Kenya can expand industrial sector

By Anyang Nyongo

NAIROBI, KENYA: We may very well be involved in a futile debate regarding whether we should industrialise or not, or whether we should give priority to agriculture rather than to industry. I call this debate futile because it is misdirected, ill conceived and unnecessary. We have no alternative but to industrialise which also means that our agricultural production will also be industrialised and not entirely dependent on raw human labour, crude implements and natural gifts from God.

Since the industrial revolution in Europe in the seventeenth and eighteenth centuries, humankind has learnt one thing: that machines can do wonders. Where the naked hand takes ages to spin cotton into cloth, the machine does it in mere minutes. Where a candlelight can only provide light to one table electricity lights whole nations.

Kenya first came face to face with industrialisation when the Kenya-Uganda Railway was built. But the railway could only be viable, and the debts incurred in building it repaid, if there were economic activities paying for its use. Two things therefore happened: commercial farming in the Kenyan highlands was encouraged by the colonial state which subsidised the white settlers to do this; commerce and industry was also encouraged where the former Indian coolies came in handy to fit the bill with their knowledge, skills and entrepreneurship.

But while agriculture received substantial attention from the State at independence, the commercial and industrial aspects of the fledgling economy has always suffered at the vagaries of the market and finance capital. More tragic, however, was the liberalisation of the economy in the nineties, which wiped out Kenya’s indigenous industrial base, turning this country into a trading economy par excellence. Whatever industrial production exists today is substantially an extension of multinational capital concentrating in production under license, assembly plants, packaging and distribution within the East African market.

The truth of the matter is that the real indigenous industrialists and manufacturers were largely Asian at independence. They had limited political power and quite often felt insecure to deepen their capital investment due to the vagaries of politics. A good number moved to invest in finance capital just like the first batch of large-scale African coffee farmers did. But finance capital not supported by a strong industrial base very soon becomes usurious or speculative capital charging high interest rates to those engaged in equally speculative enterprises like the drug trade. We may therefore need to retrace our steps backwards and ask how we shall develop an economy where agriculture, commerce, industry and services are organically connected.

Notwithstanding WTO rules, we can protect some of our basic industries. Letting our ginning factories die and our cotton farmers go out of business because of importing cheap textiles was the most foolish thing we ever did. Given our tremendous endowment to produce fruits and vegetables it is equally foolish to import baby foods, rely on sodas as our basic refreshment drink and import oranges from abroad.

The US can afford to import oranges because the farms growing the oranges in Latin America are perhaps extensions of their own companies, or their banks have invested heavily in those farms. In other words, their economy is organically integrated with those farms. That is why when we liberalise blindly and dogmatically we easily play into the hands of multinational or transnational capital. We need farm implements for our agricultural production. But why import the machete, panga, sickle, axe and slash from China? What happened to our foundries and machine tools industries that were thriving even in colonial times in our major towns. When we say Kenya exports substantially to the East African market, what do we really export?

Some time in the mid eighties, Prof Peter Coughlin, Garishom Ikiara and I published a book on Industrialisation in Kenya. My contribution was to study possibilities and historical limits of import substitution industrialisation in Kenya. Then it was becoming fashionable to dismiss import substitution industries as mistakes that should not have been committed. They were said to be inefficient, non-competitive and unprofitable due to protection they received from the State. A good part of this argument was valid. My contention, however, was that the solution did not lie in opening up our economy for competition with no regard to developing our own internally integrated, and organically connected domestic economy. Hence it still blows my mind to find an axe and a wheelbarrow made in China in Nakumatt supermarket today.

We now have the potential of growing a knowledge based economy which can help us leap frog into becoming an advanced industrial economy. Take for example our village polytechnic. A student busy studying how to fabricate a chicken hatchery need not confine himself to what the teacher is drawing on the blackboard. He can go on the Internet and begin searching for how hatcheries are made and start a project on large-scale hatchery production. But he could not have done it without beginning from what currently exists, crude though it maybe, from the teacher’s blackboard. That is why simply opening ourselves for competition without having fully tested “the historical limits” of our import substitution industries “in the context of our time” was a big mistake.

At the moment, however, we do not seem to have a game plan for growing the economy. What happened to Vision 2030 and how do all these initiatives of laptops, youth funds, women funds and fertilisers from abroad fit into our vision of being a middle income economy by 2030? Shall we really make it? Certain things may, of course, just happen because people must do something to survive; but then we may find ourselves to be another Haiti with over 200 years of independence and little to show for it by the year 2030.