By Leonard Wanyama
For all the youth, women and constituency development funds allocated over the course of recent years, Micro, Small and Medium Enterprises (MSMEs) have performed dismally as an agency of sustainable development in Kenya.
Competition from cheap imports and high costs – be they of energy or other kinds – have contributed to making success difficult for many small businesses in the country.
Indeed, despite the fact that there is relative ease in the registration or starting of entrepreneurial exploits, it seems the environment makes it very difficult to maintain operations in the provision of goods and services by small entities.
According to the 2016 Basic Report on MSMEs by the Kenya National Bureau of Statistics (KNBS), 2.2 million MSMEs closed shop between 2014 and 2016. The situation was particularly critical in 2015 as MSMEs were recorded not to last beyond 3 years and 8 months.
Kenyan aspirations for the development of cottage industries are also clearly in jeopardy considering that rural areas suffered significantly from the closure of 1.2 million MSMEs over this two-year period. This is because these businesses continue to experience increased operating expenses.
Other challenges include declining incomes in light of the shape of the economy and consistent business losses over time. Unfortunately national debate, popular discourse and media coverage has continued to highlight the travails of big businesses such as Sameer, Cardbury and Eveready.
Furthermore, the problems facing Chase Bank, an institution whose business model was geared towards supporting MSMEs, were obviously the worst omen in recent times once all is said and done.
2017 is an election year, and the private sector cannot avoid participation in politics in one form or the other. Indeed politics breeds policy and so engagement with all forms of political actors is decidedly important.
Private sector has to embark on pushing an MSME agenda in conjunction with its focus on peace during this election cycle. The opportunity for this arises as political parties craft their political manifestos as Kenya heads towards campaigns.
Engaging politics in this manner will commit entities across the political divide to commit to the development of MSMEs in coming days. This is will help influence policy documents such as the next Medium Term Expenditure Framework (MTEF) and County Integrated Development Plans (CIPD), among others, so that MSMEs are properly supported to be more robust and stable.
Lobbying for the MSMEs should also explore political questions or arguments on the economy’s relations with other states, Kenyan society and its communities. Despite the existing affinities for open trade and borders, would some form or level of protectionism be acceptable?
Why are we so reliant on the findings of global indices when they don’t seem to speak of the realities faced by local traders? Could Kenyan indicators be developed to inform policy makers?
Raising these and other questions is important because as an employer of 14.9 million people, MSMEs provide the highest employment opportunities. Therefore there should be an accurate examination of the sector so as to effectively impact society in relation to development needs.
MSMEs require greater partnerships with financial institutions, government and development organisation in order to achieve the aims of uplifting people out of poverty and reducing the inequality gap.
Therefore, in urging various political entities to adopt an MSME agenda, voters with business interests may have the option of evaluating various candidacies on offer so that they can make their choices based on an informed decision.
Policy compromise
Glancing through the websites of leading private sector organisations such as the Kenya Private Sector Alliance (KEPSA), Kenya Association of Manufacturing (KAM) and the Kenya National Chamber of Commerce and Industry (KNCCI) shows a probable need for MSME think tanks.
This is important so that the subject can move from the consultancy services orientation offered by these organisations small businesses to a more focused research on policy, strategy, political economy, technology, innovation and culture through advocacy.
Political contestation offers the best time for competitive evaluation and compromise of policy as the country moves forward. Consequently, relevant stakeholders can take the opportunity to craft the desirable future within the Kenyan context of sustainable development.
The author is a development practitioner and a part time lecturer of International Relations. Follow: @lennWanyama
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