Ethiopia industrialization

[MOON Ki]

Suppose we can't go the China way.  What is Kenya going to make and that the rest of the world just can't resist sourcing from there?

Or from any of the countries that are taking up from where China is going other ways ... Indonesia, Thailand, Vietnam, etc.   "Higher productivity and efficiency" are all very well, but in what and how?  What is the starting point?

The case of Mondelez (swallower of Cardbury) says quite a few things about the situation in Kenya, as does that of Eveready which also moved its manufacturing to Egypt.***    Mondelez says that Nairobi will remain as its regional hub, that Kenya in particular is a growing market for their products and they expect sales to increase,  but that it is, overall,  cheaper to make chocolates and whatever in Egypt and import them.  (Did they consider improving productivity and efficiency instead?) And the land where the former plant were in Kenya?   Eveready has already made a decision: they will make money from it the Kenyan way of today---real estate.     

**According to the World Bank, these are just the latest of manufacturers leaving Kenya.   The local industry too has noted that:

Manufacturing nightmare that is turning Kenya into graveyard for companies, March 2016.

Read more at: http://www.standardmedia.co.ke/business/article/2000193411/manufacturing-nightmare-that-is-turning-kenya-into-graveyard-for-companies

[MOON Ki]

RV Pundit wrote:

I meant the USA of 1900 had nearly the same conditions that we have here and that exist in India for example.

India too is very different, right now, from Kenya, which explains why India-Kenya trade is tilted in India's favour.    What does India produce and export to the rest of the world?    And Kenya?  This should give you an idea of the differences:

* Kenya imports a lot of pharmaceuticals, machinery, steel products, power transmission equipment, yarn, and automobiles from India.

* The latter imports tea, vegetables, leather, soda ash and scrap metal from Kenya.

https://www.standardmedia.co.ke/mobile/article/2000208198/kenya-to-push-for-deals-to-address-trade-imbalance-with-india

[Kim Jong-Un's Pajama Pants]

MOON Ki,

The way I see it.  Kenya, Uganda and Tz should have long ago by now made an economic union.  Then as one entity, they would do the right things(which are many) while marketing the region for investors to bring their factories in(Kenya, Uganda, Tz, whichever suits them).  They don't seem any closer to that than 20 years ago.  In fact the vibe seems to be negative on that front. 

That too is how many people and organizations whose job is exactly to "see" in such matters also see it.    For their part, the leaders of the three countries talk endlessly about "regional integration", with regular "summits" and many trees felled in producing the paperwork.     The reality, however, does not seem to match.    I'm not sure why that is so, but I get a sense of the same sort of Kenya "arrogance" that many years ago led to the demise of the embryonic union.   

When I see comparisons made between Kenya, Tz or Ug to show who is doing better it's a bit of a head scratcher.  These were colonial entities built for exploitation by mzungu who left 50 years ago.

[MOON Ki]

Kenya's private sector is huge. It employs 3 times the public/gov sector in formal jobs. This is not true in every country. Informal sector is even bigger. The trick is to get the informal sector into formal sector.

Pundit,
FYI. The private sector controls very little.

Size or numbers alone do not necessarily equate to power.    Also, the "private sector" is, by far, the major employer in just about every country in the world, including China and Ethiopia.   So yours is not a convincing response to a claim that Kenya's private sector controls little. 

And when it comes to actually controlling anything, the informal+jua-kali sector, which is a part of the private sector, should not even get a mention.  Obviously.  Yet it is the largest employment sector in Kenya. 

Moving on past that:    

I was curious about how big this informal sector is in Kenya.    I looked at numerous data sources, among those I found informative  is the 2015 report from the UN Economic Commission for Africa.    The figures are around  75% among men and 80% among women (% of total employment).   A UNECA report of the same year indicates that---because of a lack of various protections, opportunities to upgrade skills, the lack of productive income---this lot is largely trapped in poverty.  Interestingly, 30 years ago, the figures were almost "reversed". This summary and the corresponding full report, from the Brookings Institution, are interesting:

http://www.brookings.edu/blogs/africa-in-focus/posts/2016/05/16-tapping-kenya-economic-growth-golubski

The other thing I was curious about is the contribution of this sector to GDP.   Hard figures are hard to come by, for the obvious reason: the folks in the sector are not much into the business of reporting statistics. The figures I have seen appear to have been arrived at by looking at the formal sector and its contribution and then subtracting that from the total.    Those figures lead to the inevitable conclusion expressed in numerous reports---that the sector is one of low productivity and relatively low contribution to GDP.   (In Kenya, as in most of Africa, the high-productivity sectors are not creating many jobs.) 

