While indigenous foods have significant potential to alleviate hunger and improve food security and nutrition, their future also grapples with the trend of monopolisation of seeds by global food companies. We must look at the rise of seed multinational firms and their implication on the future. The new shift in the Bayer and Monsanto (now the largest producers of genetically engineered crops) merger signal a boost in agricultural research and innovation. It is expected to spur innovation in the rising demand for food supply globally.


Against this backdrop are worried lots. Smallholder farmers, who are the custodians of diversifying food in Sub-Saharan Africa, stand to lose out in the so-called new modernisation of agriculture.

The importance of seed diversity in this new monopoly is considerably a major discourse on the road to eradicating hunger.

The role of seeds is quite significant in improving food production in regions that have borne the brunt of hunger in recent times.


The new food giant- Bayer and Monsanto- is to seek approval from regulators in 30 countries. The looming reality of this move brings with it continued patenting of plant varieties, making farmers unable to continue to breed varieties, as has been the norm for many years. Smallholder farmers have been known to exchange knowledge on seeds and pass on indigenous seeds from one generation to another. They are key to retaining seed diversity, which is crucial in preserving ancestral seeds that hold immense nutritional value.


As countries like Kenya begin trials on GMO food, it is important that they create a level playing field of all actors in the food system, including smallholder farmers.

New approaches such as Open Source Seeds Systems (OSSS) have the potential to check the dominance of food giants. OSSS is re-defining the role of smallholders in the seed sector by safeguarding their rights.


Secondly, countries need to catalogue their indigenous foods in order to preserve knowledge for future generations. In this way, they can retain their plant biodiversity, which is useful in countering food insecurity.

Ms Akinyi is the regional communications officer, Hivos East Africa. This email address is being protected from spambots. You need JavaScript enabled to view it.. This piece was published by the Daily Nation on 5th November 2018 and on the Hivos website at

Posted On Tuesday, 06 November 2018 09:40

By Job Wanjohi

When the Government reignited its fight against illicit trade earlier this year, the immediate impact of the raids and arrests carried out reverberated throughout the entire industry. The extent to which these illicit trade networks had infiltrated the market was unearthed, followed by a good amount of public awareness on the dangers posed by counterfeit goods as well as the efforts by the government to ensure the safety and security of all citizens.

A few weeks into the activities, the industry started reporting tangible gains made from this initiative. Sectors such as Edible Oils, Electrical and Electronics, as well as Food and Beverage, have indicated increased market share as a result of the fight against illicit trade, so much so that the sector is now looking to increase their capacity to cater for the growing demand.

The link between illicit trade and the economic performance of a country is undeniable. In June this year, The Economist Intelligence Unit published The Global Illicit Trade Environment Index to measure the ways in which nations are addressing their illicit trade challenges and the extent to which they have prevented the illegal networks from taking root in their economies. The index categorized the performances in four pillars namely, Government Policy, Supply and Demand, Transparency and Trade, and Customs Environment. Although Kenya was not among the 84 countries that informed the survey, the countries that emerged top ten were strong on all the above. Finland for example, which was number one with 85.6 out of 100, was very strong on Government Policy. This means that the country has very effective government policies and structures set up to track and prevent illicit trade. Is it any wonder that Finland finds its competitive edge in manufacturing, which then makes it one of the world’s top economies with a high GDP per capita?

The index attributed the low scores of countries such as Libya, Morocco and Iran to weak law enforcement, corruption that aids the permeation of illicit trade networks through the borders, and lack of automation of critical processes such as customs. There are also other factors such as weak Intellectual Property (IP) protection that discourages investment and hampers innovation in these economies.

These are the critical aspects that we need to be keen on as a country if the war on counterfeits and illicit trade is to be sustained. When we speak of corruption, we should not just view it as actions of individuals or as a point of contact at the borders, for example, we should expand our view to include negligence, lack of enforcement and inspection, or even something as simple as overlooking an overloaded cargo truck. It is a combination of actions that make it possible for counterfeit goods, for instance, to seep into the market.  Hence this would be the topmost hindrance to the sustainability of this fight. If we can tackle corruption then instituting measures to ensure that illicit trade can be prevented will not be a difficult task.

We also need to ensure that once the perpetrators of these crimes are apprehended, the scope of their punishment should bring into perspective their role in economic sabotage and above all, in endangering the lives and safety of citizens. Therefore they should be prosecuted to the fullest extent of the law, which will also send a message to all who are involved.

We are on the right track on this issue as a country; we only need to ensure that we don’t lose momentum to the detriment of our economy.

The writer is the Head of Policy, Research and Advocacy at Kenya Association of Manufacturers and can be reached on This email address is being protected from spambots. You need JavaScript enabled to view it..

Posted On Friday, 26 October 2018 15:05

By Habil Olaka

Over the past two years, the introduction of price controls on bank loans and deposits has dominated discourse with a groundswell of public interest on the matter. Recently, the National Treasury’s 2018 Finance Bill has called for a repeal of the ‘rate caps’.

