Trading-up in East Africa: What will it take?
– Africa still plays a trivial role in international trade, accounting for only 3 per cent of global exports. Moreover, half of this share is fuel. The rapid growth in fuel exports doesn’t generate employment or improve human welfare in Africa. That’s why we need a trading-up study, argues NAI researcher Francis Matambalya.
He organised a conference in Arusha, Tanzania, on 18-20 June entitled “How can economic development be enhanced in Lake Victoria Region?” This broad theme necessitated an equally broad list of participants, including researchers, politicians, government officials, entrepreneurs and investors.
The trading-up study will map the resources of Eastern African economies and identify why they aren’t leveraged into production and trade. Researchers will also investigate gaps in popular investment models, which don’t seem to work in the region, by undertaking an opinion survey among local communities. With this information at hand, the researchers will be able to design a model to inform stakeholders.
One sector needing attention is finance. It is very difficult for minor entrepreneurs to get loans, since they can seldom give any guarantees. Without a guaranteed loan, entrepreneurs will have to pay almost 20 per cent in interest.
– Banks are making a lot of money from this and the government is now looking at the terms for loans. Tax holidays for exporting enterprises also have to be examined. Companies change names when the holiday expires so as to gain more free years, says Martin Mutuku, general manager of the Kenya Investment Authority.
Josefine Ombati is director of a mid-sized construction company in Kiisi county, southwestern Kenya.
She if one of very few women to run a construction company in Kenya. In her view, the male-centred culture of Kenya is a hindrance to female education. Where she grew up, women did most of the work in the households, as well as the fields.
– Women know very well how to work, they just lack training for doing business. We have changed tactics lately. Instead of shouting our rights out loud, we now reason with the men, explaining to them that empowered women lead to an empowered society, says Josefine Ombati.
Antony Kibe is a professor of agronomy at Egerton University in Kenya. During his research, he came across a gender-related project with good intentions that actually worsened the plight of famers in Kenya. It is the girls in the villages who collect firewood for the household. When the trees around the village ran out, the girls had to walk further afield in search of firewood. Consequently, they couldn’t attend school. The project therefore planted eucalyptus trees near the villages. This species grows fast and makes excellent firewood, and the girls had time for school.
– What the project didn’t take into account was that eucalyptus dehydrates the soil. Where eucalyptus grows, no crops can survive. This, of course, had major consequences for the village’s farming activities, Antony Kibe observes.