safic kenya
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SAFIC Kenya . Country Background Report February 2013 . SAFIC Kenya Team Members . Prof. Dorothy McCormick - Country Coordinator Dr. Paul Kamau – Team member Prof. Lotte Thomsen – Team member Dr. Jackson Maalu – Team member Dr. Radha Upadhyaya – Team member - PowerPoint PPT PresentationTRANSCRIPT
SAFIC Kenya Country Background Report
February 2013
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1. Prof. Dorothy McCormick - Country Coordinator2. Dr. Paul Kamau – Team member 3. Prof. Lotte Thomsen – Team member 4. Dr. Jackson Maalu – Team member5. Dr. Radha Upadhyaya – Team member 6. Mr. Wamalwa Nyukuri H– Team member and Project
Assistant/ PhD Candidate 7. Mr. Nester Peter K’Ochupe – MA student recipient of
the 2012 SAFIC project grant8. Ms. Zidi Odhiambo – MBA student recipient of the
2012 SAFIC project grant
SAFIC Kenya Team Members
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Land: East Africa - 582,642 sq km; 30 % suitable for crops.
Population: Est. 2012 pop 41.8M, 43 % below age 15; 36% aged 15-35 years
Population growth: Projected to reach 60M by 2030
GDP: 2011 GDP approx. US$ 34.8; GDP per capita US$ 851 (WEF, 2012).
GDP Growth: Growth rates of 6.4%, 7.0% and 5.8% in 2006, 2007 and 2010 respectively
Industry: Manufacturing sector 14% of GDP.
Kenya
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GDP Growth at Market Prices
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Recent Events: New constitution in 2010; called most
progressive in Africa Critical feature is devolved structure of the
government; coming into play from 2013 Key policy documents reiterated
commitment to expand industry, trade, and tourism: Kenya Vision 2030 (2007); Economic Recovery
Strategy for Wealth and Employment Creation (2003)
food processing named as the most important single sub-sector in GDP and employment creation.
Political and Economic History
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TradeGlobal: Founding member of WTO Regional: Member of:
East African Community (EAC)Common Market for Eastern and Southern Africa (COMESA).
EAC and COMESA together account for over 40% of exports.
Cross-regional: Economic Partnership Agreement (EU-EPAs) with the European Union (EU) US African Growth and Opportunity Act (AGOA) and Generalized System of Preferences (GSP).
International Context
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Unfavourable business climate: Kenya ranked 106th out of 144 countries
included in WEF survey Global Competitiveness Index of 3.7 (World
Economic Forum (WEF) (2012). Main business climate issues: corruption,
inflation, tax rates, insecurity, access to financing, inadequate supply of infrastructure, inefficient government bureaucracy, and policy instability.
Business Climate
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Despite the terrible business climate, some local firms have done well.
Study designed to understand how the successful businesses manage to weave through these conditions and remain not only operational, but in some cases, highly successful.
Two sectors – food processing firms and food processing equipment manufacturing firms
Study Motivation
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Scope: Nairobi Metropolitan Area (NMA) Nairobi and neighbouring counties of Limuru,
Kiambu, Thika, Ruiru, Mavoko, Machakos, Kikuyu (see map)
Time frame: Mainly between August and September 2012 but still ongoing.
Sources of information: No single list; used variety of sources Consolidated list from all sources analysed
during team meeting held in August 2012. Preliminary firm level data to be updated
during survey.
Study Methodology - Mapping exercise
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NMA Map
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Table 1: Manufacturing Sector - Percentage Contribution to GDP
Food Processing Sector
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2007 2008 2009 2010 2011Manufacturing % of GDP 10.4 10.8 9.9 9.9 9.4Manufacture of Food, beverages, tobacco % of GDP 3.2 3.1 3.2 3.1 3.2All other manufacturing % 7.2 7.7 6.7 6.8 6.2
Table 2: Manufacturing Sector - Percentage Growth
Food Processing Sector
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2007 2008 2009 2010 2011
Manufacturing % 6.3 3.5 1.3 4.5 3.3Manufacture of Food, beverages, tobacco % 8.7 -1.8 2.2 3.4 1.6All other manufacturing % 5.2 6.0 0.9 5.0 4.0
Vision 2030 stresses the importance of the manufacturing sector and identifies food processing as the most important single sub-sector in terms of its contribution to GDP.
Table 3: Manufacturing Sector - Percentage Contribution to Employment
Food Processing Sector
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2007 2008 2009 2010 2011
Manufacturing Wage Employment ('000) 237.9 237.2 238.6 242.4 247.6
Total Private Sector Employment ('000) 1281.7 1305.9 1346.5 1399.6 1446.6
Manufacturing as % to Total Private Sector Employment 18.6% 18.2% 17.7% 17.3% 17.1%
Table 4: Number of Firms in Food Processing Sample by Product Grouping
Food Processing Sector
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Broad Area No of FirmsBakery 259Grain Milling 203Horticulture 26Juices 67Sauces and Jams 78Snacks 277TOTAL 910
Mapping exercise to date: 28 firms directly involved in manufacture of
food processing machinery and equipment. Sources: Five main sources-
Kenya National Bureau of Statistics (KNBS), Kenya Bureau of Standards (KEBS), Municipalities of Kiambu, Mavoko, Kikuyu and Ruiru, Ministry of Agriculture and United Business Association (UBA).
Still searching for additional firms in the industry through websites and field visits.
Food Processing Equipment
Manufacturing Sector
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Vision 2030 – names six priority sectors, including agriculture and manufacturing.
The draft National Industrialisation Policy, 2011-2015, envisions industry as Kenya’s new ‘engine of economic growth’ (Kenya 2011b).
Draft National Trade Policy is dated 2010 (Kenya 2010).
EAC and COMESA membership Devolved structure of government Linkages with institutions such as KEBS Linkages within UoN – DRUSSA
Further Investigation – Policy relevance
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Population size: Difference in the two sub-sectors - 910 food-processing firms but only 28 Machinery and equipment firms .
Limited mapping data: Lack of employment and ownership information in the lists used for the mapping have implications for sampling.
Case studies: Approach - Qualitative case study approach preferable to problem-oriented study (Yin 2003, Baxter and Jack 2008, GlobaLens 2012). Number - reduce cases from 20 to 10.
Further Investigation – methodological issues
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Thank you!
SAFIC
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