Dr Ndii on Kenya bellycrats pervasive incompetence

[RV Pundit]

Meaning our service sector is innovating more. Equity halts new mortar and brink branches.
http://www.businessdailyafrica.com/Corporate-News/Equity-halts-new-branches-as-it-banks-on-digital-expansion/539550-3412508-6regaf/index.html

[MOON Ki]

Meaning our service sector is innovating more. Equity halts new mortar and brink branches.
http://www.businessdailyafrica.com/Corporate-News/Equity-halts-new-branches-as-it-banks-on-digital-expansion/539550-3412508-6regaf/index.html

I.e.

The app will also enable clients conduct various transactions including loan applications, paying bills, buying and selling shares as well as procuring insurance.

Where's the more innovation?

[RV Pundit]

If you wouldn't tell an innovation if it hits your face.

I.e.

The app will also enable clients conduct various transactions including loan applications, paying bills, buying and selling shares as well as procuring insurance.

Where's the more innovation?

[MOON Ki]

If you wouldn't tell an innovation if it hits your face.

It took me a few minutes to translate that sentence into English and then parse it to determine the (intended) meaning.     Anyways ... why don't you hit me on the face with it, and we'll then see whether I can tell or not: what exactly is  the innovation here?   

[RVtitem]

http://www.uneca.org/sites/default/files/PublicationFiles/tipa-full_report_en_web.pdf ). It aims to serve as a guiding tool for using industrial policy in Africa.

http://africasacountry.com/2016/06/african-economies-and-the-lack-of-a-targeted-industrial-policy/

[MOON Ki]

In terms of economic development, most African countries are operating below the least developed country income threshold of $1,035 per person. While developing countries in East Asia, most importantly China, have been lifting millions of people out of poverty at break-neck speed, In 2011, 69.5% of people in sub-Saharan Africa were living on less than $2 a day, only three percentage points lower than in 1981. As a result, no internationally competitive manufacturing firms in Africa, so the continent desperately needs industrial policy. The report summarized in this post is the result of work I did with Dr  Ha-Joon Changand Dr Muhammad Irfan, for the UN Economic  Commission for Africa. Titled Transformative Industrial Policy  for Africa (PDF- http://www.uneca.org/sites/default/files/PublicationFiles/tipa-full_report_en_web.pdf ). It aims to serve as a guiding tool for using industrial policy in Africa.

http://africasacountry.com/2016/06/african-economies-and-the-lack-of-a-targeted-industrial-policy/

In 2015 and 2016 the World bank has issued two very interesting reports that are relevant here.   

One is on Africa as a whole; it notes that at the time African countries became independent, the world's poor were mostly concentrated in Asia, but by 2050 Africa will have cornered that "market".

The other is a very detailed report on Kenya and "shared prosperity".  The report notes that while some are jerking off over GPD growth, the reality is that this is not making that much of a difference in poverty levels---that while finance, ICT, and other high-end parts of the "service" sector contribute to GDP growth, but they don't create many jobs and so do little for general poverty ... that what is needed is the type of economic development and job creation that will lift the masses out of poverty.

The reality is that if one looks past "GDP per capita" and "we are now a middle-income country!" and instead looks at where most Kenyans are employed and how much they make, the situation is quite grim. People need to look beyond "Bank introduces app, no more tellers!  Wank, wank, wank!" sort of thing.

Recently, The Standard has carried two very interesting articles:

http://www.standardmedia.co.ke/business/article/2000217055/many-kenyans-trapped-in-poverty-despite-economic-growth-says-report

http://www.standardmedia.co.ke/business/article/2000213076/despite-steady-wealth-creation-kenya-lags-behind-its-african-peers-in-reducing-poverty

Kenya lags behind sub-Saharan Africa in poverty reduction, as uneven wealth distribution widens the rich-poor gap ...  additional wealth generation has benefited only a small section of the population, leaving millions of low-income earners trapped in cycles of poverty.

