Zitto na Demokrasia

Zitto na Demokrasia

Watch out Kenya,Tanzania is catching up

with 3 comments

By Linus Gitahi

Posted Wednesday, May 26 2010

As Kenya dithers on which way to go on governance with the constitution, how to implement Vision 2030 and how the various pillars of development can be kick started, its neighbour to the south is making steady progress.

As the chart below shows, Tanzania is exporting to Kenya almost as much as it is importing. For a long time the gap was so huge that many Kenyans wondered whether anything good can ever come from down south.

The sad thing, most of it is food related exports to Kenya! This is set to get worse with the possible export of natural gas from Tanzania to Kenya.

Statistics on GDP growth show that if Tanzania maintains its growth at 6% and Kenya continues to average 4%. This trend sees Tanzania becoming the biggest economy in East Africa in two years. Awesome!

(With Uganda’s recent oil discovery and possible exports to Kenya, it’s only a matter of time before that economy too overtakes Kenya, but let’s keep that for another day).

What should Kenya be doing?

First is to examine its traditional source of competitive advantage. I am persuaded that it was based on Nairobi and Kenya in general being made the manufacturing hub for the region since independence. Almost all key British and American multinationals set up here for serving the east African market. These include Cadbury’s, Nestle, Reckitts, Unilever, Wrigleys, Johnson Wax, GSK, and many more.

However, with the opening up of alternative markets, all these companies have relocated all or most of their manufacturing elsewhere, particularly Egypt and South Africa, and in a few cases India. They export their products directly to Tanzania and Uganda from those factories.

This therefore calls on Kenya to re-evaluate its source of competitive advantage viz a viz its neighbours. Let me suggest a few:

  1. Stop importing food. Instead, invest enough in terms of irrigation and encouraging farming in the semi arid areas by diverting waters (which at the moment is freely flowing into the Indian Ocean). This should be stuff for the current budget and not some future time “when funds become available”.
  2. Support homegrown SMEs in a real and practical way. Explore differentiated tax regimes driven by a transparent criteria, particularly the export orientated ones, to fill the void that is being rapidly created by exiting multinationals.
  3. Energy and infrastructure… These two components, besides the raw materials, have the greatest impact on a company’s cost of goods in Kenya. The cost of energy per unit is about US13 cents in Kenya compared to say US3 cents in Egypt. Truth be said, Kenya is investing greatly on infrastructure but we have a long way to go to reducing the cost of energy in a sustainable way.
  4. Creating Political/economic certainty. The uncertainty about the constitution will set Kenya back if not resolved soon. Kenya must not come out as a nation that is not sure, that is not certain about what ought to be. It’s important that this issue is settled once and for all.
  5. Finally, Kenyans must generally start driving things Kenyan. From genuine attractions for tourists that are Kenyan to selling mukimo and ugali at the Hilton to promoting Kiswahili as a language, Basically, promoting national psyche and pride. This will, among other things in the fullness of time, significantly improve the remittances from the Diaspora. No country ever developed by turning the other cheek or basically imitating others on core culture issues such as food, clothing, language etc. At a minimum, Kenya needs to excel in one to drive its image and distinction as a nation.

Written by zittokabwe

May 26, 2010 at 4:40 PM

Posted in EAC, Kenya, Tanzania

3 Responses

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  1. I remember to have made this point in Parliament in 2006, that we have enhance our efforts to grow faster and it is possible to catch up Kenyans. MPs frowned! Kenyans are seeing it themselves. I can assure you that we will not catch them up, they have seen. Tanzanians have to redirect their efforts into expanding the economy and occupy our rightful place in the Regional Economy

    zittokabwe

    May 26, 2010 at 4:51 PM

  2. While encouraging, I still would like to see the exactl figures the author is comparing from. Per World Bank statistics I could find, Kenya’s GDP was at $30.4B in 2008 while Tanzania’s was 20.5B in the same year. Can this gap really be closed within the 4 years (2008-2012)? And why this tremendous growth is not yet adequately being translated into the promised “Maisha bora kwa kila Mtanzania” is another question all together. I also wonder whether the EAC tariff break that Kenya provides has something to do with this trend.

    Nathan Chiume

    May 27, 2010 at 6:03 AM

  3. I am one of those few TANZANIANS who strongly believe in Regional/Continental integration. Kwa sababu I believe, in this era of google and twitter..as a country you cant go it alone! You will be the big loser! Tanzanians tunakuwa waoga tuu for no good reasons at all. We have all that we need to be competitive in EAC. And as a matter of fact, integration is something simply like Globalization. We can do nothing to stop it. Whether we like it or not-its here to stay!. What can we do? The answer is, while we cant stop globalization or EAC Community, we can SHAPE it the way we want it to be.

    Tanzanians, we should wake up and get serious with our political and economic future. We should stop this nonsense of complaining about wa-Kenya nk. We should work hard, invest in education, invest in health services and ensure that we loot out corruption. Compared to other countries, Tanzania we stand in a VERY good position to benefit from EAC Community. We have political stability (atleast), we have a nation and not a country. A person from Kasulu can still relate to another from Mtwara as brothers.

    I honestly believe that, Tanzanians we are loosing out in EAC because of being timid-fearing the unknown! Its now the appropriate time to shape and write the rules of the game! HOW WE WANT THIS EAC TO WORK FOR US! Mfano, ukienda Europe au US hata kwenye vyuo vikubwa vikubwa (super elite universities) wakenya wako wengi tuu. Contrast na watanzania ni wachache mno! Kikubwa ni kwamba tujiamini! Tuache huu woga woga…

    Kenya can be our neghbour and personally I believe we have a lot to learn from them and they also have alot to learn from us. Mfano ukienda sasa hivi Southern Sudan, Kenyans wameshika kila kitu kuanzia banking sector, na biashara nyinginezo..reality is: we should really wake up to the reality kwamba kipindi cha kulalamika na kutegemea serikali itafanya hiki, au itafanya kile..its over! Lets invest in education, lets invest in our children, lets invest in ourselves, lets invest in infrastructure. Kwa mwendo huu..hata kesho hiyo EAC itakuwa imejaa hao hao wakenya..na watu mtakuwa mnalalamika tuu..yet…we spend so much time…complaining aginst the government..eti isituingize EAC,,,kuliko mda tunaoutumia kuhakikisha hiyo EAC ina-serve interests zetu.

    So, Mheshimiwa Zitto, you are not a lone voice in your support for this EAC thing. Mimi naamini hii kitu sasa hivi inabidi tuwe makini kusudi tushape policies na namna tunavyoweza faidika. Kuendelea kulalamika wakati hatuweki juhudi za kutatua matatizo yetu. Haitusaidii.

    Charles

    Masanja

    May 27, 2010 at 1:26 PM


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