On the eve of Prime Minister Theresa May’s visit to Kenya last month, Vauxhall MP Kate Hoey wrote a letter to Britons living in the country in which, among other things, she urged them to “take advantage and try to negotiate access to the beef industry in the United Kingdom.”
Perhaps President Uhuru Kenyatta would reciprocate soon by giving Vauxhall, a British automaker, a license to build their vehicles in Kenya.
They would be following in the footsteps of Peugeot of France that started an assembly factory of their 508 Sedans as well as 3008 small SUVs in Thika last year.
It is perhaps with this in mind that the British MP sold the idea of her compatriots taking a stab at the beef market.
In most of the trade deals that the country has cut with other nations lately, they seem to be inclined to manufacturing.
Dominant manufacturer
This begs the questions why are we still obsessed with manufacturing long after the Nyayo car project got stuck. Will the UK Premier Theresa May on her handbag hunt for post-Brexit deals through Africa, help our country? It remains to be seen.
Perhaps we can borrow a leaf from our former colonial masters. In actual sense, Britain is no longer a manufacturing nation. A hundred and fifty years ago, they were the world’s dominant manufacturer and exporter but they seem to have changed tack and are moving with the times.
The UK is now in a post-industrial state. The few physical things they export mainly rely on brains, primarily aerospace goods and pharmaceuticals.
What the UK does supremely well is to provide services of all kinds. If you are still stuck in 1978, you may be forgiven for thinking that livelihoods in a Third World country like Kenya can only be sustained by subsistence farming. Take a look at the newspaper headlines last month. They were awash with “big fish” being arrested for messing with the maize industry recently while industries like ginnery gave up the ghost a long time ago, joining the cotton industry in the graveyard of hitherto vibrant industries.
From this analogy, one realises agricultural goods like beef are not the way to go. While Germany is still stuck to manufacturing cars, a boring and capital-intensive business, Britain is providing services - a flexible brain-intensive business, and one much more in tune with the 21st century.
Kenya should follow Britain’s lead and to this end by leveraging key sectors that are the next frontier for economic growth instead of trying to persuade a sullen Maasai in Narok to try to fatten his cattle for export to Liverpool.
One of these sectors is banking. We have long hailed the Equity Bank model in Kenya and the insane profits that Co-operative Bank makes, thanks to Saccos. It is, however, a fact that many smaller banks - Chase Bank, Charter House Bank, Dubai Bank, Euro Bank, Kenya Finance Corporation and Imperial Bank - have already drowned or are wading through the murky corporate waters due to poor management.
The big boys, on the other hand, were collectively fined close to Sh400 million for moving over Sh3.5 billion of the National Youth Service scam.
Investment banking, it seems, is the way to go. If ever there was a golden goose for the finance sector, this is it!
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Personally, I have no love for rich bankers, but the services franchises with London investment banks may eventually bring a flood of money into the country, especially if we can make ourselves the investment financial services hub of East Africa.
We should seek to open satellite offices of London investment banks like Barclays Capital in Kenya instead of the State relying on the taxes of traditional players like Standard Chartered Bank.
Education is another area we ought to maximise on. Of the world’s top 10 universities according to the QS 2018 ranking, four are in the UK (Oxford, Cambridge, UCL, and Imperial) In the Trump era, more “brainy Kenyans” will look to England, not America for an education. Do not underestimate how important this is. This group of individuals will be key to driving the economy past the Vision 2030 economic blueprint.
The writer works for The Standard
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