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Made in Kenya: How to empower SMEs and Young Entrepreneurs in Kenya

Pushing a small business forward is sometimes all it takes to start the recovery of a community. When leaders choose to meet entrepreneurs with a vision and a sustainable and profitable project, it strives to support them not only to make both ends meet for their families, but also to have a positive impact and be a driving force for their community.

The former Prime Minister and the African Union High Representative for Infrastructure Development, Raila Odinga has challenged key players in the economy to change the investment strategies in the country. From having a permanent central Human Resources Development body dedicated to identifying skilled youths, organizing domestic skills competitions and picking the best performers to creation of a system that mixes skills and knowledge as the path to industrialization, jobs and the future. With Raila’s projectile economic vision, experts including the legal members have countered him with evidences of underneath performing investments in the Nation.

Empowering the Youth

“My dear Kenyans. When did you last see a product with the label ‘Made in Kenya?”… Began a long interactive message from the social media pages of Mr. Odinga on Sunday morning.

Mr. Odinga who is the leader of Orange Democratic Party, created a fastening conversation where he advocated for the empowerment of local business through the uplifting of local products.

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He was intrigued with how different nation abroad and in the neighborhood have been paying attention in promoting the youthful business economy, by allowing them be the lead in the production sector. According to him Nations whose youths have consistently taken the top medals in the industrialization field challenges have enabled their nations to be industrial powerhouses and thrived even in the worst economic times.

“Developed nations like Japan, Canada, Germany, Korea have taken their youths to this competition to showcase skills beginning with basics as technicians, tailors, cooks, hairdressers, artisans, craftsmen. They graduated to machinery and manufacturing, then to computing, information processing and IT.”

Using an example of the World Skills Competition, where in every two years since the 1950s, young and like-minded small and medium sized enterprise (SMEs) managers with exceptional skills always gather in any city in some part of the world, has inspired young competitors to reach new heights, helping them turn their passion into profession.

Strategic Approach.

Accusing the Kenyan economy of sluggish nature, he said that there are no shortcuts to development. The country in the recent days has been marred by immense cases of corruption, a synonymous case that has seen the Kenyan budget hit a ceiling of Ksh.3.7 trillion, sending more shivers of tax increase to the pockets of Kenyans. A scenario that Mr. Odinga has negatively eulogized as one of the factor undermining the economic growth in the nation.

In appreciation of the SMEs Mr. Odinga has defined several strategic approaches to be done in order to help the Kenyan Economy where almost 98% of the businesses in the country are being controlled by them.

“We need a permanent central Human Resources Development body dedicated to identifying skilled youths, organizing domestic skills competitions, picking the best performers, organizing training camps and sending them out to compete with the world at the “Skills Olympics.”

The body will keep data bank on the skilled youth, source support, including extending specific incentives to SMEs ran by craftsmen and artisans and ensure that their passions become professions, industries and jobs for the nation. The body will source incentives for existing industries to extend rewards and scholarships to those with technical skills who want to continue perfecting them.

SMEs are often times poor (in resources and capacity) especially when driving growth and international expansion. They often lack sufficient scale to economically justify the full time employment of appropriate skills for international business and rely on either external providers or an energetic and multi-tasked executive to deliver the required competencies to drive global growth. In Kenya for instance, SMEs have shown resilience and determination even in a market that is deemed difficult. When Multinationals companies exit the economy, it is the SMEs that fill that void with jobs and services delivery.

As in the case for Raila, the body will establish a tradition of apprenticeship training to help skilled youth keep updating their skills in line with changing times. As we keep data on and support skills, we must open pathways for a steady flow. We need to recreate and mainstream vocational high schools.

We need clear parallel education paths. Those who wish to proceed to university after high school should be allowed to do so. Those who want to proceed to vocational training should also be encouraged to do so.

Change of SME mentality.

Arguing on how the society has continuously viewed the SME sector as informal and not qualified in providing definitive and quality goods, he accused the education system in Kenya for continuously prioritizing on the digesting the western content to the youthful generation. According to the respondents in the How Brands Are Born show, the founders of most of these SMEs are well trained and equally well exposed, the need for funding, marketing and visibility is the challenge that lowers the success rates of most businesses. With expectations that the key drivers of the economy are going to be the upcoming generation in a society that has already digested the local market as stale and void of quality, the country would automatically lag behind.

