Jua Kali Sector Has Potential to Boost Local Manufacturing

By Soko Directory Team / January 27, 2016

youth Africa

In the past, anything that defined industry or creative works of cultural expression was found within the Jua Kali sector. Jua Kali was also the foremost image conjured up by slogans about ‘pulling together, working hard and building the nation’. Our collective ideas around what hard work is and who does it, seemed to take form in the depiction of men and women labouring in the sun, creating things that are vital for our society with their own hands.

As years went by, and the industry began to incorporate machinery and advanced technologies in the process of making items and products, the term ‘Informal sector’ started becoming synonymous with Jua Kali. It created a dichotomy where ‘Formal’ meant progressive and ‘Informal’, the opposite. But this was a simplistic representation of the value of the Jua Kali sector and the differentiation, robbed us of the opportunity to utilize its abundance. Therefore, people who identified their businesses and enterprises as ‘Formal’ continued to invest in advanced technologies more and more, whilst paying little attention to the potential of the Jua Kali sector.

Let us take a good example of the furniture industry. In a report done by the World Bank last year, global furniture production has increased over the last decade every year (except for 2008 and 2009). Global trade in furniture stands at USD140 billion with Africa accounting for 2.2% of the overall output.  According to the report, ‘The East African furniture market is valued at US$1.2 billion and trade in the region is worth US$298 million. Kenya is the largest producer of furniture in East Africa.” Ironically, even as the compound growth rate of furniture continues to increase at 10% from 2013, the imports constitute 13% of the total markets. They are gradually saturating the local market despite our country’s resources and long-standing history in the craft. Evidently we have the material and the skill, yet imports continue to dominate large portions of our markets. Why is this so?

One of the significant factors attributed to this discrepancy is, poor production facilities as a result of low investment in new technologies. In our creation of the above mentioned dichotomy we failed to see how to utilize Jua Kali as a steady and well-grounded stepping stone by complementing it with new technologies. By the time we realized this, other suppliers had started to meet the diverse and increasing demands from our local populations. Innovation does not refer only to new ideas brought to life in new ways of working; it also means finding a new purpose and new ways of working for conventional ideas.

Hence, this is how we can remedy this situation and drive one of our country’s leading sectors to achieving its full potential. By all means we should continue to look into new technologies, including Research and Development and setting up prototyping facilities to develop new products. However as we do this we should inculcate the innovation and ingenuity of the Jua Kali sector.  Jua KalI’s reach of diverse market segments, their cultural/social networks and the ability to customize products according to their customers’ desires, are qualities that can be leveraged to exploit the local markets. We need to look at complementing these qualities and provide incentives to upgrade existing technologies to boost the sector’s productivity and sharpen our competitive edge as a country. We can do this whilst expanding manufacturing facilities to move towards serial production to satisfy local consumption.

The Government has pointed to furniture as one of their key focus areas for the industrial transformation programme, which is encouraging. It is however crucial that we start looking at how we can reduce the costs of raw materials which undermine the sector’s productivity and competitiveness.  Additionally, we must adhere to the timelines set for the realization of the industrialization blueprint; doing so will make the sector more and more attractive a young workforce who will in turn add value and increase its profitability.

Our Government must also establish a Kenyan Center for Excellence to provide global-standards training for the industry and to churn out cutting edge research relevant for the growth of this market. Subsequently, this should go hand in hand with the ‘Buy Kenya, Build Kenya’ public procurement initiative that will also act as a call to action for Kenyans to support locally manufactured goods.

When exploring diverse ways through which to advance ourselves, we need to begin with our present strengths as a take-off point. The reason why Jua Kali resonated with our national psyche of hard work in the past is because it also incorporates a lot of our cultural qualities in its business dynamic. Let us use these qualities as unique differentiators to soar to great economic heights.

The writer is the CEO of the Kenya Association of Manufacturers and can be reached on [email protected].

About Soko Directory Team

Soko Directory is a Financial and Markets digital portal that tracks brands, listed firms on the NSE, SMEs and trend setters in the markets eco-system. Find us on Facebook: facebook.com/SokoDirectory and on Twitter: twitter.com/SokoDirectory

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