The Banking (Amendment) Act 2016 was motivated by the need to increase credit uptake, particularly for micro and small enterprises and households.

It also sought to promote a savings culture through interest rate regulation — a radical shift from the conventional principles of market-driven dynamics.

Stakeholders — including Kenya Bankers Association (the most fervent defender of market liberalisation), Central Bank of Kenya, World Bank and International Monetary Fund — have conducted studies to establish the import of the legislation.

Market analysts such as the Institute of Economic Affairs and Cytonn Investments also raised a ‘red card’.


All the surveys revealed that the law is not achieving the intended objective but instead precipitated tight conditions of lending, occasioning a two per cent credit expansion in the private sector — down from 20 per cent in 2015. Moreover, in the space of a year, we have seen 1.2 million fewer loans. The average loan size also increased by 47 per cent — a shift towards big business and middle- and upper-class borrowers.

The law effectively benefits the rich, not ‘Wanjiku’. This shouldn’t be the case, especially because the banking industry (the most regulated of all industries in Kenya) is supervised by CBK, which has at its disposal various policy tools, including the Prudential Guidelines, to moderate industry practices.

Cytonn observed that while the caps may solve the issue of bank spreads, it would lock out SMEs and other “high-risk” borrowers and that the law was based on “an unreasonable premise that the highest extra risk premium in the Kenyan market is four per cent”.


Advocates of the cap argued the pace of borrowing was already on a downward curve. But the Act introduced a distortion from which credit markets have not recovered.

Typically, the market should rebound within three months after a shock. In this case, however, the rate caps have prolonged, if not exacerbated, the situation. If this arbitrary price control was good for our economy, we would have seen an uptick by January 2017.

Indeed, there are markets with controls on loan prices. However, very few of them, if any, have the same extreme approach as ours.

In South Africa, the maximum limit is about 35.4 per cent while the prevailing commercial prime lending rate is 10.5 per cent.


Liberating interest rates to natural market dynamics will open up bank finance, enabling borrowers to access capital while banks get the opportunity to innovate and grow.

For this reason, national Treasury Cabinet Secretary Henry Rotich’s move to repeal the Act is welcome.

It will pave the way for the Treasury and CBK to work with sector stakeholders to chart the best way forward that serves the interest of the economy while promoting financial inclusion and consumer protection.

Dr Olaka is the chief executive officer, Kenya Bankers Association (KBA). This email address is being protected from spambots. You need JavaScript enabled to view it.. This opinion piece was published in the Daily Nation on 3rd July 2018.

Posted On Friday, 19 October 2018 15:31

By Joyce Njogu

According to a World Bank 2017 report, the East African region risks missing its long-term economic growth targets due to a widening disconnect between labour market skills needs and the graduates of higher education institutions. This is despite heavy investment by East African countries – in skills development, and public expenditure on education, which absorbs about 15% of total public spending and nearly 5% of gross domestic product. The report paints a grim picture of the availability of employable skills especially for industry such as technical mastery and artisanship.

Businesses in most countries often point to the failure of education and training systems to provide the skills they need. There is often a mismatch between skills supplied and skills demanded in the labor market. Industries that understand their current, immediate and future needs and those able to identify the opportunities presented by the ever-changing market place, will be best placed to capture the best skills in the pool. Today, new technologies, higher quality standards in world markets, flexible production processes, the pressure of global competition, the emergence of e-commerce and Industry 4.0 mean that the skill level for gaining and maintaining a competitive edge in businesses and industries is rising continuously.

Investment in skill development played a very important role in the Asian Tiger economies and the earlier miracles in the development of the Japanese and North American economies. Kenya must create an enabling environment that accelerates our socio-economic development through productivity enhancement. The primary strategy towards this end would be the development of our human resources to achieve a multiplier effect that will expedite economic reforms. Globally, several countries such as Finland Germany, Switzerland, Austria and Netherlands, have taken steps to strengthen policy guidance and regulatory frameworks for technical and vocational education and training. This has also enabled them tackle youth unemployment.

In Kenya, the government has in its budget for 2018/2019 financial year, allocated Sh444.1 billion towards education, with a focus on expansion of TVET infrastructure. This illustrates government’s commitment towards the provision of quality and relevant education and training. Kenya Association of Manufacturers (KAM) has for two years now, partnered with the Germany Technical Cooperation (GIZ) in the Technical and Vocation, Education and Training (TVET) Program. The program seeks to influence the policy direction regarding technical training towards demand-driven technical education in Kenya.

For our nation to realize Vision 2030, there has to be a focused attention towards building the human capital that will drive the industries through skills development. Primarily, the manufacturing sector is the guaranteed provider of productive, sustainable jobs. We cannot solve the unemployment menace in the country with rudimentary skills; we must secure the future of industry through practical cutting-edge skills for job creation.

Research by UNESCO reveals that, sub-Saharan Africa has the highest rates of education exclusion. Over one-fifth of children between the ages of about 6 and 11 are out of school, followed by one-third of youth between the ages of about 12 and 14. There is need therefore for young people in the region to discard the notion, that vocational education is an inferior education option. Vocational training is a sure way for developing nations to industrialize at a faster rate. Developing countries could minimize skills mismatches by placing greater emphasis on TVET.

