Kenya needs to revive lost spirit of agricultural co-operatives, new manufacturing chief says

By David Whitehouse
Posted on Thursday, 29 September 2022 06:00

David Kayi installs an application on a John Deere 5503 tractor, using the Hello Tractor technology that connects farmers with vehicles' owners, at a hay farm in Umande village in Nanyuki, Kenya. REUTERS/Njeri Mwangi

Kenya needs to rediscover forgotten agricultural skills to lift productivity if it is to climb the export value chain, Anthony Mwangi, the new CEO of Kenya Association of Manufacturers (KAM), tells The Africa Report.

Mwangi, who took over as KAM CEO on 15 September, comes from a rural Kenyan village. In the 1970s, 1980s, and 1990s, he says, agricultural co-operatives were the “mainstay of the economy,” with enough resources to be able to buy tractors and trucks to deliver products such as wool and milk.

The skills that were learned in them, he says, have been forgotten and risk being lost. “We have to get back to basics.”

Between independence in 1963 and 1982, the number of registered Kenyan agricultural co-operatives climbed from 655 to 2,652. The co-ops were involved in the production, processing and marketing of most of the country’s farm products, as well as housing development, savings and credit. Their economic role diminished as economic liberalisation was pursued in the 1980s. According to Kenya’s ministry of industrialisation website, legislation in 1997 which completely removed the government role in co-operatives led to the “near collapse of the entire co-operative movement in the country.”

Today, the country’s industrial growth depends on a stronger agricultural base, Mwangi says. Many exports are in the form of raw materials, with only about 3% of the country’s tea production domestically processed. Some of the country’s tea sellers find the status quo profitable and constitute “roadblocks” to progress, he says. Kenya has “not been very creative or deliberative as a country on how to take this forward.”

Kenya, Mwangi points out, has much easier access to leather than Italy, and 30 years ago the country’s leather exports were a substantial export revenue earner. Today, he says, Kenyan leather is not even competitive at home. Prevention of the tick bites which can spoil leather used to be much better, but animal husbandry skills have been forgotten, he argues. “If you don’t get the product right at that level, there’s not much more you can do.”

  • Research has estimated that 60% of the damage to Kenyan leather occurs during the slaughtering process, while 40% of skins damaged by tick bites would be recoverable with proper parasite control.
  • The leather industry employs about 14,000 people, but has the potential to increase that to 100,000, Mwangi says.

Education priorities

Education is part of the problem, Mwangi says. There needs to be more “training in doing, rather than passing exams.” The system, he argues, has concentrated on educating the most academically able while neglecting the rest. The system “doesn’t take care of those who are not fast learners. It has been a wasteful system.”

“People don’t learn at the same speed,” Mwangi says. “It doesn’t mean they are not good enough.” Local training groups for farmers wouldn’t cost much and could help them “bridge the information asymmetry” by providing basic information such as where to take products to be sold, Mwangi says. “We have to get back to doing what we know.”

The ease and costs of doing businesses are major national priorities, and Kenya will not be able to compete in export markets if it is outcompeted at home, Mwangi says. There are still about 20 different bureaucratic processes needed to start a business, followed by multiple layers of compliance. That’s a heavy burden, especially for potential small businesses which may be far from Nairobi, he says.

  • Some progress has been made as most government services are now online, but more needs to be done, he argues.
  • Previous governments have been able to produce “beautiful policy documents,” he says, but “implementation remains a challenge.”
  • Mwangi says that he is “very optimistic” that the new government of  President William Ruto understands the problems. The government has “articulated these issues well”, he says. “It can be done. This is not rocket science.”

Bottom line

Mwangi sees an agricultural skills reset as a necessary condition  to make Kenya competitive.

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