Small business in Kenya is one sad story

“We will never sell our freedom for capital or technical aid. We stand for freedom at any cost.”

  -Tom Mboya, July 1 1958, Makerere University.

It means everything to be a Kenyan citizen. We hold our place in the African hierarchy with pride, regardless of the adversity and the shame we face.

If Pan-Africanism had endured, and Africans had spent more time improving relations while crafting a unique ideology to empower ourselves socio-economically, then Tom Mboya's statement would have been our mantra, an unfailing African self-belief.

We could blame Mother Nature for instilling the prey-and-predator dynamic that is more common among wildlife within us.

We are, after all, a society that has perfected the complexities of understanding each other's cultures as well as our own. Yet we wilfully play ignorant, just so that we can brew hate and violence.

The tribe is Africa's most beautiful curse. To the well travelled, our tribes and cultures are lauded for their aesthetic value, yet for us, tribe is the identity we bring to politics, business or any other facet of our lives that is exploitable.

While we are distracted into hating each other, the world is busy moving forward, and for the masters that pull the business strings, business is booming. We have forgotten ourselves and what we came to do.

Government can be defined by one key task: to collect tax, cess, excise, duty as well as all manner of fees, so that they can be redistributed through a public welfare system that cobbles together our real basic needs (food and water security, education, healthcare and security).

Before we dream about building overpriced infrastructure, we need to master those basics. Whatever is left over, and it should be plenty, would meet our infrastructural obligations and cover government expenditure with the surplus left over to start paying our debts.

However, it seems simpler to go the faux-development route of megaprojects mired in corruption that cost us more than they are worth, and add very little value to the greater economy.

This neo-colonialism alone is responsible for killing local entrepreneurship in Kenya. How do we get the scales right again? First we need to understand the problems.

GOVERNMENT DOESN'T GET ENTREPRENEURSHIP

Very few people understand that Government has a very poor grasp of, and interest in, local entrepreneurship.

Currently, local entrepreneurship is a rudderless ship, without a captain who understands its mechanics. Both our unwritten and written policies on small business are enacted and enforced by civil servants and elected leaders who, despite being successful businesspeople, are poor entrepreneurs.

That poor understanding forces us to look outside for investors and Foreign Direct Investment (FDI) out of desperation.

The most “revolutionary” development for entrepreneurship in Kenya is that it takes fewer days to register a business than it did last year, and this faces revision again next year.

Yet you still have to go to the same number of different offices in different parts of the city to stand in different queues to actually get rubber-stamps, certificates and other registration paraphernalia.

Yet the government cannot set up a single office across each county housing representatives from all the different departments one needs to grace to start a business, with all the application forms in one handy pack.

Since we are digitally inclined, we can even manage a single portal with all the key functions of the different departments in one place. It hasn't happened.

Kenya's entrepreneurs need their President to be the loudest voice on entrepreneurship. He alone needs to handle this docket to ensure that he solves the key problems that depress Kenya's income-generating abilities.

In this respect, he needs to channel Winston Churchill's attitude during the Second World War, rallying Kenyans with every potential resource available to start businesses.

We do not need conferences or trips abroad, but simply a person turning up to listen and to resolve.

MULTINATIONALS OVER SMALL BUSINESS

We have a weakness for elitism, and must “selfie-drop” every time we meet a celebrity. So too with government leaders. They too want to be seen with the Captains of Industry, the rock-stars of the economy.

So keen is their quest that meeting an International Renaissance Man earns them extra points. This is where ego steps in, as well as foreign corporate money and muscle.

We are dazzled by numbers, billions we are always told, with immense savings and benefits to the public, with our children on the fast track to jobs. Except, almost none of that ever happens.

When it does, it is nowhere close to the advertisement and it costs more than we were told to implement and manage.

If it is technology, it is deployed by a “preferred partner” whose field staff earn a pittance for doing the bulk of the work. That eco-system does not permit employees to become employers since it is the norm to exploit said talent and pay them slightly better than minimum wage.

Tinkerers have nowhere to perfect their talent, yet we would rather build a city that will hopefully attract foreign multinationals here to employ back-office staff, and export any profits back to their home countries.

This, obviously, is a very thin line that weaves between free-for-all and protectionism, but it is borne of reality. Developed countries strictly control, and in many cases ration, foreign investors by using a very visible glass ceiling  – the visa. One cannot wake up in the morning to dash to New York or Paris at the drop of a hat.

Yet some of the the opportunities we are doling away in the name of FDI are keeping capable, trained youth unemployed, forcing them to indulge in crime against a backdrop of worsening economic disparity. Without sensible rationalisation, this will only create animosity. 

BANKS DON'T LEND TO STARTUPS

The etiquette of the banker has remained resolute and constant; bankers simply must protect their business at all costs.

This principle neatly ties into another, that banks do not loan new businesses money since they have no proven track record, and in many cases, lack collateral to secure financing.

Worse, in a volatile economy that has record lending rates against poor public sector and corporate performance, it's no big secret that banks are forced to hold on to every penny they can. Raising capital against equity is even more expensive and riskier, as shown by recent events. Yet, it continues to get worse.

The would-be-local investors, the millionaires and the billionaires of Kenya have very little faith in their fellow citizens. Their cowardice echoes resolutely among entrepreneurs.

There simply isn't enough capital being made available to build desperately needed cottage industries that would boost the lower and middle classes.

China has invested itself to near bankruptcy and is currently facing economic woes, but they have backed local business well enough to gain a near-global monopoly on manufacturing.

Without that level of capital being committed to entrepreneurial efforts in Kenya, we are simply passengers in a country we own but have little control of. Entrepreneurship is thus relegated to the one per cent that can raise capital by any means necessary.

Government is better off using enterprise fund money to insure high-risk loans offered by banks to start-ups and small businesses, instead of running wasteful funds.

It might even be more prudent to hand over the funds equally among banks as a loan program managed by the banks, who have far better experience with  funds management than government.

With nobody backing entrepreneurs with a solid plan and capital, the disenfranchised youth will continue harbouring animosity over the fact that they have no stake in their country.

We need to stop repeating the same mistakes over and over again. We also need to shift our focus to what we need to be doing over running around, doing too many unnecessary things at the same time.

This is costing the youth opportunities that they desperately need to empower themselves.  We need to stop celebrating superficial wins, since that blinds us from seeing the beginnings of failings of corporations like Kenya Airways or Mumias Sugar or even Uchumi.

Due to our pride, we would rather keep throwing good money after bad in mismanaged institutions than hold the office bearers accountable.

Kenya has become a dangerous free-for-all and anyone, background unchecked, is more than welcome to launder their money in Kenya under the guise of being a “foreign investor”. This has started stirring the “us” versus “them” conversation.

After all, it isn't easy for struggling Kenyans to see outsiders benefitting from opportunities they are perfectly capable of handling. We keep imagining that we need cosmetic surroundings to function, yet the average entrepreneur doesn't need more than a table, chair, power and an internet connection to manage a business.

Our beautiful savannah is straggling under staggering poverty. We remain cursed with high income disparity, and ever-reducing opportunities.

We need new people with new ideas that are genuinely revolutionary and can reach the poorest of all.

We need a voice that has the moral courage to remonstrate with the President for the government's failing. The youth need a far better Kenya than the one they have.

Thiarara Ng'otho is an independent IT consultant who creates solutions for ICT-based businesses in Kenya.