Needed: Ties that bind manufacturing, agriculture
Kenya needs to do much more than it already is to ensure the marriage between agriculture and manufacturing is consummated.
For far too long, policy makers have approached agriculture as though it only involves injecting seed in the womb of the earth.
As a result, although agriculture remains a key driver of the economy – and contributes the lion’s share to Gross Domestic Product – it has not been treated holistically,.
This, in part, explains why it has become more expensive to produce say eggs or chicken in Kenya and why imports, sometimes from as far as Brazil, are far much cheaper than locally grown or produced agricultural goods.
Part of the problem is the link between agriculture and manufacturing has not been strengthened.
Yet, if it was, two things would happen. First: contribution of manufacturing to GDP would increase significantly, thereby creating more quality jobs, reducing poverty and increasing prosperity.
Second: manufacturing would in turn lead to better agricultural practices by first coming up with tools that can make farming more efficient and profitable and second, by raising quality of produce needed for agro-processing.
At present, manufacturing accounts for less than 10 per cent of GDP yet, through greater synergy with agriculture, its contribution could grow by as much as 20 per cent, probably more.
Because of this disconnect, the sector continues to underperform and, by extension, fails to benefit from the potential that agriculture offers.
One confounding challenge has been that although we pride ourselves as an agricultural economy, we have been perennially importing nearly all tools we need to work the land and make it yield fruit.
This ranges from simple implements such as jembes to complex equipment such as harvesters, and inputs like fertiliser.
Yet, with targeted synergy and policy direction, it is possible to encourage local production of these tools and inputs and to make importation so expensive it would incentivise importers to transform themselves into manufacturers.
As it is, simple implements sold in hardware stores even in remotest part of the country are imported from countries like China.
That means, instead of creating jobs in Kenya, rural small scale farmers are sustaining industrial workers in Asia.
From a national interest view, this does not make sense considering high levels of unemployment locally.
In the past, there were local companies such as Kalu Works, which used to manufacture such basic tools but due to a difficult operating environment for local businesses, they have run aground.
Similarly, public institutions like the Kenya Industrial Estates, which used to incubate emerging local manufacturers, have been underfunded and badly managed over decades, making it impossible for them to discharge their mandate.
Looking at the two sectors holistically and historically, there was a time when we got the mix right.
Those were the days when industries such as Kisumu Cotton Mills, Rivatex, Raymonds and Pyrethrum Board of Kenya experienced their biggest boom, leading to growth of urbanisation.
Their demise led to a spiral effect that hurt other sectors, particularly farming.
For as long as the industries were running, the economy was growing, jobs were available and the middle class was expanding.
When wheels of progress were deflated, all these gains were either lost or reversed. Now, we are back to bemoaning lack of jobs, increasing inequality and reduced quality of life.
Yet, if we revisit history and find out what we used to do right, not only will we rediscover the secret of job creation, but also put the economy of the path of achieving both the Vision 2030 goals and Sustainable Development Goals.
The other policy shift the country needs is to create greater collaboration between agriculture and manufacturing on the one hand, and research and development on the other.
For far too long, the government has turned a blind eye as public officials convert public land set aside for research into private real estate.
Already, the pinch of this wanton trend is being felt in such consequences as the current countrywide shortage of seed potato.
In the long term, these sins mean we will continue to be a net importer of food and agricultural produce, and thus never be self-sufficient in feeding ourselves.
It also means our industrialisation will never take off and we will remain a low-income, highly-indebted country in the foreseeable future.
— The writer is a partner and head of content at House of Romford. [email protected]