CS Mwangi Kiunjuri: Kenya losing million in revenue for allowing monopolies

Cabinet secretary Devolution and Planning Mwangi Kiunjuri flanked by Director, United Nations Economic commission for Africa, Eastern Sub-region Antonio Pedro (left) during the opening of the intergovernmental committee of experts held in Nairobi. PHOTO: WILLIS AWANDU/STANDARD

NAIROBI: Kenya is losing billions in revenue by letting investors have monopoly over the industries they create in the country, the government has said.

Despite producing the raw materials for these industries, not even the adjacent communities are said to be benefiting from them.

These investors are said to leverage on lack of strong institutions to implement favourable policies that would have in turn protected local industries.

Speaking at the 20th United Nations Intergovernmental Committee, Devolution Cabinet Secretary Mwangi Kiunjuri said it is a high time Kenya takes up product processing in order to control the industries and increase the value chain and leverage on intra-Africa trade.

This is considering the recent fall of commodity prices in the global market on China's economic crisis (which is considered the largest trade economy) and drop in oil prices.

"There is no value trading raw materials with our African neighbours unless we have them processed to diversify the economies then we shall depend less on global market," said Kiunjuri.

However, Africa needs Sh5 trillion (USD 50 billion) to be fully be industrialized which has made East Africa contribute just two percent to global trade which will be standing at averagely Sh1,800 trillion (USD18 trillion) by 2030.

"Commodity price fluctuation has exposed our countries to exogenous shocks, producing macro-economic instability which many are ill equipped to master. Without a major infrastructural adjustment it will be difficult to sustain development," said UN Economic Commission Director for Sub Saharan Africa Antonio Pedro.

Kiunjuri lamented that due to Kenya's industrial incapacitation; many experts have been migrating overseas for greener pastures: "Then when investors come to the country they are forced to source expertise from their own countries yet we are rich in human resource."

He emphasized that foreign investors should be made to sub-contract with local industries to increase their capacities for a direct impact on economy especially with devolution in place: "Nevertheless, we should leverage on our rapid urbanisation, growing middle class and infrastructure and modernise agriculture to be more competitive globally."

In the conference, Kiunjuri was chosen the chair of the Intergovernmental Committee a position he will hold for a year. Kenya's devolution system is currently the case study of the UN Economic Commission on the role of decentralisation of institutions in promoting or hindering development.