What you need to know:
- Unemployment here is at a crisis level and many young men leave home in search of jobs outside of Bungoma distorting the male-female balance in ages between 20 and 30 (see population structure in Open Data).
- Kenya Railway was weakened through asset stripping that eventually brought down the mammoth enterprise to its knees. The infrastructure and the rolling stock were then privatised.
- Bungoma has an advantage over other counties in its ability to develop a large service sector around links to neighbouring countries. The market in Central Africa is big and will remain so for the next two decades
It was difficult to watch NTV's prime time news on Sunday, September 6, 2015.
There was a heart-wrenching item about how young people in Bungoma are literally killing themselves with disappointment. Many have died under mysterious circumstances in deaths linked to the boda boda sector in the region.
Although the people of Bungoma are seeking solutions from the state, the problem is far greater than just arresting perpetrators of crime.
As many of the interviewees in the documentary insinuated, these murders expose the ugly side of capitalism. The solution, therefore, lies in economics.
When the government introduced incentives to enable young people to buy motorcycles as a strategy to combat increasing youth unemployment, no one could have predicted that this transport sub-sector would grow to become the menace it has become.
The initial investors were genuinely young, unemployed youth. Their businesses were profitable.
Things changed when unscrupulous people realised there was money to be made in motorcycles. The current investors are not the youth but well-to-do businessmen, who lease motorcycles to the youth and expect fixed returns every evening.
This has intensified competition in a shrinking market size. The matatu madness has spread to the boda boda sector. It is not far-fetched to say that the sector has attracted Mungiki, Chinkororo and Musubiji graduates – with horrific consequences.
There are even unconfirmed reports that in some areas, the boda boda sector is firmly in the hands of cartels that are linked to money laundering in the country.
There is sufficient evidence that our transport sector has been infiltrated by criminals. Operators are a law unto themselves, and there are many acts of criminality that have been reported.
The main cause is the intensification of competition and lack of expanded opportunities to absorb the increasing youths getting into the trade.
A more sustainable solution is market expansion and regulation, but, this unfortunately, is not what the ensuing discourse is all about.
Soon, we shall see an expensive solution that does not address the core problem, just like we saw with the Kenya Railways and investors in the trucking industry.
Kenya Railways was originally known as Uganda Railway and was transformed into the East African Railways and Harbours Corporation (EARC) after World War I. After the breakup of the East African Community, it changed its name to Kenya Railways.
It was the main transporter of goods from coastal area into Kenya and Uganda. There were very few trucking companies that provided an alternative to rail services. Both were profitable, but new investments in the trucking industry in the early 1980’s intensified competition. This led to massive sabotage of the rail services, to the benefit of truckers.
OUR EXPENSIVE RAILWAY
The ideal solution to a problem like that would have been to separate the rolling stock from the rail infrastructure and create open access to the rail line. Truckers could then be expected to invest in rolling stock and transport goods into the hinterland. This did not happen.
Instead, Kenya Railways was weakened through asset stripping that eventually brought down the mammoth enterprise to its knees. The infrastructure and the rolling stock were then privatised.
To date, the cost of transporting goods from Mombasa to Nairobi remains exorbitantly high. Indeed, it is cheaper to transport a container from Durban, which is more than 2,000km away, to Mombasa than from Mombasa to Nairobi, which is 450 km away.
The economic costs have never been computed but the solution continues to make the country uncompetitive even to date.
A careful review of the 2009 census (Open Data Kenya) data reveals some of the possible causes of the tragedy in the county. Bungoma has a population of about 1.6 million people and measures about 852square miles or 2,205.9 square kilometres (before the addition of the Mt Elgon District) with a population density of 455 people per square kilometre.
More than 80 per cent of Bungoma residents live in rural areas, compared with the national average of 68 per cent. Per capita county expenditure was highest in Kimilili, Kanduyi, Sirisia, and Webuye (before it was split into Eat and West). Although Mt Elgon and Bumula are disadvantaged with poorer soil fertility, per capita spending was much lower.
70 PER CENT BELOW 30
Large parts of Bungoma, especially Kimilili, Cheptais and Sirisia, which have reddish-brown soils, have a high potential for maize farming but have high post-harvest losses.
Production is affected by excessive land subdivision, so much so that 10 acres are referred to as large-scale farming. Although other divisions have potential for agriculture, they require more inputs such as fertilizer to attain optimal output.
As a result, the poverty level index hovers around 53 per cent, with an age dependency ratio of 93.8. More than 70 per cent of the population are aged below 30.
Unemployment here is at a crisis level and many young men leave home in search of jobs outside of Bungoma, distorting the male-female balance in ages between 20 and 30 (see population structure in Open Data).
Bungoma is endowed with two main link roads, that is, the Webuye-Bungoma-Malaba road and the Webuye-Kitale highway that make the county the gateway into Uganda, Rwanda, Burundi, the Democratic Republic of Congo and South Sudan.
The Kenya-Uganda railway runs through the county. Bungoma also has well-paved roads linking all the divisions but lack of information has hindered economic expansion to address some of the crippling unemployment problems.
