Policies play critical role in nation’s economy

Policies play critical role in nation’s economy

The KFC brand nearly died overnight simply because of online attacks – the American fast-food giant faced a shortage of potatoes due to a delay in delivery from its overseas suppliers. The company stated it could not get them from local supply chains due to global standards issues.

Kenyans on Twitter and Facebook were not happy with the move – consequently, a push to boycott the foreign food chain began. Hash tags and posts started rolling. As the online fury continued to gain momentum, it became apparent that the bulk of posts were coming from users who were totally green about the dynamics of the formal and the informal markets, which is understandable.

KFC’s mandate is not to build the capacity of the informal suppliers. It will be expensive, and not viable in the long run, unless it’s funded. Only the government holds a central position as far as growing the domestic market is concerned. Not foreign investors.

Another thing that the online lot didn’t understand is that there are two market segments – the formal, where we place KFC, and the informal, where a market like Wakulima popularly known as Marikiti, falls. People abreast with the markets say the quantity of agricultural produce being moved in the informal markets on a daily basis is massive as local and grocery shops and restaurants are generally the target. That’s where the numbers are. What can we pick from this?

It is interesting that potato is the second most critical produce after maize. It is grown by 800,000 small-scale farmers, and generates employment for an estimated 2.5mn people along the value chain. There are also reports that potato farming contributes over Sh50bn to the country’s economy. It means Kenya’s informal suppliers amass a sizable fortune.

Through good policies and regulations, it is possible to ensure that foreign companies in some way, invest in the local market in areas such as acquisition of raw materials and skills. To grow the domestic market, an intermediary (between foreign companies and the local market) is needed. The State should do its part – the government must put in place strong policies, standards, as well as watertight regulations for the benefit of both the formal and informal suppliers.

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