Dr Ndii on Kenya bellycrats pervasive incompetence

[RV Pundit]

Bryan, I think you understand economics enough to know economics of consolidation (scale etc) and to appreciate that London or Germany financial or industrial consolidation is going to be hard to replicate or compete against - the reason is that when you've got it all going - then everything else falls in place. Kenya cannot try to copy others - it has to work on it's advantage and slowly consolidate them - Nairobi has emerged as service giant in Africa - we can build on that and hopefully became London in 50yrs.

As for grovelliing...no serious industry is going to move there..unless the fundamentals are right. Nissan or Honda will care only about the bottomline. Not a politician trying to find jobs and gain political milleage for his people. If it make sense to manufacture in India or China or Germany...rather than UK..they'll go there.

Tony Blair should have instead be asking China's or Japan financial services to join London impressive financial services.

One wonders what's more sturdy in the long term,  the UKs amazing financial services or Germany's efficient heavy industries.

IN the meantime,  it's become very obvious that Tony Blair and Co convinced (grovelled?) the Japanese Nissan and Honda to set up shop in England and Wales.

Grovelling works.

[RV Pundit]

Here is NHIF trying to formalize the 12M- strong -informal sector. This is what we should focus on....rather than dreaming about becoming industrial power.
http://www.businessdailyafrica.com/NHIF-eyes-12m-informal-sector-workers-in-fresh-recruitment/539546-3395748-jmf43fz/index.html

[RVtitem]

According to Nation, Kenyan imports from China last year estimated at KES. 320 billion against export to China of KES. 5 billion. And it's projected to grow.

www.nation.co.ke/lifestyle/smartcompany/Kenya-full-plate-of-Chinese-imports/1226-3396052-84830o/index.html

The average retail price of a 50-kg bag of cement has dropped to Sh670 from the peak of Sh740 in 2008 due to fierce price wars.
Asian manufacturers enjoy lower energy costs and are entitled to State subsidiesresearchers have concluded that Chinese imports COULD??? lead to a de-industrialisation

[RV Pundit]

We can't beat china in this and imposing restriction is just punishing the economy for little gain. China is going to eat some local industries but is mostly eating the share of imports from UK,Japan,India and the likes.

We need to concentrate on what we are good in..for example tourism...China & India is potentially market for MILLIONS of tourist...I think China right now is biggest source of tourist in Europe and the rest of the world...we need to tap into that market....by inviting more chinese investor to open hotels, learning chinese, having tour guide who speak chinese,allow chinese airlines to fly here, allow easy transfer of money btw kenya and china, banks embracing UnionPay, ease visa restriction, serve dogs in special chinese hotels.

If we get 3m chinese coming here annually spending each 1,000USD on average...that will pay for 320B(3Busd) from the imports.

That is the smart way to play this game. Play your comparative advantage. China has no animal parks except in the zoos. China outbound tourist are anything btw 130-200M. We just need to get a slice of that...2% visiting our nation...and we can balance the trade.

But we are all obsessed with being industrial power...unaware that they are even more exciting opportunities...as 1.3B chinese become rich and want to travel the world.

According to Nation, Kenyan imports from China last year estimated at KES. 320 billion against export to China of KES. 5 billion. And it's projected to grow.

www.nation.co.ke/lifestyle/smartcompany/Kenya-full-plate-of-Chinese-imports/1226-3396052-84830o/index.html

The average retail price of a 50-kg bag of cement has dropped to Sh670 from the peak of Sh740 in 2008 due to fierce price wars.
Asian manufacturers enjoy lower energy costs and are entitled to State subsidiesresearchers have concluded that Chinese imports COULD??? lead to a de-industrialisation

[RV Pundit]

Some data on earnings in the formal sector
http://imgur.com/KY1GqoK (2.5M formal jobs)
http://imgur.com/iK6NXcu (about 600,000 ksh per annum earning on average or about 40K per month).

