16 January 2018

Kenya Should Strive to Unlock Its Huge Potential in Trading Sector

With Kenya's improved transport system and largely unexplored potential in agriculture, local and regional trade has unlimited potential to blossom.

Agriculture contributes 26 per cent of the gross domestic product (GDP) and another 27 per cent indirectly through linkages with sectors such as manufacturing, transportation, tourism and education, as well as over half of export earnings.

Consequently, there is a need to establish a trading system to ensure these commodities reach the market in sufficient quantities and at competitive prices.

REVENUES

Trade is an important component in economic growth and countries are struggling to enter into each other's markets to maximise on their revenues.

Trade is the third plank of Vision 2030's economic pillar -- building 'tier 1' markets, creation of producer business groups and establishment of a wholesale hub.

As the government renews its commitment to industrialisation through manufacturing, trade will take an increasingly crucial role. County governments, too, must create a conducive environment for trade to thrive within and outside their regions.

In central Kenya, eight governors in the larger Mt Kenya region late last year pledged to revive the Nairobi-Nanyuki railway to facilitate trade.

The project is expected to cost an estimated Sh25 billion.

Besides creating market linkages for goods produced in the five member counties, the railway will also connect with Nakuru and Isiolo counties and the Upper Eastern region, up to Ethiopia. The potential of this market is massive.

As with the moribund rail line in central Kenya, the collapse of railway services in Kipkelion town years ago has had a huge impact on Kericho County. It adversely affected production and trade in milk, grain and coffee, then major employers.

TRADE

Uasin Gishu County is building a Sh6 billion Southern Bypass from Eldoret to Nairobi through the Eldoret International Airport. It will open the North Rift region for more business and decongest Eldoret town.

These are a few initiatives expected to spur intra-county, inter-county and regional trade.

The increased urgency to get things back on track seems to have come from the realisation that we need to take advantage of the continuously improving infrastructure, which includes expansion of airports and upgrade of airstrips.

To avoid duplication or wastage, we need to map out the strength of every county in terms of its main produce, linking the production areas with potential markets. This will create economies of scale, and make goods competitive.

LIVESTOCK

Kitui County can focus on the growing of green grams, which it can trade with other commodities produced cheaply elsewhere. The cereal is in high demand countrywide and efficient connectivity by road and rail would give Kitui a countrywide market for it.

The same case applies to Kinangop, in Nakuru, which suffers massive losses every year as up to half of its cabbages and potatoes do not reach all markets due to infrastructural hindrances. Tana River County suffers the same fate during the mango glut.

The price of meat rises in urban areas as cattle and goats die in their thousands in pastoralist areas due to transportation challenges.

Revival of the Kenya Meat Commission (KMC) has never taken off despite plenty of livestock in the north. A railway line to the northern tip would help to mop up livestock for its abattoirs to operate at capacity.

Digital technology, particularly mobile telephony and data, can also greatly enhance trade, linking producers with markets.

Successful trading in today's world demands a mixture of innovation and aggression in marketing.

Kenyans have all it takes; all that is needed is the political goodwill, hard work and commitment.

Mr Kibiru, the senator of Kirinyaga, is chairman of Senate Standing Committee on Tourism, Trade and Industrialisation and member, Sessional Committee on County Public Accounts and Investments.

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