Prospects for the future:

Over the last year or so, the World Bank has produced a few reports that are of significance to Kenya and the rest of Africa.  (Off the top of my head, a good one to read would be "Africa's Demographic Transition: Dividend or Disaster?" See Google)

- One of those was somewhat "negative"---that around 1950 (or so) most of the world's poor were in Asia, but Africa has increasingly taken over that "market" and, on the present path, will have cornered it completely in a a couple of decades or so.  Even with "Africa Rising".   (It appears that the male member is rising more than the economy is ... )

- The one I mention above states that merely not reproducing like rabbits will not be enough to make a significant change.    The reports recommends the "East Asian" way at such a phase.   A part of that is developing a serious export-driven economy---not of scrap metal and vegetables.   
   
- The World Bank's most detailed report on Kenya this year recommends that Kenya focus on improving commercial agriculture, which is still the mainstay of Kenya's economy, as a major path to poverty reduction.   (There are good reasons for that, whether one chooses to look at 19th-Century USA or 20th-Century East Asia.)  What is Kenya doing in that regard?   I'm not sure.   But I hear a lot of noise to the effect that those at the bottom will soon be able to lift themselves up by producing "apps" (Konza City, Silicon Savannah, etc.) or using MPESA to join the financial industry.  The sexy stuff.

- One recent report I read from the African Development Bank is to-the-point on exports: Kenya will not get far  as long as its main exports are what the report calls "low processed agriculture" (specifically tea and cut flowers).  This,of course,  is the story of Africa---from Ghana and Ivory Cost, producing most of the world's cocoa and then importing chocolates etc., to Nigeria, exporting crude oil like nobody's business and then spending billions on importing the products of refining.   (By way of contrast, take a look at what Singapore makes out of oil.)

I like the optimism expressed in the Brookings Institution report: the "African Lions"!  Goes well with "Africa Rising!".   And of Kenya, RV Pundit writes of "by far the most modern country in East Africa...with economy bigger and more sophisticated than many in Africa".   Certainly true enough.  But at the core of that is no more than an observation that even among the down-and-out there will be some at or near the top.  C- students in the sub-class of D students.    One needs to look at the rest of the class.   

As I see it, Africa's prospects are not especially bright on the present path.    Whether  there is the will or motivation to change that is far from clear.    I  think the stated end-goal requires more  than endlessly stating goals and visions and whatever.

[Empedocles]

When I see comparisons made between Kenya, Tz or Ug to show who is doing better it's a bit of a head scratcher.  These were colonial entities built for exploitation by mzungu who left 50 years ago.

This is exactly what the problem with Kenya is.

After the British handed power to Jomo, he continued the same process of exploiting the country and "natives". This explains, among others, why Jomo and his mates went on a massive land grabbing spree.

Over 50 years down the line, the same practice continues, with our major exports being, as Moonki mentioned, raw materials feeding overseas industries. Basically, all of our institutions are primarily engaged in keeping the status quo with no interest in industrializing Kenya. Our elites became colonists.

[RV Pundit]

This is what happens when you're trying to google things up and try to understand them.US industralization model (2nd -around 1890 to 1920s-) was unlike Britain or China or Russia or Asian tigers. The China model is to deploy huge cheap and almost slavish labour amongst other common conditions (free land, import restriction, huge public investment in infrastructure). The US was bit different coz it industralize while wages were comparatively higher; they didn't deploy million of cheap american slavish labour; yet the were able to industralize. There are many ways of skinning the cat. Kenya doesn't have the crazy cheap labour that exist in Ethiopia. But we have better skilled labour thanks to competitive education we got here.