[RV Pundit]

IMF thinks Mobile Money can add 1.5% growth to our economy.
http://www.businessdailyafrica.com/Can-Africa-s-mobile-money-revolution-reduce-poverty-/539552-3397578-hfuhvoz/index.html

[RVtitem]

Can Africa's mobile money revolution reduce poverty? NO!

--

A headline with a question mark at the end means, in the vast majority of cases, that the story is tendentious or over-sold. It is often a scare story, or an attempt to elevate some run-of-the-mill piece of reporting into a national controversy and, preferably, a national panic.
https://en.wikipedia.org/wiki/Betteridge%27s_law_of_headlines

--

IMF thinks Mobile Money can add 1.5% growth to our economy.
http://www.businessdailyafrica.com/Can-Africa-s-mobile-money-revolution-reduce-poverty-/539552-3397578-hfuhvoz/index.html

[bryan275]

Can Africa's mobile money revolution reduce poverty? NO!

--

A headline with a question mark at the end means, in the vast majority of cases, that the story is tendentious or over-sold. It is often a scare story, or an attempt to elevate some run-of-the-mill piece of reporting into a national controversy and, preferably, a national panic.
https://en.wikipedia.org/wiki/Betteridge%27s_law_of_headlines

--

IMF thinks Mobile Money can add 1.5% growth to our economy.
http://www.businessdailyafrica.com/Can-Africa-s-mobile-money-revolution-reduce-poverty-/539552-3397578-hfuhvoz/index.html

You have to actually produce stuff,  alot of stuff in order to do so.   This is why our billionaire "businessmen"  are useless.   They produce nothing,  invent nothing and no value adds.   

[RV Pundit]

You don't make much sense here. M-pesa is enabling people to produce stuff - goods and services  - at the micro-level. The economy is set to grow by. 6-6.5% because people are definitely producing, inventing and adding value. Unless you're focusing on our renting seeking political class.

You have to actually produce stuff,  alot of stuff in order to do so.   This is why our billionaire "businessmen"  are useless.   They produce nothing,  invent nothing and no value adds.   

[MOON Ki]

by inviting more chinese investor to open hotels, learning chinese, having tour guide who speak chinese,allow chinese airlines to fly here, allow easy transfer of money btw kenya and china, banks embracing UnionPay, ease visa restriction, serve dogs in special chinese hotels.

I like that.   Just invite them and do all these things to convince them to come.   Much better than grovelling.

If we get 3m chinese coming here annually spending each 1,000USD on average...that will pay for 320B(3Busd) from the imports.
...

My impression is that Chinese people generally have little interest in visiting Africa and interacting with Africans; and to the extent that  they do, South Africa does OK, because it is seen as a little "advanced", as does Egypt, because it is "not Africa".

KTB tends to have all sorts of marketing in China, including the hosting of "cultural festivals" in some large cities.     How effective are these?   KTB data on Chinese arrivals:

2012:  41,303
2013:  37,062
2014:  33,199
2015:  29,774

Neither the numbers nor the trend suggest  that we will soon have 3m handing over 320B.   

[RV Pundit]

Big difference btw attracting and grovelling. The chinese numbers reflect the general trend the last few year after we lost our tourist to TZ and elsewhere thanks to Alshabab. There is recovery underway this year..and Chinese & Indian figures hopefully will be way up..growing at double digit like it did till 2011. I think 2011 is when we receive the highest number of tourist.

[MOON Ki]

Big difference btw attracting and grovelling. The chinese numbers reflect the general trend the last few year after we lost our tourist to TZ and elsewhere thanks to Alshabab. There is recovery underway this year..and Chinese & Indian figures hopefully will be way up..growing at double digit like it did till 2011. I think 2011 is when we receive the highest number of tourist.

I'm happy to see that you now appreciate that: "grovelling" was a word that you came up with; the rest of us had in mind the government working hard to attract certain types of manufacturers.    Own goal.

