The Flying Geese Economics starting to be felt in kenya

After the expiry of President Moi’s tenure in 2002 and in came the Makerere and London Trained School of Economics President Kibaki, Kenya has seen the influx of foreign  firms across the globe ranging from manufacturing firms, ICT firms and financial services discipline either relocate or  shift their global offices or set up what I may term as technologically  dead end  activities  that are  labour intensive thence achieving their economies of scale.

 Having those functions administered in their home countries is more expensive but cheaper in developing countries due to , high investments in energy production ,  cheap labour coupled with the tax incentives offered to these foreign firms in the name of “free trade” and subsequently the comparative advantage of countries like Kenya, Ethiopia, Ghana and Nigeria in using  labour intensive technologies that  are industrious  in the global chain of production  one may postulate why speak about this model, my home country Kenya has  seen the entry of Chinese motor vehicle maker, Foton, which is investing Sh1.6 billion in an assembling plant in Nairobi. The budge is set to intensify competition in the new vehicle market among local dealers and has further signed an agreement with Thika-based Kenya Vehicle Manufacturers to assemble for them, according Foton East Africa general manager Calvin Guo said the company sold 1.2 million units worldwide last year. Former Prime minister gives a speech during the launch of Foton assembly plant in Nairobi,kenya.

This means the Monopolies and Price Commission will have to cave in to Michael E. Porter‘s five market forces to adapt to these emerging demands, their Asian counterparts Japan through its Brand Toyota Kenya has invested KShs 500 million in a truck and bus assembly plant in Mombasa Kenya’s coastal tourist  city  complete with a new showroom to improve marketing according to their Hino Motors general manager Kazuhiko Wanabe said it expects to produce 40 trucks and buses each month but will increase production to 200 units within a few months of operation. Toyota hopes to sell 1,200 Hino units by 2015 all these Asian Companies are taking advantage of the tax incentives on import of completely knocked down units (CKD) — the parts needed to assemble a vehicle — which are zero-rated in Kenya as opposed to a 25 per cent import duty on vehicle imports - all done and dusted as envisaged in the governments' master economic blueprint dubbed  Vision 2030.Commissioning of the Hinos Toyota Plant in Mombasa.

Further in the electronic Industry Korean electronics supremo Samsung is set to unwrap a television, laptop and printers’ assembly plant in Kenya by end of year  - as its gateway to the horn of Africa and the great lakes region according to the firm’s top management the venture is likely to absorb more than 900 locals in terms of employment - the firms overall target is to realize more than $2 billion revenues by 2015 in the great lakes region and  by large the horn of Africa considering the gradual return to normalcy by our neighbors’  Somalia , the firm is also setting an assembly plant in Abyssinia present day Ethiopia to tap into the growing  bourgeoisie  class , bearing in mind its other assembly plants in South Africa , Sudan and Senegal. The recent Jubilee Coalition manifesto on providing free laptops to those pupils joining class one in primary school from January 2014 though ambitious could end unlocking the dormant potential in our youths who get exposed to the digital age in their late twenties - despite its inherent challenges.The textile industry is not worth writing about given the predicaments it has faced from importation of second hand clothes, to the Export Processing Zones  facing industrial strikes, high energy costs inter- alia despite having a 25% tax holiday for 10 years in short you do not expect to compete with countries that are technologically advanced in the textile industries vis a vis the labour intensive ones even in the face of the famous AGOA agreement unless you emulate them. A brief documentary on Samsung's partnership with JKUAT on  construction of a laptop assembly line by September 2015.

In a nutshell as we become captives of the flying geese model as a nation we can only diversify our labour markets by offering incentives to those university graduates on internship or in college by subsidizing their study costs especially the ones pursuing the STEM degrees  and urge the government to pursue  Equity banks’  model  of the “Wings to fly “, offer more incentives for those coming up with new inventions and innovations  through their firms or on individual basis  and or further  pursue bilateral engagement for instance the  Kenyan Korean approach on nuclear studies where the country  now has 11 students undertaking master’s courses in nuclear engineering in preparation for 2022 generation of electricity , when Kenya will start using nuclear energy anchored with the likely revenues from the oil in Turkana and  titanium in kwale can be channeled  towards this end  -  in the end transfer  new forms flying geese models to the rest of the Africa. A beneficiary of the Equity banks’  model  of the “Wings to fly speaks out.