In summary for kenya-we have to follow the US model--and first  get to where India is-- before we get finally get to US. India manufacture high skilled stuff - pharma,biotech,softwares,etc -yet it still not industralized  -coz they have globally competitive education that is  English based just like Kenya. Those jobs are few but highly paying.

Ethiopia will first get to Indonesia then finally China. Low cost slavish labour in unprecedented scale. Slowly move the food chain of manufacturing from mudane to high tech stuff. Kenya can easily leapfrog the mundane stuff if it continues investing heavily in Education like it been doing.

Different ways of skinning the cat.

I think you're shooting from the hip. I meant the USA of 1900 had nearly the same conditions that we have here and that  haexist in India for example. I don't know if you're complaining about the constraints that we have or expressing your frustration.

No need to inject emotions into this.    I have pointed out a couple aspects of the USA at the time of its industrialization.   And there are many more.   If you wish to argue about "nearly the same conditions", then what you should do is explicitly state them so that we can discuss them.   We can then get to questions such as these, with you supplying the details of how exactly we are to follow "the USA model":

How many countries since the start of the 20th century have done so?    (I don't know, but perhaps some examples will be given to show why Kenya should succeed.)   Are there any serious proposals elsewhere for Kenya (or any other country intending to industrialize today) to suggest that it might work for Kenya (or any other country intending to industrialize today)?   If none, is. it because people do not know US history?

You have stated that:

The US managed to industralize in early 20th century despite having these kenya kind of "disadvantages".

Actually the USA's industrialization phase largely occurred in the second half of the 19th century, and a great deal had already occurred before that.     

You also state that:

I meant the USA of 1900 had nearly the same conditions that we have here and that exist in India for example.

And what same conditions might those be that we have here and in India?   (I note that  the USA had become the world's largest manufacturer by around 1895, that being a direct result of the applied technological innovation indicated above.)

[RV Pundit]

Sounds like a conspiracy theory. Jomo actually grew the economy at double digit before things went south in late 70s due to the global oil crisis. You cannot wake up and move from raw material to finished goods in few years. That is simplistic thinking. There are a lot of background work that has to be done -some needing lots of years -before you can change the economy of the country.

When I see comparisons made between Kenya, Tz or Ug to show who is doing better it's a bit of a head scratcher.  These were colonial entities built for exploitation by mzungu who left 50 years ago.

This is exactly what the problem with Kenya is.

After the British handed power to Jomo, he continued the same process of exploiting the country and "natives". This explains, among others, why Jomo and his mates went on a massive land grabbing spree.

Over 50 years down the line, the same practice continues, with our major exports being, as Moonki mentioned, raw materials feeding overseas industries. Basically, all of our institutions are primarily engaged in keeping the status quo with no interest in industrializing Kenya. Our elites became colonists.

[hk]

What we need is increase in productivity whether its in agriculture, manufacturing or even service sector. The increased electrification is a step in the right direction as now more mechanisation and automation will occur especially in the Informal sector. The other thing is taxation, corporate tax is 30%, paye starts at 12k and I think after 50k the rate is 30%. This is very punitive. So most SME opts to operate informally instead of paying punitive taxes( wage pressure increases cost of labour ). That's a catch 22 because by being informal it means they're not getting access to good credit to purchase capital goods which would lead to increased productivity.
The companies that has closed like cadbury were losing market share to more nimble local companies namely kenafric industries. The bottomline is how many africans are involved in manufacturing? That is almost the preserve of indians, we've few africans manufacturers I see it all the time when supermarkets invites suppliers. The culture of investing real estate, government tenders  etc has to end we start real investment in serious business producing real stuff or services.  The good thing is in some sectors like light manufacturing local companies are doing great. For example kimberly clark is having a hard time competing with chandaria. We have local pharmaceutical manufacturers being bought by indians firms to expand manufacturing and export to the rest of africa http://www.businessdailyafrica.com/Indian-firm-to-buy-Sh1bn-stake-in-Universal-Corp/-/539552/3076566/-/view/printVersion/-/brl0m9/-/index.html. 

