Now is the time to go and grab some economic opportunities

Monday November 13 2017

ECONOMY

Sugarcane is offloaded from a tractor at Chemelil Sugar Factory in Kisumu on September 12, 2016. What we must do is take the likes of Nzoia, Chemelil, Sony, Muhoroni and Mumias sugar firms’ operations and resuscitate them. PHOTO | TONNY OMONDI | NATION MEDIA GROUP 

By ROBERT SHAW
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After the best part of the year being held hostage to drought and electioneering, it is time to move the economy into a more proactive mode.

Providing more opportunities for the many people coming into the job market is as much about resuscitating existing activities and opportunities and creating new ones.

It is about looking at the drivers of economic and commercial activity and seeing where their performance can be improved.

SUGAR

Take the sugar industry, for example. Despite the vast swathes of land in Nyanza, western and the coast under sugar cultivation we import at least a third of our needs.

We produce some of the most expensive sugar in the world in those limping old factories when you take into account losses and bailouts.

Even more ironical is that much of our sugar growing belt is a sea of poverty and neglect due to the incapacities and inefficiencies of these dinosaurs.

There are newer, more efficient and productive operations that adhere to more commercial norms.

FACTORIES

What we have is a tale of two sugar industries and the challenge is to drag the monoliths out of the old world and into the new one.

The tale of two industries shows cane can be grown and processed much more efficiently and economically.

What we must do is take the likes of Nzoia, Chemelil, Sony, Muhoroni and Mumias sugar firms’ operations and resuscitate them.

That formula will inevitably involve a mix: Getting the government out of the activity of running sugar factories; considerable radical surgery to reduce bloated work forces, cutting inflated costs and replacing inefficient production methods.

It might also involve the merging of some operations and the diversification from total reliance on sugar production.

MANUFACTURING
While there will be some initial job losses the eventual outcome will be more opportunities in a more vibrant environment.

There are many other underperforming entities or lost opportunities in other sectors.

Manufacturing is plagued by high costs of production.

Some items literally cost more than imported equivalents even after being subjected to import tariffs.

In some cases, costs of agriculture are also too high.

TOURISM

If farmers cannot produce a 90-kilo bag of maize for Sh3,200 and make a reasonable profit then something is clearly wrong.

Indeed, there are those who argue that the NCPB maize buying price is actually on the high side.

In spite of Kenya having an amazing attractions, its tourism industry still suffers from major peaks and troughs and occupancy levels that, on average, are too low.

It needs more and more marketing but the industry also needs to take a hard look at itself vis a vis the increasingly sophisticated market.

TRADE

Kenya has become a major hub for the region.

Not only is it a major gateway for imports and exports, but also many regional operations are based here.

We must look at ways of making Kenya a more attractive place to operate in.

This entails reducing bureaucratic impediments and improving transport infrastructure, including Mombasa Port.

There are several other areas the incoming government needs to put under the microscope and redress.

DEBT

We are accumulating debt too fast and getting into the ever-increasing vicious circle of borrowing more to repay old loans.

Large debt diverts more money from activities such as education and health care.

Another important housekeeping measure is to go through project proposals and commitments and do a serious forensic appraisal on what value they actually have for the economy, and whether they are, indeed, value for money.

One obvious candidate is the proposed Lamu coal power plant.

This is all in the name of extracting better value from our economy by making its drivers more efficient and dynamic.

Mr Shaw is a public policy and economic analyst:[email protected]