Unemployment: We are our own enemies

Matsiko Kahunga For starters, we must applaud the initiative by the Institute for Policy Analysis and Research (IPAR) for sounding the drum on youth unemployment, thus the forum in Kigali yesterday. At such previous fora, I have always asked participants – every time East African Community (EAC) matters are being debated– “Stand up tall, to be counted, if any of what you are wearing today (from the innermost to the uttermost), is made in East Africa…” The latest of such fora was an Intra-EAC Trade Dialogue for Women Traders and Light Processors in Kampala on Thursday last week-November 20, 2014. The latest score I have to this question, from the Kampala dialogue cited above is 0.5 per cent. Only one person in the 50 present, raised her hand in affirmative response to this question, and even in her case, it was only a fraction of her attire that day that was East African. Hopefully, delegates to the IPAR-organised forum did better than this. Earlier answers have not scored any better. And therein lies the bane of East Africa. And therein lies the saviour of East Africa. Wandugu, we need to look the issue squarely and directly in the face, and stare at ourselves. In short, we are our own enemies in this unemployment time-bomb, and we must be our own saviours. And to bring all this in perspective, I will use three unrelated but instructive cases to argue my case against myself and fellow East Africans. The first case comes from my friend and erstwhile client. Not long ago, I worked for the region’s tyre manufacturer, the Nairobi-based Sameer Africa, the makers of the YANA brand of tyres. One of the key corporate accounts in Uganda is a construction firm owned by a Ugandan of Asian descent. In the course of business and casual discussions, this gentleman ‘hit’ my eye with a bitter truth that I am yet to recover from. At that time, he had been contracted by two clients whose projects were diametrically opposed: the first client was a Ugandan tycoon, whose project was a residential house whose initial estimated stood at Ush800 million (about $333,000 at the time or Rwf230 million at current rates). The second client was an Indian investor, who was setting up a food processing factory, whose civil works and machinery would cost Ush320 million ($133,000 at the time, or Rwf92 million at current rates). Running me through the figures and the potential wealth-creation capacities of both projects, he concluded: “now guys, stop accusing Indians of ‘mistreating’ Ugandans or employing their own, when you have your priorities upside-down...we are our own enemies”. As we debated further, it dawned on me that within five years, the factory constructed at one-third the cost of a residential house, would be directly employing 1,200 people along its value chain, the factory owner will have earned enough profits to construct four palatial homes, while the tycoon’s residential house will be demanding maintenance and repair costs. My curiosity and research has since led me to amazing facts: we only need cottage-level factories each costing $10,000 (Rwf6.9 million) to establish, across rural East Africa, for us to eliminate unemployment, to the point of importing labour to fill the deficit. And this leads me to the two other instructive cases: one soft drink brand in Kenya captured and established a market niche against global giants by appealing to economic patriotism …ukinywa yetu, pesa zaako zitabaki hapa kwetu…lakini ukinywa yile, zitaenda ngambo….meaning that taking the Kenyan-owned brand meant money staying home, while the foreign brand took away that money to foreign lands. A related case is that of an Indian corporate giant, was established in reaction to a foreign brand that dominates the fast-moving markets even today. When this multinational came to India, Indians saw an economic rival, so they launched their own brand and used ‘guerrilla’ marketing approach, using rural India as their base. They manufactured their soap table twice the size of the foreign one, but sold at the same price. And soon, they were at par in market share with the global company. Today, the ‘small Indian guerilla’ as they called it then, is a world phenomenon, and has diversified in many other sectors. By coincidence, the 2014 Egypt and Middle-East Expo found me in Kigali. Visiting the expo on two occasions I was put me to shame from a political economy perspective: how can desert Egypt have world-class cotton garments, an entire range of world-class leather products, while East Africa, ‘gifted by nature’ is flooded with imported mitumba and rejects? Even simple products like perfumes would mesmerise the expo-goers, gazing at how the Egyptians packed and packaged them according to each one’s need. So, as we hold forums, seminars, dialogues, workshops and talkshops, let each one us pause and pose themselves this question: as I look elegant in this suit and mushanana, carry a neck-turning cologne, how many jobs am I exporting from East Africa...and how would I create if I invested only $10,000? Hopefully, the IPAR deliberations captured these issues. The writer is a Ugandan-based commentator on EAC issues Email: bukanga@yahoo.com

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Unemployment: We are our own enemies