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Rethinking Kenya’s industrial manufacturing model post Covid-19

OPINION
By Chris Oanda | May 10th 2020 | 3 min read
By Chris Oanda | May 10th 2020
OPINION

It is often said that one must not waste a crisis but use it to create a new and brighter future.

The current Covid-19 pandemic has thrown everyone off balance.

Several creative initiatives have also been developed to confront this new monster with most frantic activities being in the healthcare sector.

There is no doubt that the healthcare global value chains have been shocked out of their traditional alignment.

China, the global manufacturing centre, is facing hostility led by the Organisation for Economic Co-operation and Development countries and India - with many threatening punitive trading fines for losses arising from Coronavirus that originated from Wuhan city.

Nobody quite knows what the new globalisation model will look like.

But many opine it will be a new chapter with an inward-looking global trade.

Rethinking and reshaping the emerging global supply chains and the industrialisation matrix is the new challenge.

It has now turned out to be both private and public sector policy and boardroom preponderance laced with nationalist tendencies stretching from Argentina to Alaska, Russia and New Zealand. Where is Africa and the African Union in all these moves? The Covid-19 pandemic has exposed the continent’s poor health systems and laid bare its inadequate capacity to meet many of its basic needs for medical and equipment supplies.

Historical records don’t give much confidence that Africa will make decisions which will take advantage of the emerging realignments.

In the wake of the biting shortages of medical and pharmaceutical products worldwide such as ventilators and coronavirus rapid test kits, innovative setups of new manufacturing capacity have sprung up where none existed.

In Kenya, students invented a ventilator at Kenyatta University, face masks were being manufactured by various textile firms such as the Kitui Women Group. Sanitisers are being produced by beer breweries and petroleum products manufacturers. In the US, car manufactures such as General Motors retooled their plants to manufacture ventilators to meet biting shortages.

In Senegal, affordable rapid test kits were being manufactured overnight for Sh107! Establishing new manufacturing centers is easier said than done!

National policies

Actualising the same on a sustainable commercial scale requires a convergence of national policies, development of supportive sub-assemblies, relevant skills, competitive pricing and market.

Considering that existing capacities are not likely to shut down in China and India, with their low production costs, becomes the first mental roadblock to overcome. Closer home, manufacturing could benefit from local sourcing.

The 30 per cent preference is, however, far from being achieved due to lack of capacity for local manufacturers and service providers to absorb this spend that exceeds Sh500 billion annually.

Despite these shortcomings, Kenya is best poised to take advantage of this crisis to deepen its role in the supply of products as the manufacturing hub for East and Central Africa.

Outside of South Africa, Egypt and Ethiopia, there are few bases with an ecosystem to build on this crisis like Kenya. The realignment of manufacturing centres way from China is also a golden opportunity that our leaders must embrace. Again, attracting foreign investment with a deliberate transfer of technology has worked for China and Asia. It can work for us too.

The writer is a director, Global Procurement Academy and IFPSM president-elect

Covid 19 Time Series

 

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