Manufacturers deepen Africa presence

Traders at a food market. The rate of inflation stood at 4.92 per cent in June. FILE

 

By Betty Maina

It is pleasing to note the strides that Kenyan manufacturers and the business community in general are making in expand presence and take opportunities in African markets.

Kenya Association of Manufacturers (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 to expand by investing in Ethiopia.

The current government is clear about focusing on opening more trade opportunities in Africa. Currently, Kenya exports 45 per cent of its total world exports to Africa and these only account for 15 per cent of the trade in Africa and there is an opportunity to increase the market share in Africa to 40 per cent.

While noble, the strategy to extend Kenyan products’ footprint to more African markets 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 $1.6 trillion and is expected to rise to $ 2.6 trillion in 2020 with a spending power of $ 1.4 trillion.

The continent’s combined working age population in 2040 of 1.1billion 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. Kenya needs to strengthen the missions where the country trades so that the country may maximise 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.

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.

This week’s 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 14 per cent of Africa’s population. However, the two contribute less than five per cent of Africa’s GDP.