[RV Pundit]

You just like to argue for it's sake. How can a communist/marxist state have private sector? leave alone one large than public sector. Which private sector are you talking about in Ethiopia when Gov doesn't allow any private sector in key sectors of the economy - Finance & Intermediation in kenya is private sector led -and account for 10% of the economy-in Ethiopia - you can by default assume that finance sector is public sector - the same for telcoms (safaricom -a behemoth is private - you can assume Ethiopia one is public/gov). You can go to China and find out how many private sector companies can match state ran parastals in every sector.

Accept facts and move on. Kenya has a huge private sector -not by default- but because it chose the capitalist way -while TZ or Ethiopia or Russia or China - have a huge public sector (some guy had problem with understanding gov capacity -that is clue)- coz gov choose to go that way and nationalize the little private sector they had- all the big companies are gov run - of course most of these countries have been recently opening up sectors for private sectors -so the lines is a little blurred except for some messed countries in Latin America- but it not comparable to say US or Britain or Kenya who chose this path earlier.

As for informal sector and WB advice...I think these are complex and complicated issues...and gov has very little capacity to influence things here ---they just have to continue being the enablers--build infrastructure - roads/rails/power -law & order - and let the informal & private sector compete.

Sorry the era of directing an economy to go this way was last succesfully in soviet union in 60s. The configuration of our economy is largely private sector doing their thing with gov regulating. So instead of complaining about why XYZ has not be done...DO IT.

Size or numbers alone do not necessarily equate to power.    Also, the "private sector" is, by far, the major employer in just about every country in the world, including China and Ethiopia.   So yours is not a convincing response to a claim that Kenya's private sector controls little. 

And when it comes to actually controlling anything, the informal+jua-kali sector, which is a part of the private sector, should not even get a mention.  Obviously.  Yet it is the largest employment sector in Kenya. 

Moving on past that:    

I was curious about how big this informal sector is in Kenya.    I looked at numerous data sources, among those I found informative  is the 2015 report from the UN Economic Commission for Africa.    The figures are around  75% among men and 80% among women (% of total employment).   A UNECA report of the same year indicates that---because of a lack of various protections, opportunities to upgrade skills, the lack of productive income---this lot is largely trapped in poverty.  Interestingly, 30 years ago, the figures were almost "reversed". This summary and the corresponding full report, from the Brookings Institution, are interesting:

http://www.brookings.edu/blogs/africa-in-focus/posts/2016/05/16-tapping-kenya-economic-growth-golubski

The other thing I was curious about is the contribution of this sector to GDP.   Hard figures are hard to come by, for the obvious reason: the folks in the sector are not much into the business of reporting statistics. The figures I have seen appear to have been arrived at by looking at the formal sector and its contribution and then subtracting that from the total.    Those figures lead to the inevitable conclusion expressed in numerous reports---that the sector is one of low productivity and relatively low contribution to GDP.   (In Kenya, as in most of Africa, the high-productivity sectors are not creating many jobs.) 

Prospects for the future:

Over the last year or so, the World Bank has produced a few reports that are of significance to Kenya and the rest of Africa.  (Off the top of my head, a good one to read would be "Africa's Demographic Transition: Dividend or Disaster?" See Google)

- One of those was somewhat "negative"---that around 1950 (or so) most of the world's poor were in Asia, but Africa has increasingly taken over that "market" and, on the present path, will have cornered it completely in a a couple of decades or so.  Even with "Africa Rising".   (It appears that the male member is rising more than the economy is ... )

- The one I mention above states that merely not reproducing like rabbits will not be enough to make a significant change.    The reports recommends the "East Asian" way at such a phase.   A part of that is developing a serious export-driven economy---not of scrap metal and vegetables.   
   
- The World Bank's most detailed report on Kenya this year recommends that Kenya focus on improving commercial agriculture, which is still the mainstay of Kenya's economy, as a major path to poverty reduction.   (There are good reasons for that, whether one chooses to look at 19th-Century USA or 20th-Century East Asia.)  What is Kenya doing in that regard?   I'm not sure.   But I hear a lot of noise to the effect that those at the bottom will soon be able to lift themselves up by producing "apps" (Konza City, Silicon Savannah, etc.) or using MPESA to join the financial industry.  The sexy stuff.

