Rural counties can spur growth of new industries

Opportunities are domiciled in “productive” sectors such as agriculture, livestock, forestry, and mining. FILE photo | nmg 

By GEORGE WACHIRA

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Summary

• A good number of devolved units have sectors that are crying for value addition.
• I strongly believe that the urgency and priority for Kenya is indeed in the many value-adding and jobs-multiplying manufacturing opportunities based on local resource inputs.
• And these opportunities are domiciled in the “productive” sectors such as agriculture, livestock, forestry, and mining which are in rural counties.

Developing new industries is an effort with long lead-times. Historically we have not produced remarkable results in manufacturing because policies, strategies and efforts have not been correctly aligned.

Moreover, we appear to spend too much time enunciating challenges besetting manufacturing— cost of doing business, cost of energy, non-tariff barriers, cheap imports etc— instead of emphasizing practical realizable opportunities and quick-wins. Further we have not creatively segmented manufacturing sector for optimal national benefits.

We tend to focus on the elusive high-tech manufacturing and equipment assembling segments by foreign investors which, although they are rich on technology transfer, may be using more imported than locally produced inputs.

These may not also be strong on job numbers and net foreign exchange balance.

We need to define and prioritise our target niche manufacturing segments. And I strongly believe that the urgency and priority for Kenya is indeed in the many value-adding and jobs-multiplying manufacturing opportunities based on local resource inputs.

And these opportunities are domiciled in the “productive” sectors such as agriculture, livestock, forestry, and mining which are in rural counties. The industrialisation officials should therefore be seen to be out there working hand in hand with ministries responsible for these sectors, and also with county officials.

Let us analyse this agro-manufacturing case study from Nyandarua County. A few weeks ago the county stated that they will grow surplus Irish potatoes to manufacture “starch” and animal feed by-products. This is an agricultural value chain with a huge potential for jobs not only in this county but other similar potato growing areas.

Indeed, Eldoret had a similar factory which used maize to make starch, syrup, yeast, and animal feed by-products. It supplied breweries and pharmaceutical industries with starch, and syrup to confectionery factories. The factory closed down in early 2000, probably because of challenges listed above.

Other obvious starch crops in Kenya are bananas, cassava and sorghum, and these are equally candidates for food security synergy.

Another excellent industrialisation case study is the bamboo plantation enterprise in the semi-arid areas of Tharaka-Nithi County. I understand a factory is planned to manufacture paper, pulp, textiles, energy products, and wood-related products from bamboo. This is a high job content forestry project that also increases forest cover, another pressing national environmental issue.

How can the industrialisation officials together with their counterparts in the agriculture and forestry departments support the establishment and expansion of the two county projects to achieve maximum and sustainable potential, and replicate similar efforts in other parts of Kenya?

On the minimum, assistance is needed for technical and marketing feasibility, sourcing of investment capital and up-scaling the projects to achieve economies of scale. The ministry should then work on regulatory and where necessary fiscal facilitation for quick and sustainable results.

READ: Use value addition to cut post-harvest losses

The two case studies are just a few of many rural based value adding manufacturing opportunities which require feasibility studies which can be summarised in investor promotion pamphlets. This would be a more proactive investment conferencing approach than merely discussing Kenya’s investment climate.

As a start, it would help to organise a brainstorming rural-based industrialisation forum, co-sponsored by the departments of industrialisation, agriculture, forestry and mining, and county governments, to outline a co-ordinated and prioritised effort to drive value-adding manufacturing across Kenya.

This is essentially an inter-ministerial effort, which calls for the Cabinet to decide how best to coordinate and monitor progress. And this sounds like a candidate for the Presidential Delivery Unit stewardship for objectivity and independence.

Local manufacturing, international trade, and diplomatic relationships are becoming very inter-related, and I believe our top leadership is working very hard in this area to maximise value for Kenya.

There is also the newly signed Africa trade pact that could spur more opportunities for our manufacturing sector. We also need to closely watch the new US-China trade wars just in case there are new opportunities for our manufacturing and trade.