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Tuesday

Jun232015

Kenyan Products a Global Success Story

Tuesday, June 23, 2015 at 8:35AM

The East African nation of Kenya has become synonymous with high-quality agricultural products, and offers lessons for other countries across the South. The country has been able to combine innovation in new technologies (it is a pioneer in mobile phone applications like m-banking), with quality control for its products like the Coffee Kenya Brand logo (http://www.coffeeboardkenya.org) and ease of access to information on Kenyan products and resources via the internet – crucial to drumming up international business – like the SME Toolkit Kenya (http://kenya.smetoolkit.org/kenya/en) .

There are several advantages to improving standards and productivity in agricultural products in Africa. The first is regional: greater productivity and efficiency will help in reducing malnutrition and food crises that have plagued the continent for decades. Secondly, it also allows Africa to export food to other countries with fast-growing economies and boost the continent’s wealth.

The dramatic changes taking place in African countries – especially rapid urbanization that has made the continent home to 25 of the world’s fastest growing cities (International Institute for Environment and Development) – means there is an urgent need to increase food production and stabilize rural economies to support farming.

Kenya is considered home to one of the continent’s most successful agricultural production zones, with multiple agricultural products and brands developing a solid global reputation for quality.

The country benefits from the fertile Great Rift Valley (http://en.wikipedia.org/wiki/Great_Rift_Valley) , where the country’s biggest crops – tea and coffee – are grown.

Agriculture is a key part of Kenya’s economy: 75 percent of the working population is employed in the sector. Farming sits behind tourism as the country’s second biggest contributor – 20 percent – to the gross domestic product (GDP).

Kenya has had a great deal of success with fruits, vegetables and flowers (Kenyan flowers are a mainstay of many European supermarkets). Kenya has been able to achieve this by using well the 10 percent of the country’s land that is suitable for farming.

Around Mount Kenya (http://en.wikipedia.org/wiki/Mount_Kenya) , the cool and wet climate is perfect for farming tea, coffee, flowers, vegetables, corn and sisal. Other products that have been successfully grown include sugar cane, pineapple, cashew nuts, cotton, and livestock-related products – dairy goods, meat, hides and skins.

Kenya’s main export markets are the United Kingdom, the Netherlands, Pakistan and the United States. This agricultural export success has had a knock-on effect of reinforcing a global reputation as one of Africa’s best countries for business.

In the tea market, James Finlay and Williamson have a strong reputation and sell to major supermarkets in the UK.

Another successful tea company is Kenya Tea Packers Limited (Ketepa) (http://www.ketepa.com) . A Kenyan-owned company, it enhances the standard of living of the small scale tea growers of Kenya who are the bulk of its shareholders.

Kenya is one of the world’s top 20 coffee producers and has a good reputation for its Arabica beans. Kenya produces 2 million bags of coffee a year and the coffee industry employs 6 million people (www.coffeeboardkenya.org) .

When it comes to exporting flowers (http://www.kenyan-flowers.com) , Kenya is a global powerhouse: 38 percent of the world’s exported flowers are grown there. The majority – 97 percent – are sent to the European Union. Its popular flowers include chrysanthemums, roses and carnations. This time-sensitive crop benefits from the air links of its capital, Nairobi.

Kenya even has a successful brand of beer, Tusker Lager (http://www.tuskerlager.co.uk) . It is a leading export and is proudly African, with its elephant logo and motto “My beer, my country.” It has a large market in the United Kingdom.

By David South, Development Challenges, South-South Solutions

Published: June 2010

Development Challenges, South-South Solutions was launched as an e-newsletter in 2006 by UNDP's South-South Cooperation Unit (now the United Nations Office for South-South Cooperation) based in New York, USA. It led on profiling the rise of the global South as an economic powerhouse and was one of the first regular publications to champion the global South's innovators, entrepreneurs, and pioneers. It tracked the key trends that are now so profoundly reshaping how development is seen and done. This includes the rapid take-up of mobile phones and information technology in the global South (as profiled in the first issue of magazine Southern Innovator), the move to becoming a majority urban world, a growing global innovator culture, and the plethora of solutions being developed in the global South to tackle its problems and improve living conditions and boost human development. The success of the e-newsletter led to the launch of the magazine Southern Innovator.

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Dynamic Growth in African ICT is Unlocking Secrets of SME Treasure Trove

Monday, June 15, 2015 at 11:05AM

A newly released survey of 14 African countries in 2006 has documented the impact of Information and Communication Technology (ICT) on private sector development and how it is contributing to developing a vibrant Small Medium Enterprise (SME) sector in Africa. It discovered how dynamic the SME sector is, how it has rapidly adopted mobile phone technology (96 percent have it), and how if used properly in concert with this new technology, extraordinary economic growth is possible.

The survey – Towards An African e-Index: SME e-Access and Usage in 14 African Countries – covered only businesses employing fewer than 50 people and took in the vast informal sector in the countries. It investigated if they had access to ICTs, how they are using them and if it was making them more productive. SMEs were especially interesting because they do not waste money (most people are just trying to survive) and they only use what is really useful to them to increase income. In the informal sector this has become the mobile phone.

The countries surveyed included Botswana, Cameroon, Ethiopia, Ghana, Kenya, Mozambique, Namibia, Nigeria, Rwanda, South Africa, Tanzania, Uganda, Zambia and Zimbabwe. With most of the continent’s poor working in the SME sector, little was actually known about the impact of ICT and its link to profitability and labour productivity. And surveying only formal businesses would be telling half the story since about two-thirds of non-resource driven GDP generation is derived from SMEs, and a large share of that from informal ones.

“This is a sector that has no access to formal finance,” said Dr. Christopher Stork, a senior researcher at the Witwatersrand University in South Africa. “The mobile phones present an opportunity to tap into this market and offer finance, banking services, cash transfers – we see this already in Kenya – without the risks of other services. These informal businesses can build up a history, learn how to better control their businesses, and receive loans. Where the financial system is dysfunctional or overpriced, airtime credits can be the new cash form.”

Africa has a high proportion of entrepreneurs because people have next to no social supports to fall back on and need to do business to survive. Most fall into the informal sector where they can avoid paying tax, pay low wages, and keep overheads down. According to Stork, if governments are serious about dealing with poverty, then the best approach is to acknowledge this sector, and rather than crush it, draw it in to become more sophisticated and efficient. He sees the mobile phones as key to this strategy.

“Innovative technology can help these entrepreneurs to acquire the tools they need to do business better. There is a lack of skills in all areas, a lack of accounting skills, a lack of basic financial management. This is where ICT can overcome this. SMEs can get a monthly statement with all their business transactions, making it easier to manage things. This would be a great way to distribute micro-finance. Savings clubs could store cash on the phones.”

The e-Index also noted the trend for mobile phone providers to consolidate and offer common regional services. This could fuel an explosion in cross-border trade as it becomes cheaper and easier to communicate via mobile phone for business. The e-Index also found the ever-growing importance of internet cafes remains. They continue to evolve into multi-purpose business centres offering a wide range of services, from post to word processing. At present they still remain the main means of accessing the internet. And with broadband still minimal and very expensive, it falls on mobile phones to offer internet access, though this will remain mainly in the continent’s capitals.

The survey’s sponsor, Research ICT Africa! (RIA!) network, seeks to build an African knowledge base in support of ICT policy and regulatory design. The network emerged out of a growing need for hard data and analysis to help the continent join the information age. Throughout 2007 it is conducting household surveys on e-access and e-usage and will present the findings in 2008.