We have to place agriculture at the centre of MSMEs

Ever since President Uhuru Kenyatta discarded his official speech at last week’s Strathmore University conference, micro, small and medium-sized enterprises (MSMEs) have dominated media debate.

Coincidentally, a couple of colleagues called me on Friday (the day after that conference) to admonish me about not stating clearly in my last piece that the “Big Four” might be a “Big Hoax”. These are MSME advisors, investors and actors.

Intrigued, I sought their further views as regular attendees of these jolly jamborees we call meetings, conferences and field trips. Here are a couple of thoughts they shared.

First, Big Four sounds more political mantra than a real plan. Second, these meetings avoid specific discourse on business/institutional constraints and investment/support opportunities around food security, health care, housing or jobs, focusing instead on enablers (read, infrastructure, hardware et al).

This is the private sector wondering how and where counties fit into the national MSME agenda. They are aware that every single county is creating its own county-specific MSME-support fund.

They also ask about primary (preventive) health care, through clean water for people (living conditions) and early vaccination or healthy diets (lifestyles), as the cornerstones of universal health care.

We spoke about agriculture using maize as our food security proxy. Essentially, what happens to this year’s record production, by farmers, after last year’s record importation, by traders? Food for thought.

On the next day - Mashujaa Day - President Kenyatta was forthright on the need to resolve recent agro-scandals around farmer payments. So let’s briefly go back to maize.

Until the data is tortured into submission, forget the convoluted public arithmetic we are hearing about farm sizes and yields that can’t exist, transport logistics that would shut down Kenya, prices beyond belief and tax losses that could have financed 2018 public school exam fees for every child in Kenya.

Consider instead, a dystopian moment in which we’re currently “food secure” (by quantity), but “food unsafe” (by quality, with stocks rotting in NCPB stores and farmers’ barns, as well as unharvested crop).

Then think that the only way to get the recent farmers’ harvest into stocks is to sell older, imported stocks to millers at prices below relief. We either lose money, or we lose lives.

Which begs the question, aren’t farmers also MSMEs? Are manufacturing MSMEs the only ones we take seriously? Even when we step beyond maize, isn’t the Big Four Plan, from the limited information available, premised on the creation of 1,000 agro-processing MSMEs that will contribute half of manufacturing GDP by 2022 (up from 16 per cent today)? Answers on the end of a maize cob, please!

On one TV discussion this week an important point was made - think about MSMEs not as a separate sector, but as a younger part of our “big-picture” agriculture-industry-services based economy.

In other words, we’re not moving forward until we view agriculture in MSME context; call it “smallholder agriculture”. Consider services in MSME context too, and refer back to a useful April 2018 MSME policy brief put together by KNCCI, Strathmore Business School and the Kenya Business Guide think-tank that tells us that 60 per cent of these enterprises are service-driven, with the rest engaged in, to quote, “wholesale and retail trade, (and) repair of motor vehicles and motor cycles”.

Agriculture, anyone? Licensed and unlicensed; formal and informal? Sure, licensing is not formality.

OECD estimates for 2017 suggest that in high-income countries, MSMEs account for 70 per cent of private sector employment and generate between 50 and 60 per cent of GDP. In emerging and developing countries, the equivalent estimates are one third of GDP and 34 to 52 per cent of jobs.

In Kenya? A third of GDP from 78 per cent of all private sector jobs. What’s wrong with this picture?

Here’s another “anger test”. As the backbone of the economy, what’s the proportion of MSME representation on Sunday’s business-touted inaugural KQ Nairobi-New York (NBO-NYC) flight?

Answer on the back of your boarding pass, please!

In describing Kenya as a “democratic development(al)” state, the 2013 Report of the Presidential Task Force on Parastatal Reforms quotes from a 2005 concept paper by Edigheji Omamo, thus “(this is a state) that not only embodies the principles of electoral democracy, (and) ensures citizens’ participation in development and governance processes, but also fosters economic growth and development through the transformation of a nation’s economic base by promoting productive, income generating economic activities aimed at improving the welfare of the population”.

Great national and county leaders of Kenya, these are your basic terms of reference. Anger isn’t.