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Activists: Nairobi deal will kill companies and jobs

By Moses Michira | December 16th 2015 at 12:00:00 GMT +0300

NAIROBI: Activists and private sector players are warning that the conclusion of the Doha Development Round in Nairobi would kill 17 industries in Kenya and condemn over 700 million Africans to extreme poverty.

More than half of Kenyans could be plunged into joblessness after the collapse of domestic manufacturing if the deal is reached because it would encourage dumping of goods manufactured in low-cost jurisdictions.

Ugandan policy maker and author Yash Tandon said poor nations will be devastated by opening up to international free trade as envisioned by the World Trade Organisation (WTO).

“We will be finished,” Prof Tandon said in a breakfast meeting with journalists in Nairobi, in reference to the position outcome of agreement that eliminated protectionism.

“We in Africa must stop this from happening,” said the lecturer and author of ‘Trade is War’. A deal on unrestricted market access is eminent according to representatives of the member countries and WTO officials.

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In the recent weeks for instance, Kenyan poultry farmers have claimed that eggs imported from South Africa were killing their businesses, forcing average retail prices down by 30 per cent.

Poultry feeds, which make up the single largest cost for chicken rearing, are much cheaper and thereby ensuring the cost of egg production is a small fraction of the Kenyan price.

Taxes on the imported eggs do little to prevent South African eggs from selling below Sh10 each, even after factoring in production expenses, transport, taxes and profit margins shared out by players in the egg supply chain.

POORER COUNTRIES

Ideally, under the WTO vision, the South African farmers should be free to sell their eggs in Kenya without any restrictions or taxes. It is the scenario that activists like Tandon and local producers through the National Chamber of Commerce and Industry lobby are fearing.

Agricultural subsidies granted to farmers in the developed nations such as the US, European Union and Japan significantly cuts their already low production costs, making a case for protectionism in the poorer countries.

Tandon warns that Kenya will be disgraced in the years to come should the tenth Ministerial Conference that is underway in Nairobi strike a deal. Tandon’s stiff opposition to opening up borders to international trade was echoed by Deodat Maharaj, the deputy secretary general in charge of Economic and Social Development at the Commonwealth Secretariat.

raw materials

“If you do not have the capacities at the national level, you cannot participate and compete effectively,” said Mr Maharaj of the expectation of poor countries to fully open up their markets to international trade.

Poorer nations do not have capacities to process their raw materials for instance, putting them at a disadvantage from the start. Kenya and other developing countries would be setting themselves up for the ravages of market liberalisation.

As an indication of how bad things could get, most of the packaged foods sold in developing nations are actually imported from first world countries. “We can’t be a market for everybody,” Kipyego Cheluget, the assistant secretary general of Comesa said. 


Doha Development Round world trade organization (wto)
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