- One recent report I read from the African Development Bank is to-the-point on exports: Kenya will not get far  as long as its main exports are what the report calls "low processed agriculture" (specifically tea and cut flowers).  This,of course,  is the story of Africa---from Ghana and Ivory Cost, producing most of the world's cocoa and then importing chocolates etc., to Nigeria, exporting crude oil like nobody's business and then spending billions on importing the products of refining.   (By way of contrast, take a look at what Singapore makes out of oil.)

I like the optimism expressed in the Brookings Institution report: the "African Lions"!  Goes well with "Africa Rising!".   And of Kenya, RV Pundit writes of "by far the most modern country in East Africa...with economy bigger and more sophisticated than many in Africa".   Certainly true enough.  But at the core of that is no more than an observation that even among the down-and-out there will be some at or near the top.  C- students in the sub-class of D students.    One needs to look at the rest of the class.   

As I see it, Africa's prospects are not especially bright on the present path.    Whether  there is the will or motivation to change that is far from clear.    I  think the stated end-goal requires more  than endlessly stating goals and visions and whatever.

[RV Pundit]

Totally agree -improve productivity & efficiency in the economy.After we nail electrification - we have to look at cost of electricity - same with cost of transport -etc etc. The formalization of retail sector is going to help. The financial revolution going on is one building block laid. Then we really need to build capacity in vocational training. Gov should consider making polythenic and middle college - free. Most of kenyans think education end after form 4 if you don't qualify for university. That has to change. Once this has been done -gov doesn't have to find money - FDI will flow into private sector.

What we need is increase in productivity whether its in agriculture, manufacturing or even service sector. The increased electrification is a step in the right direction as now more mechanisation and automation will occur especially in the Informal sector. The other thing is taxation, corporate tax is 30%, paye starts at 12k and I think after 50k the rate is 30%. This is very punitive. So most SME opts to operate informally instead of paying punitive taxes( wage pressure increases cost of labour ). That's a catch 22 because by being informal it means they're not getting access to good credit to purchase capital goods which would lead to increased productivity.
The companies that has closed like cadbury were losing market share to more nimble local companies namely kenafric industries. The bottomline is how many africans are involved in manufacturing? That is almost the preserve of indians, we've few africans manufacturers I see it all the time when supermarkets invites suppliers. The culture of investing real estate, government tenders  etc has to end we start real investment in serious business producing real stuff or services.  The good thing is in some sectors like light manufacturing local companies are doing great. For example kimberly clark is having a hard time competing with chandaria. We have local pharmaceutical manufacturers being bought by indians firms to expand manufacturing and export to the rest of africa http://www.businessdailyafrica.com/Indian-firm-to-buy-Sh1bn-stake-in-Universal-Corp/-/539552/3076566/-/view/printVersion/-/brl0m9/-/index.html. 

[Empedocles]

Sounds like a conspiracy theory. Jomo actually grew the economy at double digit before things went south in late 70s due to the global oil crisis. You cannot wake up and move from raw material to finished goods in few years. That is simplistic thinking. There are a lot of background work that has to be done -some needing lots of years -before you can change the economy of the country.

You're really serious, aren't you?

After more than half a century (50 years!), Kenya hasn't even started establishing an manufacturing base.

For your information, the growth under Jomo was extensive growth, which is absolutely useless for the development of a country and perfectly explains the mess we're in today.

[RV Pundit]

I am always serious.Kenya inherited a fledging manufacturing from colonial master and has kept it as 10% of the economy - manufacturing has kept pace with rest of the economy - but it could be better. The last serious manufacturing attempt was EPZ. Now we are thinking of Naivasha and Dongo Kundu special economic zones.

My point - don't focus too much on gov - nothing stops you from manufacturing. I am starting to see kenyans doing basic stuff  - packaging water, juices, soaps-even githeri - we need to stop lamenting on gov -and start doing it - Indians in Kenya are doing it.

