A lesson in opportunity cost from Kenya’s situation today

Workers at United Aryan EPZ Limited on Ring Road off Thika Super Highway in Nairobi. The World Bank estimates that half of Kenyans will live in urban centres by 2033. PHOTO | SALATON NJAU 

By CANUTE WASWA

Have you ever thought about the origin of your favourite blue jeans?

An article in the Profit magazine indicated that in 1853, the California gold rush was taking place and many were in short supply. One Levi Strauss, a German immigrant in his 20s, left New York for San Francisco with some dry goods to sell but shortly after his arrival, a prospector wanted to know what
Strauss was selling. When Strauss told him he had rough canvas to use for tents and wagon covers, the prospector was disappointed because he wanted a pair of pants that could last.

Strauss had the canvas made into waist overalls. Miners liked the pants, but complained that they tended to chafe. Strauss substituted a twilled cotton cloth from France called “serge de Nimes.” The fabric later became known as denim and the pants were nicknamed blue jeans.

The above sprung to my mind because of a research I came across. The study done between last September and October interviewed 1,599 Kenyans. It was carried out by the University of Nairobi’s Institute of Development Studies and Afrobarometer, a research network that conducts surveys across Africa.

According to the study, more than half of Kenyans describe the current economic condition as very bad, with seven out of 10 saying the Jubilee administration had failed to create jobs.

Clearly, Kenya is facing a tough situation. The challenges are far greater than Strauss faced. We need to provide public services in areas where profit-making companies would never go, especially remote poor regions. We desire a more prosperous, inclusive and equitable society.

The survey comes at a time when Kenyans have questioned the bullish economic growth projections amid massive job losses in various companies. At least 47 per cent of Kenyans, the study showed, have gone without “enough food” at least once during the past year, with 76 per cent of Kenyans saying that the government had performed poorly in keeping prices of various items stable.

The way out of a situation like the one we find ourselves in can be summed up in two words: opportunity cost. Very simply, an ‘opportunity cost’ is what you miss out on when you choose to do one thing over another. For example, if you spend Sh2,000 on a night out, you miss out on the benefit of putting that Sh2,000 into a savings account.

Because of economic pressures, Kenya will continue to urbanise. According to World Bank estimates, half of Kenyans will live in a city by 2033. Devolution must support this huge demographic transformation and help make its urban centres world class cities.

We have all heard it. “Oh, if I had only acted on that idea back then, I’d be rich.” Or, “I had the idea in my head but never acted on it.”

What I read here is that we will have to make hard choices, change your attitude, behaviour and lifestyle. But the harsh reality is that it is unlikely that any decisions made on auto-pilot will result in a smooth landing.

Life is filled with the unexpected.

My feeling is that your Levi Strauss moment may just be hidden in there.

Mr Waswa is a management and HR specialist and managing director of Outdoors Africa.
E-mail: waswa@outdoorsafrica.co.ke