The media is at it again! The Kenyan Eurobond nightmare isn’t going away anytime soon. The ‘technocrats’ have come up with various explanations as to how such monies were used and this has largely cast doubt on the veracity of their conclusions. The politicians have also not been left behind, dancing to the tunes of where their allegiance lie. Having said that, it is therefore apparent that the truth will just remain elusive.
The big question we should be asking ourselves is how best would have such monies been utilized and its effects felt right down at the grassroots. My focus will be on key sectors that the government would have easily concentrated on and perhaps even borrow a leaf from other African economies that have gone ahead and implemented developmental projects that have had positive injection into their economies.
Agriculture is one such sector. It has so much potential. Kenya is known for it’s tea and coffee exports which begs the question why is it that we have so many imports of the same on the supermarket shelves? The answer lies in value addition (but that’s a write-up for another day).
My focus today will be on livestock with a bias on the leather industry. According to reports, the leather industry is a significant area for development that can boost exports and create jobs.
Kenya is the third largest livestock holder in Africa. We are sitting on a leather mine so to speak. The irony being that our market has been eroded by imports of new low-cost leather footwear from China and India. This being in the wake of the World trade in leather is growing exponentially and is estimated at USD 100 billion a year and the demand growing faster than the supply.
Kenya can then position itself to reap handsomely from the numbers and as they say numbers never lie. The Northern Frontier of the country has numerous heads of cattle and it’ll make an ideal location for one if not many leather plants. Perhaps even put an end to the cattle rustling menace that has plagued the area for years on end.
I’m sure you must be wondering then how the Eurobond plays to this sphere. The answer is simple, part of the monies would have been used to set up such a plant(s). Imagine the potential going by the number of belts adorned on peoples’ waists and wrists, handbags, wallets , shoes oh and even seats all branded Kenya. Imagine widening that market into the region and extensively into the US and European markets.
It is not rocket science if you ask me. Designers will be proud to bear that title because they’ll need to come up with designs for the mentioned pieces. Employment would have been created across board for both skilled and non-skilled individuals just from one virgin industry that can generate quite a huge pool of foreign exchange.
Another area of interest would be the energy sector. Kenya is indeed making strides in growing the renewable energy which stands at 60%. An area that has not been fully exploited is the solar energy which is largely free. How then can it be harnessed. I’ll use the example of Morocco and Rwanda.
Rwanda has invested in solar power in fact the very first utility scale solar energy in the whole of East Africa. It is an 8.5 MW solar project at the Agahozo-Shalom youth village constructed at a cost of USD 23.7 million. This power alone has the potential to be supplied in 15000 homes.
Morocco on the other hand is a country that experiences sunshine throughout the year. Ironically, it is the largest energy importer from the Middle East and depends heavily on foreign sources for over 97% of its energy. It’s however not gloom and doom for this country as the city of Ouarzazate has rolled out a solar power project. It is going to be amongst the largest solar power producers in the world.
This project is bound to be complete by 2020 and it will have power capacity to the tune of 200 MW. This energy will be for the consumption of up to one million Moroccans with a possibility of exporting to Europe. This then goes a long way in reducing its dependence on fossil fuel by 2.5 million tonnes.
The above examples show just how much of the free energy has remained untapped. Kenya being a net importer and more so fossil fuel taking up a huge chunk of the import bill then the government should look for alternatives to fossil fuel. Solar would be a good bet especially in the Northern Frontier of the country. This will go a long way in opening up these areas and marginalization will be a thing of the past. Who knows this energy can be used to power the leather plants.
I hope the insight is helpful in understanding the impact that the Eurobond would have had if it were tangibly used.
Image courtesy of http://qz.com