In Kenya, policymakers are urged to support the textile and leather industry

27 June 2022

There are numerous economic challenges that Kenya's newly elected leaders will have to face decisively from 10 August 2022, four of which are listed by The Standard: strengthening local production, renewing the textile industry, addressing the persistent challenge of leather and implementing microfinance

 

 

Firstly, we need to strengthen local manufacturing. The Kenyan Shilling appears to be on the ropes. Against this backdrop of a weakening shilling, the US dollar for vast reasons seems to be in short supply.

Some of the reasons may include demand for foreign currency to repay our national debt and the obvious scramble by manufacturers to purchase raw materials from overseas.

This has prompted the Kenya Association of Manufacturers (KAM) to raise concerns that its members are finding it difficult to access dollars at the official rates. Consequently, production costs in the manufacturing sector are skyrocketing. The country’s next leaders therefore must take firm steps towards lowering these production costs by targeting export market for Kenyan products as one of the viable solutions.

Secondly, we need to revamp the textile industry by intentionally developing the entire value chain. Due to the existence of the African Growth and Opportunity Act (AGOA) and its promising strategy, just imagine the economic empowerment that would come with the requisite production of cotton locally.

A great company like United Aryan which currently employs about 12,000 Kenyans would easily quadruple in their business and employment capacity. The leaders we elect must fit the bill to realise our grand textile dream.

Thirdly, we must address our lingering leather challenge. Kenya has the third-biggest livestock resource in Africa. Despite this, Kenya’s contribution to Africa’s leather production is a paltry 3.5 per cent.

According to the Kenya Leather Development Council, Kenyans buy up to 24 million pairs of shoes every year. Unfortunately, the bulk of this money goes outside Kenya as we are a net importer.

Egypt is one of the leading producers of leather products in Africa and the Middle East. Egypt’s ascension to the leather industry’s pinnacle did not just happen by accident. Egypt constructed the Robbiki Leather City that hosts multiple tanneries.

The city has provided 25,000 direct and indirect jobs. In this regard, Kenya must fast track full completion and subsequent total utilisation of the industrial leather park in Machakos County.

It is extremely unfortunate that this park has taken years to complete. We must elect leaders who will give Egypt and our neighbour Ethiopia a gracious run for their money when it comes to producing leather products.

Fourthly, we need to revisit microfinancing. Is microfinance really helping those who need financing most or does it create for them more financial problems down the road? The experience of motorcycle buyers leaves more questions than answers.

Six out of ten of all new motorcycle buyers are women. As the chairperson of the Motorcycle Assemblers Association (MAAK), I [Isaac Kalua Green, who wrote this article] have witnessed this phenomenon as mothers flock our premises to purchase motorcycles for their sons or to do a side business.

Nearly 65 per cent of these purchases are financed through microfinance arrangements whose cumulative interest rates is about 60 per cent per year. Indeed, the microfinance sector in this country is sinking into predatory territory.

About 35 per cent of the youth in Boda Boda sector are inevitably losing their assets due to the high interest charged. It is incumbent on our next leaders to disabuse Kenyans who are bleeding in the hands of most microfinance institutions.

Just as buyers scrutinise products before purchasing them, voters must carefully examine the leaders seeking their votes. Do they have what it takes to tackle challenges like the ones I have listed here?

Leadership is not a crown to be worn but a powerful tool for solving problems. Think green, act green!

www.kaluagreen.com

 


Paese: Kenya
microfinanza| pelle| scarpe| Tessile| Prodotti in Pelle

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