Kenya manufacturing shrinks and exports to region fall, contributing to job losses, raising more questions on #BBIReport

I had not realized quite how badly this was going, as reported in Standard story this weekend.

No wonder Kenyans On Twitter are energized against the performance of the Government in a seemingly broader and deeper way than in the past when the the economic malaise did not get as deep into the “middle class”.

The employment emergency described by the BBI Report is real, but the proposed solution is rapid industrialization for regional exports. There was already a credibility problem for the current Government as to what in the Building Bridges Initiative would make that type of rapid growth likely to happen. Now we see that the actual performance of the current system is not slow growth but rather a sharp decline in manufacturing and regional exports.

And again, a lot of the problem is thinking based on a relatively paternalistic environment where as long as Kenya “played by the rules” the major world economic powers that could otherwise squash Kenyan manufacturing at least conceptually would cheer Kenya on in developing into a regional manufacturing leader. In the real world of 2013 to date and in the future envisioned by the BBI, Kenyan manufacturing has to compete with Chinese manufacturing both domestically and for regional exports. And China doesn’t have the debt problem that Kenya now has.

Fuel Distribution Crisis Hits Kenya, and Other Economic News

“Kenya oil industry in chaos as fuel shortage bites”, reports the Daily Nation:

Motorists stood in long queues on Wednesday as one of the most severe and bizarre fuel shortages hit many parts of the country.

Many people ran out of fuel on the road while others were forced to leave their vehicles at home and take public transport. (IN PICTURES: Nairobi fuel crisis)

Petrol stations were forced to close after running out of fuel due to panic purchases.

The absence of petrol at the pump, particularly after the government confirmed that there was 19 million litres in storage tanks in Nairobi, is a commentary on the chaos in fuel distribution.

On Wednesday, the government passed the buck to the oil companies, accusing them of creating a shortage by refusing to order adequate stocks over the Labour Day holiday.

Today’s Star also reports that Prime Minister Odinga, speaking at Great Lakes University in Kisumu, said that the private sector is the only source for vital job growth:

He said the country must create a conducive environment for the private sector to thrive as a solution to the unemployment crisis. He said the private sector is the engine of economic growth thus the need for both local and foreign investors to increase investments that can create jobs for the youth.
Raila said the 750,000 graduates who join the labour market every year from schools, colleges and universities cannot find employment in the public service with about 50,000 job opportunities only every year.
He assured Kenyans that available positions in the public service will be distributed fairly among all the communities in the country in accordance with the constitution.
On education, the PM decried low levels of research in the country saying privave sector has refused to fund research unlike in other countries.
He said, the country needs to invest more on research work to provide more job opportunities.

The Star also reports additional international funding, from Germany, for geothermal power development:

THE 280 MW Olkaria geothermal power project by KenGen yesterday got a Sh7.4 billion boost from Germany’s Development Bank KFW to fund consultancy services and part of the steam field drilling works.

The money will fund extension of Olkaria one and Olkaria IV power station project targeted for completion by end of 2013. The overall cost of the project is Sh83 billion and is being co-funded by KenGen, World Bank, European Investment Bank, Japan International Corporation Agency and French Development Agency, AFD. “Development of renewable energy is excellent for development of Kenya and for the environment,” remarked KFW Director General for Middle East and Africa Doris Koehn during the loan agreement signing ceremony held yesterday at KenGen offices in Nairobi.