Heavy dependence on imports is our SMEs Achilles’ heel

Enterprise

Heavy dependence on imports is our SMEs Achilles’ heel

Tuesday, March 3, 2020 0:01

By MWITI KABURU |

The rapid spread of coronavirus is threatening to shutdown business operations across the world. Many airline flights have been suspended, causing logistical nightmares to businesses and countries that heavily depend on exports and imports for survival. A number of conferences, such as the World Mobile Congress scheduled to take place in Barcelona on February 24-27, have been called off.

The current challenges facing the world due to the coronavirus crisis is being acutely felt within our borders. Our economy is deeply integrated with that of the globe and anything that happens in any corner of the world is certain to be felt in our doorsteps. This is particularly the case with China, the epicentre of the virus outbreak.

Many local firms, especially Small and Medium Enterprises obtain their stock from China. Therefore, the current situation where flights to and fro China have been suspended can only mean shortage, and even lack, of essential supplies for local businesses.

Even ships docking at the Port of Mombasa have been affected, with data showing that four vessels have already failed to arrive in the Kenyan port due to the outbreak.

This points to the extent to which a serious epidemic or any other crisis occurring in any part of the world can easily ground some aspects of our economy.

This is not to say the move to halt flights is not the right one. Not at all. This virus is no child’s play as evidenced by the death and devastations wrought in China, and serious effort should be made to ensure that it doesn’t cross the borders into our country.

In fact the government needs to do more and institute serious measures to keep Kenyans safe from the scourge that even China, the second biggest economy in the world, is grappling to contain.

Given the state of our health sector that leaves a lot to be desired and an economy that is not performing too well, it would be catastrophic should the disease hit our country.

As businesses count losses, the focus should shift to how such situations could be mitigated. We have left ourselves overly exposed by relying too much on imports.

Because we have failed to provide the right incentives for our industries for them to thrive, we import even simple stuff such as tooth picks, clothes and toiletries that we should be making at home.

There is an urgent need, therefore, to develop and diversify our industries to make the country as self-reliant as possible, especially on things that we can simply muster sufficient capacity.

This move ought to be coupled with an aggressive campaign to buy Kenyan products. Although there is an ongoing campaign dubbed ‘Buy Kenya Build Kenya,’ this has not been appropriately resourced and given the serious attention it deserves so that its impact is felt.

The current balance of trade between Nairobi and Beijing, which is acutely lopsided in favour of the latter can only be addressed by teaching Kenyans to love products created by the hands of their compatriots.

The 2019 Economic Survey indicates that Kenya imports from China stood at about Sh370 billion in 2018, compared to about Sh11 billion exports. This is not acceptable.

Kenyans mostly import apparel, electronics and surgical gear among other numerous items. Most of the small traders dealing in these products are already bearing the brunt of the coronavirus outbreak.

Importers and Small Traders Association chief executive Samuel Karanja has been quoted saying their members have lost in the region of Sh30 billion since the outbreak of the virus two months ago.

This is indeed a serious outcome taking into account how many livelihoods have been wiped out in such a short period. Were the crisis to persist for several months more, it is unimaginable what it would mean for these businesses and the economy at large.

We need to find ways to reverse this state of affairs to cushion SMEs and Kenyan livelihoods from the crisis brought about by coronavirus menace.