Human Capital is one of the biggest investments of any industry. It is important that skills development and other investments comprise one of the factors necessary for productivity and growth. Continued improvement of productivity is also a condition for competitiveness and economic growth and therefore poverty reduction. As a country, we indeed face the possibility of a ‘skill divide’, which will be even more threatening to our development prospects than the ‘digital divide’.

The writer is Head of KAM Consulting at Kenya Association of Manufacturers. She can be reached at This email address is being protected from spambots. You need JavaScript enabled to view it.. This opininion piece was first published on the KAM website.

Posted On Tuesday, 16 October 2018 08:53

By Sachen Gudka

Money is the bloodline of any economy, and for businesses to thrive, its steady flow and circulation are critical. Cash is king.

However, when this is not the case, the resulting effect is devastating for the entire business ecosystem due to its adverse impact on profitability, productivity and trust. Supply chains cannot be sustained and value chains are decimated.

Increasing cases of delayed payments by both National and County governments to numerous businesses countrywide are alarming. Delayed payments impede the effective circulation of money in the local economy, adding excessive strain to businesses that are already balking under other local and global market factors.

Unfortunately, the hardest hit by this trend are key drivers in bringing the Big 4 plan to fruition. For instance, due to the late harvest last year, the government, in order to continue with the maize flour subsidy programme, had to buy the maize imported by local maize millers. Presently, the Maize Millers are still owed 80% of the total debt, which amounts to an excess of Ksh 2.5 Billion. This has put a huge strain on their cash flows and in turn, they are unable to buy adequate maize and wheat from local farmers. Additionally, reimbursement owed to Maize Millers, for the transport cost incurred in transferring maize from the port to the mills under the maize subsidy programme, has also been delayed forcing them to take maize in lieu of cash payment.

Another conspicuous example is the money owed to media houses regionally and at the national level. Last week, one of the largest employers in the Country, Nation Media Group registered a 35.5% drop in profits from the previous year, owing to provisioning for unpaid revenue of Ksh 856 million by the Government Advertising Agency. Indeed, the entire media sector is owed over KSh 2.5 billion. This tremendously slows down the operations of the media houses and undoubtedly hampers their ability to be effective in the core mandate to inform and educate citizens. It also impacts the companies’ ability to offer quality employment and significant output.

A report done by the European Central Bank in 2015 on Governments’ payment discipline: the macroeconomic impact of public payment delays and arrears, unexpected delays in payment reduce corporate profits significantly since they alter the present discounted value of payment. This is especially so in our case as there are no interests applied on reimbursements or arrears. The report found that, increase in delayed payments reduces profit growth by 1.5 to 3.4 percentage points.

Because delayed payment has a ripple effect, suppliers of affected companies and other businesses in the value chain are also severely affected. Worst of all, SMEs who rely on a much urgent supply of cash to run their day-to-day operations become crippled and, in many cases, bankrupt. Other macroeconomic effects of this could be the increased cost of credit to companies – as it stands already this is a huge impediment to the growth of the manufacturing sector.

A look at a long-standing issue such as the VAT refunds owed to manufacturers paints this picture clearly. The refund process has been very slow because of the required administrative process. This means that a lot of money, which runs into billions of Kenya Shillings, is held up in Government processes causing manufacturers to borrow heavily due to cash flow constraints.

Just last year, our retail sector was at a near-collapse as some of the largest supermarket chains were caught up in arrears amounting to over Ksh 40bn to suppliers all over the country. The inability for supermarkets to absorb locally produced goods translates to lower sales by local manufacturers, who are already owed billions by both County and National Governments.

Following this, the Government through the Ministry of Industry, Trade and Cooperatives together with stakeholders from Industry led by KAM, developed a study on regulations for prompt payment and a code of practice to help ‘stop the bleeding’. Some of the recommendations were; to review the current payment period to a shorter time and the establishment of a legal framework to curb the culture of late payment following international best practice. For example, to discourage late payment, the EU Directive 2011/7/EU provides for statutory interest as a redress procedure for the aggrieved party in the Supplier agreement. According to this law, a Supplier is entitled to interest for late payment from the day following the date or the end of the period for payment fixed in the contract.

At this point, businesses are dealing with the increased cost of operation brought on by various factors including the cost of electricity, fuel and high taxes. Citizens, on the other hand, are dealing with an increasing cost of living. We cannot afford to aggravate this by reducing businesses’ capacity to function productively.

Government must act fast on this matter and salvage our position as a preferred investor-destination in Africa.

The writer is the Chairman of Kenya Association of Manufacturers and can be reached on This email address is being protected from spambots. You need JavaScript enabled to view it..  This was first published as an opinion piece on the KAM website on 23rd August  2018.

There has been advocacy on delayed payments and you can read more about this issue here Retail Trade Sector Regulations and Code of Practice - Retail Trade Association of Kenya (RETRAK).

Posted On Thursday, 11 October 2018 08:41
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