You're really serious, aren't you?

After more than half a century (50 years!), Kenya hasn't even started establishing an manufacturing base.

For your information, the growth under Jomo was extensive growth, which is absolutely useless for the development of a country and perfectly explains the mess we're in today.

[Empedocles]

I am always serious.Kenya inherited a fledging manufacturing from colonial master and has kept it as 10% of the economy - manufacturing has kept pace with rest of the economy - but it could be better. The last serious manufacturing attempt was EPZ. Now we are thinking of Naivasha and Dongo Kundu special economic zones.

My point - don't focus too much on gov - nothing stops you from manufacturing. I am starting to see kenyans doing basic stuff  - packaging water, juices, soaps-even githeri - we need to stop lamenting on gov -and start doing it - Indians in Kenya are doing it.

Private businesses always need incentives from government to flourish.

If you have a government that is not interested in providing said incentives but is instead more interested in accumulating wealth and protecting the elite from any repercussions, then things fall apart.

EDIT: What is the cost to Kenya's fledgling industrial base caused by both Okemo and Gichuru who have absolutely nothing to worry about? Their systematic looting of KPLC caused our electricity costs (inputs) to be among the highest in Africa, making our manufacturing costs very high.

See Simarova's post: http://www.nipate.org/index.php?topic=3273.0

[RV Pundit]

Okay I give up. I think if our kenyan indians thought that way - we would still be waiting for gov to get it act together - before we ever do anything.

Private businesses always need incentives from government to flourish.

If you have a government that is not interested in providing said incentives but is instead more interested in accumulating wealth and protecting the elite from any repercussions, then things fall apart.

EDIT: What is the cost to Kenya's fledgling industrial base caused by both Okemo and Gichuru who have absolutely nothing to worry about? Their systematic looting of KPLC caused our electricity costs (inputs) to be among the highest in Africa, making our manufacturing costs very high.

See Simarova's post: http://www.nipate.org/index.php?topic=3273.0

[MOON Ki]

You just like to argue for it's sake. How can a communist/marxist state have private sector? leave alone one large than public sector.

I don't know how you understand English, but let me try and make it simple:

(1) the employment sector in any country is divided into two parts: private and public (where the latter also includes "state-owned enterprises).

(2) China, Ethiopia, etc. both have non-government enterprises that employ people; those are in the private sector.

Without getting into details, I encourage you to use Google with "private sector China", "private sector Ethiopia", etc; look at the Chinese government's economic plans to see if they include the private sector; etc.   

Which private sector are you talking about in Ethiopia when Gov doesn't allow any private sector in key sectors of the economy - Finance & Intermediation in kenya is private sector led -and account for 10% of the economy-in Ethiopia - you can by default assume that finance sector is public sector - the same for telcoms (safaricom -a behemoth is private - you can assume Ethiopia one is public/gov).

Here, learn something new today: the private sector, in any country, is not limited to just "key sectors", however one defines those.   See all that Chinese junk around you?    That's produced by the private sector.

You can go to China and find out how many private sector companies can match state ran parastals in every sector.

Nowhere did I suggest otherwise.

Accept facts and move on. Kenya has a huge private sector -not by default- but because it chose the capitalist way -while TZ or Ethiopia or Russia or China - have a huge public sector (some guy had problem with understanding gov capacity -that is clue)-

My comments were on employment figures.   Here are some figures from the ILO on public sector employment around the world: https://en.wikipedia.org/wiki/List_of_countries_by_public_sector

(This is 2016, but we can reasonably that there have not been really huge changes)

- Ethiopia: 20%
- Tanzania: 4%
- Russia: 30%

[RV Pundit]

More semantics just for argument sake. If the proportion of formal employment in private versus public sector is not indicative of the size of either then I don't know what other measure we should be looking into. I see you're now throwing even NGOS as private sector! Heck throw in everyone who doesn't work for gov including the farmers and juakalis working informally -

You're a classic case of someone with just too much time to waste. You don't grasp the simplest of concept but goes to great length to back your ideas with "data" . Private sector is private enterprise that is formal. It doesn't include ngos or informal sector. It simply mean corporation or companies. Grasp that basic concept first.