With a little ingenuity, we could leverage existing infrastructure to create a rural courier services to convert post-harvest losses into an economic opportunity by taking it to the market place on time.
A new local mobile application, Sendy, which uses a Global Positioning System (GPS) transponder on a motorcycle to create a seamless home delivery digital network throughout the country, could be used to improve the fortunes of Bungoma's residents. Home delivery is the fastest-growing business due to growing e-commerce in Africa.
The more than 17,000 motorbikes in Bungoma could be used to fish out all commodities from rural Bungoma and push them into the urban markets. Indeed most of the eggs sold in Kisumu are imported from Uganda, which neighbours Bungoma.
Bungoma is also a spitting distance away from other important cities such as Eldoret, Kampala, and even Nakuru, and has the potential to export to Juba now that a tarmac road is being constructed. In Congo, chicken eggs are imported from France at $4 each, yet Bungoma sits right on the highways into Congo.
Instead of buying inflated wheelbarrows, the county administration should be making more trips to Rwanda, Burundi and Congo to establish new markets. Creating such market would lead to a more motivated community that can produce more and become an attractive investment opportunity to the youth.
Throughout the country, wananchi don’t see these opportunities. Our rural folks, although hard-working, generally lack vital information on markets. This is the major cause of poverty.
WHAT COUNTIES CAN DO
The county governments must create a forum for discussing opportunities; streamline the supply chain so that when the produce is ready, the market is there. Build value-adding cottage industries. Assist farmers to learn how to delay consumption of produce, for example, build cold storage facilities to store fish when harvested.
Spread opportunities across the demographic character of the county while paying more attention on gender equity. Negotiate with the banks to be part of the solution by providing credit that is recovered at various points of the supply chain.
More importantly, develop a standard entrepreneurship program to train the youth and make them see opportunities in their localities.
Whenever we have famine in the country, you find that there is sufficient food in some parts of the country. This food is unable to move to high demand areas, meaning that our famine is really self-induced.
It is about time that the Council of Governors considered creating market linkages between the counties to deal with such a problem. While the North Rift has a competitive advantage in maize production, Makueni has a competitive advantage in the production of oranges.
If Governors created even a rudimentary commodities exchange forum and contracted a national courier service, there will be plentiful markets for every commodity in Kenya. With Bungoma’s strategic position, it could become the gateway into landlocked countries of Eastern and Central Africa.
WHY IMPORT WHEAT?
The Council of Governors' offices in Nairobi should act as the liaison office for market development. The office should build massive data on each county and make it easier for the investors to make investment decisions.
It is where the story of Turkana must be told, that there is sufficient water as well as land to grow wheat, and that there is ready market, considering the fact that the country continues to import wheat.
Index Mundi shows that Kenya’s domestic wheat consumption shot up from 671 thousand metric tons in 2003 to 1.850 million metric tons in 2014 compared to local production of 415 thousand metric tons (in 2011 and is in decline).
The tragedy is that even though 80 per cent of Kenyans are involved in agricultural production, there is no food crop produced in Kenya that satisfies the market. This is due to the fact that we rely on archaic methods of agriculture.
This is why I propose that Bungoma embark on a new land tenure system and an aggressive urbanisation program. The small, uneconomic land units need to be consolidated for profitable agriculture and the people encouraged to live in urban areas.
EXPORT TO CENTRAL AFRICA
The county has the advantage over other counties to develop a large service sector around its links to neighbouring countries. The market in Central Africa is big and will remain so for the next two decades.
If Bungoma wants to become the Luxembourg of the region, well, it can, but there must be the necessary will to do that.
Nationally, we must begin to leverage presidential trips abroad to create opportunity. The recent visit by the President to Uganda is one such example where discussions centred on trade. I would want to see Bungoma lead the way in rearing productive livestock that gives more milk for export to Central Africa.
Today, all of Bungoma is littered with useless breeds of animals that eat as much as productive breeds but give only a litre of milk per day.
When land size becomes small, we must look at ways of greater productivity and this is exactly what farmers in Kiambu have done. We still import cheese meaning that there is more room for growth in the dairy sector.
AMBASSADORS MUST PERFORM
Furthermore, we need to create a performance contract for all ambassadors of Kenya based on how much of Kenyan products penetrate in the countries they serve.
Every time ambassadors are in Kenya, they should be speaking at county investment fora throughout the country, to create visibility on the opportunities that exist out there.
It must be mandatory for MCAs and administration officials to attend such fora and for each one of them to disseminate the same to their areas. This is how we can reduce the information asymmetry that is the major cause of poverty in Kenya.
We may be doing some things right but with a little more creativity we can change our country for the better by creating a more open society that is innovative and collaborative. To achieve this, we must have the confidence to generate new ideas and be part of global innovation systems.
We are best placed to solve our problems and propel ourselves into the global stage through scaling our solutions. Let us start with Bungoma.
The writer is an Associate Professor at University of Nairobi’s Business School. Twitter: @bantigito