Why ‘Buy Kenya, Build Kenya’ plan is failing

Former ICT Permanent Secretary Dr Bitange Ndemo Vision 2030 Director-Economic Pillar Omar Mohamed (c) and Kamau Gachigi (l) Executive Director Gea

NAIROBI: Gag Technology Company in Kiambu County is one of the many uncelebrated success stories in Kenya’s small-scale manufacturing industry.

The company is made up of five young men and women who design and build car tracking and home automation systems from scratch. “All the components are designed and hand-crafted here in the country,” said Simon Kimani, a director at Gag.

“Even the underlying circuit boards are made from copper raw materials that are bought in Kenya. We then design and embed the circuitry using special printers, paper and ink.”

For every shilling spent on developing their systems, Gag Technology gets a return of between Sh1 and Sh1.50.

MONETISING SOLUTIONS

The company also organises training and apprenticeships for high school leavers who are interested in pursuing a career in engineering.

This is despite the fact that more than half the company’s founding staff have no formal engineering training.

“Most of what we know we have learnt from Google, and we keep looking out for new technologies and solutions we can monetise with the resources available in the country,” said Mr Kimani.

However, he noted that the company could make even cheaper solutions and employ more engineers if the Government made good on its oft-repeated promise to support locally produced goods.

“A standard IC [integrated circuit], for example, can go for between Sh3 and Sh5 if you buy it in China, but by the time it gets to a shop in Kenya, it costs between Sh25 and Sh30 because of the taxes that have been levied on it along the chain,” Kimani explained.

Last year, Kenyan technology company BRCK unveiled a connectivity device also known as BRCK, which is specially designed to work in environments where electricity supply and broadband are patchy.

The unit can support up to 40 devices, has an 8-hour battery life and can seamlessly shift from Ethernet to wi-fi, 3G and 4G.

The company has since sold thousands of BRCK units across 54 countries in the world, and two weeks ago signed a partnership with Kenyatta University to research, design and develop technological solutions, including tablets.

Despite such evidence that Kenya has the capacity to grow a thriving local manufacturing industry and become a regional exporter of a wide range of technologies, the Government still appears to be paying lip service to its own maxim, Buy Kenya, Build Kenya.

But it has made some efforts. In March this year, President Uhuru Kenyatta directed procurement officers in State ministries and departments to purchase locally manufactured products as the Government sought to strengthen manufacturing capacity in the ICT sector.

And in 2003 while officially opening a Sh500 million textile processing plant in Athi River, then President Mwai Kibaki urged relevant Government ministries to support the local textile industry by providing affordable inputs and access to markets for cotton farmers.

Additionally, among the many identifiers of former President Daniel Moi’s 24-year rule is the development of the Nyayo Pioneer car. The vehicle was built at Kenya Railway’s Numerical Machining Complex (NMC), which at the time had the most advanced steel milling equipment in Eastern Africa.

The project was stillborn as the prototype, Nyayo Pioneer 1, broke down at the official launch and efforts to resuscitate the project crashed and burned. The NMC today lies abandoned, with billion-shilling equipment gathering dust.

The World Bank states that Kenya cannot succeed in its goal of becoming a “globally competitive and prosperous upper-middle-income country with a high quality of life by 2030” under its current approach towards local manufacturing.

NETWORKING SUPPORT

With more than 500,000 Kenyans joining the labour force each year, growing competitiveness in the manufacturing industry is the country’s best bet to create employment, and avoid economic stagnation and civil disquiet.

But growth in the manufacturing industry falls behind that of the overall economy, and the percentage contribution of manufacturing to GDP has stagnated for close to a decade.

The World Bank states that Kenya’s contribution to global manufacturing output has declined by 900 per cent in the last three decades, indicating a drastic fall in competitiveness.

Further, only a handful of manufacturers dealing in fast-moving consumer goods contribute to the sector’s Sh600 billion annual output.

Kamau Gachigi helped set up Nairobi University’s Fablab, a co-working space for engineering students, and is the executive director of Gearbox, a similar but much larger public initiative that provides infrastructure, training and networking support to engineers.

He said building capacity for a local manufacturing sector that is innovative and competitive with established brands requires more than just patriotic declarations of supporting local production.

“It is difficult to set up a local manufacturing ecosystem because building a local product from scratch to international and export-grade quality is often more complicated than most people appreciate, and success so far is mixed,” Dr Gachigi said.

“On the one hand, we have large established players like Bidco, Haco and Chandaria Industries that have succeeded and continue to succeed in building large manufacturing pipelines with popular brands that are exported to other countries in the region.

“On the other hand, manufacturing of non-traditional products like ICT hardware is still in its formative stage and we are yet to get significant traction.”

Gearbox is working on setting up a campus at the NMC grounds where hardware developers with ideas and prototypes can set up shop and get resource, skills and mentorship.

“We are negotiating the leasehold with Kenya Railways to use the facilities at the premises, and hopefully within a year, we shall be up and running,” Gachigi said.

He added that even after the research is done and a prototype successfully developed, local manufacturers have to aggressively campaign for consumers’ buy-in to gain traction.

“For companies like Mobius Motors, which has successfully proven that making an affordable car in the country is possible, the next step for them is getting the goodwill of Kenyan consumers, most of whom still opt for imported second-hand cars.”

But with thousands of engineering students graduating from universities, and technical and vocational training institutions, the need to build a larger manufacturing sector and create more jobs is getting more urgent by the day.

Gachigi called for shift in the teaching of engineering skills to properly equip students and the future labour force for the manufacturing sector.

TRADITIONAL APPROACH

“The traditional approach in our universities and technical training institutions is to take the student for practical work in the lab, they create something and we grade them on the result,” he said.

“But in a lab environment, the conditions are moderated and the outcomes often always predictable, and this limits risk and innovation.”

Instead, Gachigi suggested that instructors allow room for trial and error, and even failure among students.

“Have students experiment on building various engineering solutions to various problems without the worry of the consequence of failure hanging over their heads,” he said.

He added that learning institutions should invest in more equipment that provide students with the practical exposure of the real world.

“We need to have our students exposed to these systems while they are still learning, so that by the time they are done with their studies and manage to land internships or jobs in manufacturing plants, their learning curve is more progressive.”

[e-mail]