Once again it self-evident that China or TZ or Ethiopia have way less private sector than US or Kenya or say India. The reason can be found in reading a little history of communism that involve nationalizing private sector and restricting private companies from doing business...but of course over the years these countries realized it was stupid idea...and have been opening up sectors of their economy to private sector...but still they are not "there" yet.

Now start a long  hopeless argument over nothing.

You just like to argue for it's sake. How can a communist/marxist state have private sector? leave alone one large than public sector.

I don't know how you understand English, but let me try and make it simple:

(1) the employment sector in any country is divided into two parts: private and public (where the latter also includes "state-owned enterprises).

(2) China, Ethiopia, etc. both have non-government enterprises that employ people; those are in the private sector.

Without getting into details, I encourage you to use Google with "private sector China", "private sector Ethiopia", etc; look at the Chinese government's economic plans to see if they include the private sector; etc.   

Which private sector are you talking about in Ethiopia when Gov doesn't allow any private sector in key sectors of the economy - Finance & Intermediation in kenya is private sector led -and account for 10% of the economy-in Ethiopia - you can by default assume that finance sector is public sector - the same for telcoms (safaricom -a behemoth is private - you can assume Ethiopia one is public/gov).

Here, learn something new today: the private sector, in any country, is not limited to just "key sectors", however one defines those.   See all that Chinese junk around you?    That's produced by the private sector.

You can go to China and find out how many private sector companies can match state ran parastals in every sector.

Nowhere did I suggest otherwise.

Accept facts and move on. Kenya has a huge private sector -not by default- but because it chose the capitalist way -while TZ or Ethiopia or Russia or China - have a huge public sector (some guy had problem with understanding gov capacity -that is clue)-

My comments were on employment figures.   Here are some figures from the ILO on public sector employment around the world: https://en.wikipedia.org/wiki/List_of_countries_by_public_sector

(This is 2016, but we can reasonably that there have not been really huge changes)

- Ethiopia: 20%
- Tanzania: 4%
- Russia: 30%

[MOON Ki]

More semantics just for argument sake. If the proportion of formal employment in private versus public sector is not indicative of the size of either then I don't know what other measure we should be looking into.

That's one way to look at it.     But I don't quite know how to respond when someone you writes (of Ethiopia):

Already many chinese companies have relocated there...now I think they are about to cornered leather/shoe industry, have cellphone assemblies, car assemblies, name it.

and then asks:

How can a communist/marxist state have private sector?

And then:

Private sector is private enterprise that is formal. It doesn't include ngos or informal sector. It simply mean corporation or companies. Grasp that basic concept first.

That's a Pundit Definition that not everyone seems to know; and that includes people who, one assumes, know about such things.   Let me give you just one example: Take the African Development Bank's most detailed analysis (that I have seen so far) of Kenya's private sector; it is from 2013/2014, but the concept in question has not changed since then.   The report is "The State of Kenya's Private Sector", and you will find it here: http://www.afdb.org/en/documents/document/the-state-of-kenyas-private-sector-34093/

Now, pay attention to the following:

In the "Executive Summary", you will find this:

Structure: The private sector is noticeably split into two parts: a formal, large business sector which is relatively healthy and productive, and a massive, informal small business sector that is poorly understood and supported.

On page 7, you will find this:

The private sector is worryingly dualistic in nature,  comprised of a productive formal sector of big business, underpinned by a massive poorly understood informal sector.   According to KNBS calculations, almost 9 out of 10 working Kenyans are employed in the informal sector.

And these are people who are supposed to know such things!   Shame on them.   They should grasp that basic concept first and then do their analysis and report-writing.

[MOON Ki]

The US was bit different coz it industralize while wages were comparatively higher; they didn't deploy million of cheap american slavish labour; yet the were able to industralize.
...
In summary for kenya-we have to follow the US model--

I have already pointed out three key factors: (1) tremendous applied innovations in technology, (2) massive natural resources put to good use, and (3) keeping high tariffs on imports until its industry was competitive.  Given that, please explain how Kenya will follow the USA model.