[RV Pundit]

We cannot attract manufacturers when many are closing shops. What is there to attract them? We can attract investors to tourism sector because it already working and just need retooling, refining, tweaking, fine-tunning and expanding it; The same way we can easily attract FDI to real estate, retail, and such industries that are already up there.. Kenya and Britain crying to chinese manufacturers to go there..is desperate grovelling. Won't work. Can't work.

We can attract chinese investor to build hotels; we cannot attract them to build factories. Our "factory" fundamentals are screwed..power at  best 14 cent usd per KWH(for large commercial) and labour at 120USD per month...totally impossible when our competitors are offering 3 cent per KWH and 20usd per month salary! We have proven 1M inbound tourist every year...a billion dollar industry...that is going to attract FDI..with or without gov input.

Plain simple if someone has some economics 101 knowledge.

I'm happy to see that you now appreciate that: "grovelling" was a word that you came up with; the rest of us had in mind the government working hard to attract certain types of manufacturers.    Own goal.

[MOON Ki]

We can attract chinese investor to build hotels; we cannot attract them to build factories. Our "factory" fundamentals are screwed..power at  best 14 cent usd per KWH(for large commercial) and labour at 120USD per month...totally impossible when our competitors are offering 3 cent per KWH and 20usd per month salary!

I believe it has already been pointed out to you that we don't have to compete with Ethiopia on the same things.

Plain simple if someone has some economics 101 knowledge.

 

[RV Pundit]

Not only Ethiopia but many other low cost manufacturing destination. I don't see it happening. Our economy is free for all. They should have come already -- but nobody is opening factories - they are opening hotels and stuff that make economic sense.

I believe it has already been pointed out to you that we don't have to compete with Ethiopia on the same things.

[MOON Ki]

Our "factory" fundamentals are screwed..power at  best 14 cent usd per KWH(for large commercial) and labour at 120USD per month...totally impossible when our competitors are offering 3 cent per KWH and 20usd per month salary!

There seems to be a lot of whining and wailing and gnashing of teeth about such things and how they supposedly affect manufacturing in Kenya, but, again, this is yet another area where grovelling working to attract outsiders can work. As an example, here is what is happening in Vietnam:

http://renewables.seenews.com/news/solarpark-korea-eyes-300-mw-solar-project-in-vietnam-report-497642

http://renewables.seenews.com/news/koreas-hanwha-plans-up-to-200-mw-of-pv-in-vietnam-502669

Canadian company CMX Renewable Energy is reportedly planning to construct a 150MW solar photovoltaic (PV) power plant worth $150m.
...

http://www.power-technology.com/news/newscmx-renewable-plans-to-build-150mw-solar-pv-plant-in-vietnam-4881942

That's around $1 billion and a whole bunch of MWs from just those 3 companies.

Quite apart from those companies whose main business is energy, others like Intel, having already been convinced to set up shop, are working on their own electricity supplies:

Intel Products Vietnam on April 23rd unveiled and put into use the biggest solar power system in Vietnam after nearly five months of construction. The system is made of 1,092 solar panels with 21 electric converters.
 
The system will produce about 321,000 kWh of electricity (replacing nearly 30% of the total power Intel Vietnam factory consumes) and reduce up to 221,300 kg of CO2 emission per year.

http://www.cel-consulting.com/en/category/market-news/Biggest-Solar-Power-System-In-Vietnam-Unveiled

[MOON Ki]

Not only Ethiopia but many other low cost manufacturing destination.

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

[RVtitem]

Kenya needs trade protectionist system (sad we signed EPA), investment in energy, key collective infrastructure. The capitalism rat race should also be toned down a bit. No factories will come up when everyone, including "industrialists" are busy flooding market with foreign-ware.

Somalis have perfected the trade and it is said that they evade taxes. If importers are evading taxes, then it is even more difficult situation for producers.

[RV Pundit]

Bangladesh and SriLanka for example.

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

[RVtitem]

http://standardmedia.co.ke/mobile/article/2000219184/what-is-standing-in-the-way-of-africa-s-industrialisation