State in the right direction, but more needs to be done

By Ken Opalo

The scenes witnessed in Nairobi at the Qatar Airways job recruitment event on April 19th said it all: An embarrassingly large number of Kenyan youth are unemployed and desperate for just about any job.

The creation of jobs is therefore the only poverty reduction strategy we should be thinking about. After security, it should be the number two priority of the national government. For the County governments it should be the number one priority.

The Government announced that last year the economy generated more than 740,000 jobs. Although many Kenyans on social media greeted the figure with skepticism, I think that the announcement reveals a newfound seriousness about job creation. You see, the best signal of government seriousness about anything is when they begin to quantify it and keep records. With the announcement of job numbers from last year, what Kenyans should do is demand for an explanation as to why the Government failed to achieve its target of one million jobs. We should also ask for regular monthly updates on the state of the job market, by sector.

As a country we can politic all we want, but if we cannot provide a decent livelihood for our people, we will remain stuck in the past.

About 38 per cent of our people – that is a whole 16 million people – live below the poverty line. This is a statistic that should keep State House and the Governors awake all night.

I am glad that Trade Cabinet Secretary Adan Mohamed finally came out of the shadows to declare his plans for growing the Kenyan economy and creating jobs for our youth. The idea of a Textiles City, to be based in Athi River, is brilliant. It does not matter that our cotton industry is in tatters; once the factories come to Athi River, enterprising farmers in the old cotton belt on the shores of Lake Victoria and elsewhere may just revive this old sector.

The County governments in former cotton growing areas should take the challenge and prepare their farmers for this eventuality. On this score economic units in the counties are best advised to learn from the experiences of the tea and coffee sectors. The only way textile firms in Athi River will tie their fortunes to Kenyan cotton farmers’ is if they can reliably expect steady supply. Sophisticated agricultural extension system and advisory services will therefore be required.

The Department of Agriculture may step in to help, but the County governments must also take this as a key development priority. With proper planning and monitoring the shift to cotton growing from sugarcane and food crops should not cause much disruption. But without foresight it sure will. The last thing we want is cane and maize shortage in the name of cotton growing.

Moving beyond textiles, Mr Mohamed announced that he plans to have the industrial sector constitute 20 per cent of GDP in the next 16 years (we are currently at 11 per cent). This would definitely be a step in the right direction. The hope is that the focus will be on sectors that can absorb large numbers of low skilled labour – including high school leavers and below.

Government should plan and act strategically to ensure maximum benefit from the ever-rising cost of labour in China and other poorer East Asian countries. And we should do this with an eye on our neighbour to the North, Ethiopia. With over 85 million people, Ethiopia has a relatively endless pool of cheap labour. Our advantages, for now, are that we have a better-educated workforce and that Ethiopia is landlocked. We must ensure that we do lot lose the former comparative advantage by emphasizing the right subjects (especially Science, Technology, Engineering and Mathematics) at all levels of schooling. To reinforce the latter, we must lower the cost of doing business, including transportation and logistics and power.

To this end the County governments and relevant line ministries must work together to ensure that critical economic hubs are well served by transportation links. In addition, the Government must ensure that it delivers on its 5000+ megawatts of new installed power capacity in the next 40 months at affordable cost. Just over 80 per cent of Kenyans remain off the power grid. The proposed cities in various parts of the country will bring this number down, but only if the supply is cheap and reliable.

Overall, the Jubilee Government appears to be hitting the right notes. Now if only we were a little more serious about fighting graft and the rot in the public service. Messrs. Kenyatta and Ruto should also do a better job of getting Kenyans (and the public service) behind these grand ideas.

The writer is a PhD candidate at Stanford University and consultant with IPRE Group