US industralization model (2nd -around 1890 to 1920s-)

Even those dates don't help your your case.    At around 1860, Britain was the world's leading manufacturer, but the USA was already second.   If Kenya is going to follow the "US model" of that period, a first question is this: what is the current status of Kenya's manufacturing?     And the growth in manufacturing was very rapid in the USA period before 1890, so a secondary question is this: how has manufacturing been growing in Kenya.

[RV Pundit]

You don't need ADB for commonsense definition.1) Public sector -gov controlled 2) Private sector -formal tax paying and regulated 3) Informal sector  -informal; these are commonly accepted definitions when talking about the economy. Ethiopia has very small private sector -they are starting from near zero attracting chinese companies -otherwise it doubtful you'll find homegrown private corporation in Ethiopia -that doesn't mean there are no dukawallas. Kenya has a big private sector that is responsible for most of FDIs in the region. Those are facts.

More semantics just for argument sake. If the proportion of formal employment in private versus public sector is not indicative of the size of either then I don't know what other measure we should be looking into.

That's one way to look at it.     But I don't quite know how to respond when someone you writes (of Ethiopia):

Already many chinese companies have relocated there...now I think they are about to cornered leather/shoe industry, have cellphone assemblies, car assemblies, name it.

and then asks:

How can a communist/marxist state have private sector?

And then:

Private sector is private enterprise that is formal. It doesn't include ngos or informal sector. It simply mean corporation or companies. Grasp that basic concept first.

That's a Pundit Definition that not everyone seems to know; and that includes people who, one assumes, know about such things.   Let me give you just one example: Take the African Development Bank's most detailed analysis (that I have seen so far) of Kenya's private sector; it is from 2013/2014, but the concept in question has not changed since then.   The report is "The State of Kenya's Private Sector", and you will find it here: http://www.afdb.org/en/documents/document/the-state-of-kenyas-private-sector-34093/

Now, pay attention to the following:

In the "Executive Summary", you will find this:

Structure: The private sector is noticeably split into two parts: a formal, large business sector which is relatively healthy and productive, and a massive, informal small business sector that is poorly understood and supported.

On page 7, you will find this:

The private sector is worryingly dualistic in nature,  comprised of a productive formal sector of big business, underpinned by a massive poorly understood informal sector.   According to KNBS calculations, almost 9 out of 10 working Kenyans are employed in the informal sector.

And these are people who are supposed to know such things!   Shame on them.   They should grasp that basic concept first and then do their analysis and report-writing.

[RV Pundit]

Now you're deliberately mixing stuff. Kenya can never be US or China with its 45M people. So let not debate about being no 1 or 2 or 3 in the world. We are talking about becoming INDUSTRALIZED. That is achieved I think when industry (manufacturing) account for 30-50% of GDP. Swiszterland is industrialized but isn't anywhere near no 10 or 20.

You have also deliberately ignored my India analogy - which is more advanced kenya - whose economy mirrors kenya - ignoring the scale!  The same way Ethiopia economy seem like copy-paste of China 50 yrs ago.

I don't know how I can simplify this but Kenya -India - US and Ethiopia - Indonesia - China is the best I can do for now. The structure of the economy and it's future prospect mirrors those "models".

The US was bit different coz it industralize while wages were comparatively higher; they didn't deploy million of cheap american slavish labour; yet the were able to industralize.
...
In summary for kenya-we have to follow the US model--

I have already pointed out three key factors: (1) tremendous applied innovations in technology, (2) massive natural resources put to good use, and (3) keeping high tariffs on imports until its industry was competitive.  Given that, please explain how Kenya will follow the USA model.

US industralization model (2nd -around 1890 to 1920s-)

Even those dates don't help your your case.    At around 1860, Britain was the world's leading manufacturer, but the USA was already second.   If Kenya is going to follow the "US model" of that period, a first question is this: what is the current status of Kenya's manufacturing?     And the growth in manufacturing was very rapid in the USA period before 1890, so a secondary question is this: how has manufacturing been growing in Kenya.