“In recent years, the Ministry of Education has made some good strides in promoting skills education. But there is little or no effort to channel those skills once students leave school. The human resource body should deal with this. More importantly, we need a concerted campaign against the societal mindset that takes a dim view of skilled manual workers. We need a massive campaign on how our society has traditionally defined success, what we, the parents expect of our children, and what we as individuals expect of ourselves. We need to convince our people that academic papers are good and our children still need them. But we need to appreciate that societies that have placed equal emphasis on both knowledge and skills have done better,” wrote Mr. Odinga.

With the Unemployment Rate in Kenya expected to be 7.00 percent by the end of this quarter, according to Trading Economics global macro models and analysts’ expectations. They estimate Unemployment Rate in Kenya to stand at 11.90 in 12 months’ time. Cases of stampedes on advertised vacancies have been going round and round social media pages, evidently depicting how the youthful generation has not clicked in embracing the SME sector by becoming their own entrepreneurs.

Technology, has been changing way things have been operating in the country, as unemployment cases continue to surge. Many corporations adopting technology to do the work humans used to do, Mr. Odinga suggests a system that mixes skills and knowledge is the path to industrialization, jobs and the future.

“We still need professional degrees so that we can have doctors, lawyers or accountants, etc. But with the high graduate unemployment or underemployment, with many corporations adopting technology to do the work humans used to do, a system that mixes skills and knowledge is the path to industrialization, jobs and the future.”

Made in Kenya Brands Controversy

Barely hours after Mr. Odinga shared his thoughts on how the Kenyan economy was staging itself in the bad side of the economy, many experts and Kenyans took to social media counteracting his ideas.

While the country experiencing a period where there are about 7.41 million SMEs in Kenya, according to the Capital Markets Authority (CMA). Most SMEs are not registered despite their effect in the country’s GDP.

Law society of Kenya, Nelson Havi countered the former prime minister message by showing a brand that’s made from Kenya.

“Baba, these Cuban olive fatigues are made in Kenya by Manchester Outfitters. The Executive Presidential ‘handbag’ is made in Kenya by Jo Ka Jok. The antique leather Sir Winston Churchill Chesterfield is made in Kenya by Henry West….” Said Havi in a twitter post.

However, another Kenyan with a twitter holder name Punda Amechoka reiterated to Havi’s statement

“We are importing almost everything, the last time I checked the labels on a matchbox and a mosquito coil I had bought for use on my balcony, both were written “Made in Tanzania”. Even toothpick is not spared.”

The Kenya Association of Manufacturers came on spot as experts queried on its support for the local business and support of the SME market. The organization which has been on the forefront and center of driving fact-based policy advocacy towards the formation of industrial policies that strengthen and support the country’s economic development, was placed under a hot seat after entrepreneurs failed to understand it’s agenda in the general defense of the local economy.

Answering Linus Gitahi’s post on twitter, Wachira Dennis emulated the family business and how brands are natured from the tender most stage to the big definitive arena in the market with examples of successful business moguls in the society today.

“…..Gitahi manufacturing skills have to be honed from childhood- that’s why Manu Chandaria, Hebetullah & the rest continue practicing what their fathers did (manufacturing). KAM is only concerned with power prices, roads & water but zero concern on skills development,” wrote Dennis.

Way Forward for the Youthful SMEs.

Despite the tussles and dazzled ideas surrounding SMEs, it has been evident that the country has not yet invested in empowering the youths to becoming future powerhouse in an ever changing economy.

Mr. Odinga says, “We need a massive campaign on how our society has traditionally defined success, what we, the parents expect of our children, and what we as individuals expect of ourselves.”

This alone provides a base of what our society is made of.

“Then we shall be on the path to seeing ‘Made in Kenya’ products on our shelves. We can work together towards this goal,” he further writes.

While there are only 1.56 million SMEs licensed and 5.85 million are unlicensed, according to the Kenya national bureau of statistics (KNBS), the high number of unlicensed SMEs is indicative that the time is ripe to create a conducive space for SMEs to be productive and profitable at local and regional levels.

Mombasa, Kenya.

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