Tuesday, June 17, 2014

Second-hand shit.

Mitumbas are a bad, bad sign. There used to be the Kisumu Cotton Mills (KICOMI) and the Rift Valley Textiles (RIVATEX). Now what we have are fat-walletted entrepreneurs who have made  killing by importing used or already-worn clothes for a demanding market. The market exists because the market for quality, home-made textiles or clothing does not exist. Not any more. The alternative explanation is more painful: the capacity for the market to purchase quality, home-made textiles or clothing is substantially below the global average that it can only sustain itself by purchasing already-worn and used clothes.

This seems to be the case for motor vehicles: cars and commercial vehicles, mostly. CMC Motors, before it's sale to a Dubai car -dealer, sold 1,082 cars in 2013. The numbers from DT Dobie, Bavaria Motors, RMA Kenya, Marshalls East Africa or Toyota Kenya are not much better. The market for brand new motor vehicles in Kenya on a month-by-month basis is small, less than 3,500 motor vehicles. But Nairobi alone witnesses more than 300 new registrations every month, the bulk of which are reconditioned and used motor vehicles. The some phenomenon regarding clothing seems at play regarding motor vehicles: new buyers have been priced out of the new car market.

This is the dirty little secret of the Kenyan economy. It can only sustain a tiny elite. The bulk of employees and entrepreneurs barely make enough to survive. Hass Consult, a real estate developer, has found that even the proper middle class can barely afford the mortgages offered by commercial banks. We have become a second-hand-goods-based economy. In the short term, that was not such a bad thing in the madness of 1992 to 1995 period when the economy turned to shit. But carrying on in the same vein for twenty years, it is almost certain that we passed the tipping point a while back and barrelled on without a second thought.

It wouldn't be that bad if the government did not get in on the act. When Alfred Mutua justified the purchase of vehicles for his county executive n the basis that they were second-hand cars that would give value for money, it was the first time that we admitted to ourselves that we are at the point of giving up. This is the same sense you get when Football Kenya or FKF or whoever is in charge of the national team cannot afford the ten million shillings President Kenyatta "donated" to send the Harambee Stars to Brazil to watch the World Cup or the approximately 327 billion we will spend to lay a standard gauge railway between Mombasa and Nairobi that will increase average speeds by 40% using rolling stock that is at least three generations behind and which will raise he overall long term national debt by at least 15% and end up being one of the biggest and surest ways to corruptly acquired wealth for an elite few that we will ever see.

We are no longer thinking of grand innovation projects. This blogger is not calling for import substitution techniques that failed in India, for example, but isn't it time we stopped being the importers of the world's trash? Bidco, Keroche Breweries, Farmers' Choice and Brookeside show that with determination (and a little political connecting here and there) we are competitive. The industrialisation, commerce, international trade and education Cabinet Secretaries better see this too, style up and stop us looking like we enjoy taking home shit others threw out!

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