What I found most astonishing about those was not in the facts, which I already knew from other sources; instead, it was the lack of anything resembling national concern on such matters.   Even at a very basic level: for example, both articles have a total of 3 comments from readers; compare that with comments on articles about politics and "money has been poured to finish our man".   

The "leadership" ought to be leading, but their concerns  never go beyond fleecing the sheep.    What national policies, plans, and actions, do we have in place to lift the masses out of poverty?  

[MOON Ki]

Bangladesh and SriLanka for example.

Which "destinations" do you have in mind, and what are they currently producing?

The other part of the question was "what are they producing?", the point being that Kenya need not compete on the same basis.    I also believe that labour costs are higher in Sri Lanka.  Anyways ... let's try to work with some concrete and specific information.   If you go here http://www.industrialization.go.ke/index.php/downloads/282-kenya-s-industrial-transformation-programme you will find a summary of Kenya's "Industrial Transformation Programme", and on page 8 of that, under "Textiles and Apparel", you will find this:

Our labour cost is relatively cheap compared to that of Asia, and our preferential access to global markets creates a cost advantage that appeals to buyers as they look to diversify their sourcing base.

So it t looks like Kenya is well-placed for that sort of thing, and we are also told that there is the opportunity to "generate an additional USD 140 to 200 million in GDP and create 105,000 jobs".    Excellent.   But we also learn that

Despite its advantage over other low-cost countries, Kenya accounts for only 0.4% of the USD 84 billion American textiles market.   Bangladesh, a low-cost favouite, is approximately 9% more expensive that Kenya but commands 6% of the US market".

So what exactly is Kenya's problem?   I believe it's the kula nyama approach.   Consider Rivatex, supposed to be spearheading the "textile" revival but actually just another example of getting universities involved in questionable activities.   Last year we had this:

Eldoret, Kenya - The Government has set aside Sh680 million to revive and expand operations at the Rift Valley Textiletextile plant and purchase equipment to facilitate operations at the cotton industry

http://www.standardmedia.co.ke/article/2000170068/sh680-million-set-aside-for-reviving-rivatex-mills-in-eldoret-deputy-president-william-ruto-says

And while talking about the textile plant and the cotton industry, the Hon. Deputy President was also on a secondary mission:

Speaking during the launch of the pilot laptop and tablets assembly project at the Rivatex plant, the Deputy President said there was need to focus on manufacturing.

With a little note for the Luddites:

Fast forward to 2016: Here is the latest on Moi University and Rivatex:

Controversy-hit Moi University could have lost up to Sh1 billion in one of the worst suspected corruption scandals in a public-owned institution of higher learning, a new audit seen by the Sunday Nation reveals.
...
The government report released last month raises the red flag over Sh600 million in questionable transactions between the Eldoret-based university and the Rift Valley Textile (Rivatex),

http://www.nation.co.ke/news/Audit-reveals-Sh1bn-loss-at-Moi-varsity/1056-3401960-format-xhtml-cvvaqe/index.html

Textile plant, cotton industry, laptops and tablets?  Later. For now, kula nyama or meza mate.   

[RV Pundit]

Here we go with googling research studies and newspaper articles to prop nonsense. There are tonnes of research papers and articles supporting all viewpoints.

[MOON Ki]

Here we go with googling research studies and newspaper articles to prop nonsense. There are tonnes of research papers and articles supporting all viewpoints.

In that case, you shouldn't have trouble finding a few tonnes to support your "sense"---such as the "many examples of countries that have moved to developed world by focusing solely in services" and how Kenya will follow that path but then again (after we chase you around on the facts) it will be the rare exception, etc.  Put up a few from tonnes that support such, and we can then discuss them. 

Oh, and also comment on the bits above about Bangladesh (your example), Moi University, textiles, and the kula nyama there.  Put up a bit of the "tonnes of research papers and articles supporting all viewpoints".     

[RV Pundit]

We are not discussing nanotechnology or something that obscure where we need research papers to back up our arguments. We are talking commonsensical issues. I have given you example of countries that became developed through service sector and all I have heard is that they were small. I don't know how small. Kenya small? or China small? or US small? Sychelles big or Singapor big?

