I remember many years ago, a running argument we used to have with my sparring friend Dr. Kotieno. (He is a Thatcherite market fundamentalist who likes to dismiss me off as a A Stalinist prototype of European planned-economy nanny states). On this sugary point we agreed: Brazil and the EU, and even little Cuba, could project per/kilo prices of sugar on the world market which sentenced the Kenyan sugar sector had to be a baby in a couveuse --a totally sterile, artificial environment. That was when Kotieno first told me of COMESA statistics, and used them to trash the managerial acumen of Dr. Kidero, then a super CEO at Miwani-Mumias or something. Now Opanga says: Per tonne, Malawi does it ksh. 28,000, and Kenya @ ksh. 80,000. --Ululu Mayie!Fellows, in real life, in real markets, in the real economy, such a price difference is a death sentence. Too uncompetitive is Kenya, even within the COMESA, leave alone Brazil, the EU. What Opanga is not saying, is that Mauritius can still come in lower than Malawi! In other words, Kenya can produce a tonne at ksh. 80G, and Maurtius the same @ ksh. 20G! (I think we better quit O_o!]With VAT and all, a kg of sugar should be going at no more than ksh. 50! Obviously then, Western Kenya have to find something else to grow or do; --import cheap COMESA molasses for instance for ethano-chemicals; or reduce our costs of production to competitive COMESA levels. The other option is state subsidy as Opanga is calling for, to sustain the unsustainable: A continuation of protectionism as has been the case ---with high tariffs on imports which make Kenya a smuggling paradise with, yes, the political elite the main importers! In this respect, I go with Dr. Otieno and his purification rituals forced by an open market. Let the inefficient sugar industry be killed off by market forces. Or let it, privatised, re-organise itself to achieve competitive production costs and retail prices at par with other COMESA compatriots. We learn to swim or sink. Be a shark to swim with the sharks, or find another niche and be like omena. {Omena is small fish, but evolutionarily a spectacularly successful species]
Posted on: Thu, 13 Mar 2014 23:22:48 +0000
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