Kenya’s economic development has gathered momentum with the execution of the ‘Big Four Agenda’. The country has transformed its infrastructure, which includes completion of the standard gauge railway (SGR), construction of rural roads and modernisation of the ports and the northern corridor, opening it up to the region.

The counties have already embraced the Big Four, with the recent 2019 Devolution Conference focusing on contribution to acceleration of the pace of its realisation.

PRODUCTIVITY

The Big Four guarantees Kenya a healthy, food-secure, well-housed and, therefore, working nation with improved value addition and manufacturing aimed at enhancing exports to spur foreign exchange harvesting.

Countries that have transformed their economies could differ in all other aspects but agree on the need to progress by the citizens becoming deliberate active participants in national development.

The Big Four seeks to transform manufacturing to 15 per cent share of the gross domestic product (GDP). The achievement of this enormous target will require increased output from Sh650 billion to Sh2.2 billion by 2022. This will be supported by improvement of the healthcare systems with universal coverage, development of affordable housing and ensuring agricultural productivity is enhanced to guarantee all Kenyans the required basic needs for sustainable living.

Such a nation will enhance its brand, become more visible and attract investments owing to higher quality of life and purchasing power — a prerequisite for the manufacturing target.

Realisation of the Big Four economic blue print will require a change of our economic structure to focus on outward orientation, adopting the devolved system redistribution model and a shift in the implementation strategy.

FOREX HARVESTING

The Integrated National Exports Development and Promotion Strategy (INEDPS) seeks to enhance coordination of productive sectors in driving exports to increase forex harvesting. It envisages that exports should grow at 25 per cent per annum.

Kenya’s forex growth is less than five per cent, but capital flight, viewed from its Sh1.1 trillion trade deficits, at a double digit, indicates productive capacity below full potential. That undermines the workings of our market economy; the low share of foreign debt to national wealth, at 58 per cent, can pose a challenge on its repayment.

All partners will, therefore, be required to own the blue print and use its resources to sensitise Kenyans to enhance their participation towards its achievement. This, while the country works to fight the risks, for instance by curbing corruption and illicit trade.

Kenya ought to emulate countries such as Malaysia, Japan and South Korea, which have created systems to ensure local production of high quality exportable products and ensured a robust global presence to net as much forex as possible through exports and foreign investments. They have set up trade support institutions with a local and global presence that act as their ‘invisible hand’ to inject forex to their economies.

Despite their different economic set-ups, these countries have emerged as world leaders after the Second World War. Due to heavy global presence, in part, Japan’s debt-to-GDP ratio is almost 200 per cent. With huge forex inflows, such an otherwise high debt level is easy to deal. Besides, it is a leading bilateral donor.

INCREASE SALES

With the realisation that Kenya ought to increase exports, it became the first African economy to sign and ratify the African Continental Free Trade Area (ACFTA), which presents an opportunity of 17 per cent of world market that will greatly spur transformation of the manufacturing sector.

Further, the African Growth and Opportunity Act (Agoa) Kenya Strategy, which seeks to grow exports to the United States by 10 per cent to take advantage of the 6,000-plus exportable product lines, will bring in more forex, duty-free, before 2025, especially now with the direct flights to the US.

There is an urgent need to strengthen Kenya Airways and give the national carrier an opportunity to be more efficient and help in forex harvesting, which is low. Our biggest opportunity lies in increasing the uptake of our infrastructure and logistics resources to increase sales.

Through the INEDPS, public sector organisations at the national and county levels have been given an opportunity to participate in enhancing forex harvesting. The private sector also should take advantage of these initiatives.

The Big Four, now with the ‘handshake’ flavour, should accelerate economic growth and development. The ‘handshake’ presents a better future for all Kenyans; let us seize the moment.’

Source: Daily Nation

Disclaimer: The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of TradeMark Africa.