As for Moi university futile attempt to jumpstart textile manufacturing and try copy Bangladesh - I am not suprised they didn't go anywhere. I doubt the money was stolen - it probably just sank coz it doesn't make economic sense to manufacture clothes in kenya now. That is you argument. My argument is that Moi university should have invested in areas where we have comparative advantage...like KU is doing..opening hotels, morgues & funeral homes, hospitals,shopping malls and such areas of the economy where an investor coming in here would invest in.

Our manufacturing sector is growing at 3% - why would investor pump money in there - while retail, real estate, financial and construction has been growing at double digit the last decade. It doesn't make economic sense. And it will only make economic sense when we deal with fundamentals stunting that sector - labour/union,rail, road, ports, power and whole supply chain.

In that case, you shouldn't have trouble finding a few tonnes to support your "sense"---such as the "many examples of countries that have moved to developed world by focusing solely in services" and how Kenya will follow that path but then again (after we chase you around on the facts) it will be the rare exception, etc.  Put up a few from tonnes that support such, and we can then discuss them. 

Oh, and also comment on the bits above about Bangladesh (your example), Moi University, textiles, and the kula nyama there.  Put up a bit of the "tonnes of research papers and articles supporting all viewpoints".     

[MOON Ki]

I have given you example of countries that became developed through service sector and all I have heard is that they were small. I don't know how small. Kenya small? or China small? or US small? Sychelles big or Singapor big?

Actually if you have been reading, you should have noted that many the objections to your examples (Estonia and Mauritius) were about more  than just size.   Faced with the facts on those, you changed from how Kenya will follow the "many examples of countries that have moved to developed word by focusing solely on services" to how Kenya will now be the "rare exception".    It's all up there.

On size: Seychelles is a country of 97,000 people.  That is an example of "small".   Very small.   Too small to be used as any sort of model for a country like Kenya.   

As for Moi university futile attempt to jumpstart textile manufacturing and try copy Bangladesh - I am not suprised they didn't go anywhere.

Let's separate the two things:

(1) Since you brought up Bangladesh, it was pointed out to you that according to GoK itself, Kenya cannot match that country in textiles, even though the latter has higher costs.   Why is that?   

(2) the Moi university involvement simply shows how clueless the government is in such matters and also, again, exposes the kula nyama approach.   

[RV Pundit]

I don't need to quote any country when our GDP is growing at 6%! and we are already low middle income country; and if we grew at same rate the next 10yrs; our GDP will 3-4 times now; 210-280B; or about size of South Africa. Kenya is already a rare exception if go by m-pesa, the well diversified and sophisticated service driven economy. In the next few years I believe we would have gotten everything needed to leapfrog. This was the hard part...but I feel by 2022...we will have the infrastructure, the population and the stability to quickly scale the development heights...move from 1,500USd per capita now..to 10,000 per capita.

I have given you example of countries that became developed through service sector and all I have heard is that they were small. I don't know how small. Kenya small? or China small? or US small? Sychelles big or Singapor big?

Actually if you have been reading, you should have noted that many the objections to your examples (Estonia and Mauritius) were about more  than just size.   Faced with the facts on those, you changed from how Kenya will follow the "many examples of countries that have moved to developed word by focusing solely on services" to how Kenya will now be the "rare exception".    It's all up there.

On size: Seychelles is a country of 97,000 people.  That is an example of "small".   Very small.   Too small to be used as any sort of model for a country like Kenya.   

As for Moi university futile attempt to jumpstart textile manufacturing and try copy Bangladesh - I am not suprised they didn't go anywhere.

Let's separate the two things:

(1) Since you brought up Bangladesh, it was pointed out to you that according to GoK itself, Kenya cannot match that country in textiles, even though the latter has higher costs.   Why is that?   

(2) the Moi university involvement simply shows how clueless the government is in such matters and also, again, exposes the kula nyama approach.