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Will Uganda and Tanzania’s rebounding economies soon overtake Kenya’s?

Discussion in 'Kenyan News and Politics' started by Smatta, Mar 2, 2010.

  1. Smatta

    Smatta JF-Expert Member

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    By XN Iraki

    In the last 10 years, economic growth in Kenya has averaged 3.8 per cent, Tanzania 6.1 per cent, Uganda 7.2 percent, Rwanda 7.5 per cent and Burundi 2 .5 per cent. The correspondent Gross Domestic Products (GDPs) in billions of dollars were as follows in 2008; Kenya 62.4, Tanzania 55, Uganda 41, Rwanda 9.9 and Burundi 3.2, according to data from the World Bank.

    Clearly, excluding Burundi, the other three East African countries have grown at almost double Kenya's rate. Looking at the size of the GDPs, Tanzania (TZ) is not far. It might not therefore be an exaggeration to suggest that some of these countries will soon catch up with Kenya economically, particularly Uganda and Tanzania.

    But what can Kenya do to maintain her lead, her competitive edge?

    A simple back of the envelope calculation shows that if things remain as they are, TZ will catch up with Kenya in about 6 years, UG in 14 years, Rwanda in about 50 years and Burundi much longer.
    Some could argue that is not an issue since Tanzania and Uganda are part of the East African Community (EAC) and any growth there will trickle down to Kenya because of demand for her exports. Others point out that part of these two countries' growth is Kenya's efforts through investment there. Whatever the truth, Kenya cannot afford to blunt her competitive edge.

    How are the other nations' competitiveness compared to Kenya?

    For Uganda (UG), the prospects of oil will buoy up her economic prospects, and, some suggest, self-confidence. She has more arable land and has learnt the hard lessons of misgovernance. The revival of Kingdoms was an ingenious way to disperse political emotions from the centre. Those who have been to Uganda appreciate it as a welcoming nation, unencumbered by attitudes. The country seems to appreciate the role of investors and entrepreneurs quite well.

    There are lots of parallels between the welcoming nature of Uganda and the US. American welcome is based on capitalism and economic prospects, Uganda's is more cultural; an "invisible force" makes you feel at home. Uganda's soft underbelly is political, the uncertainty beyond President Museveni whose longevity in power could coalesce the political dynamism needed to spur economic growth.

    For Tanzania, it is her mineral resources, availability of land and its strategic coastline. Most of Tanzanian resources are unexploited, and a huge potential remains. The legacy of ujamaa is a handicap in Tanzania's quest to grow her economy. However, Dr Julius Nyerere's ujamaa policy has a positive part. It unified the country and killed any political problem, a position that led to peace and stability and lots of respect in the international circles. So, TZ has only an economic problem to solve.

    While TZ has lots of economic potential, she must set herself free to be at ease with her neighbours particularly Kenya.

    I find myself more at home in UG than in TZ, though geographically TZ is closer.

    What of Kenya?

    Our advantage emanates from services, where Kenya seems to make up for her lack of minerals. This is based on her westernised, well-educated and confident workforce. Our neighbours interpret that confidence as arrogance.

    Our location with a coastline is also a strength, which we have not fully exploited. Despite our head start in services and position in the international arena, Kenya has not fully defined her economic and political strategic objectives, since we are too mired in our internal contradictions.

    While UG and TZ seem to have its "core owners," Kenya has none, with nationalism diluted by tribalism. This lack of nationalism has disallowed Kenya from taking advantage of her strategic location.

    Internecine quarrels among the elites have dampened national optimism, leading to the current political squabbles that help no one. Maybe a new order will end the political paralysis that holds the nation hostage to economic progress. Our dependency on the international community to sort out our domestic matters is injurious to the national psyche and self-confidence.

    Kenya is rich in ideas and skepticism, but poor in doers. We are sceptical about achieving a growth rate of 10 per cent towards achieving Vision 2030, yet at early 1970s, we reached a growth rate of 17 per cent.

    Where do we go from here?

    The revival of the East African Community was the best thing that has happened to the region in the last 50 years. We can always ask where we would be if the East African Community (EAC) had not collapsed. Through it, we can bargain better in international trade, and attract more investors and tourists.

    However, my position is that the EAC would be more vibrant and progressive if we start focusing on our common strengths, which are regional based.

    Regions have competitive advantages that need to be reinforced. If we try to do everything, we end up doing nothing.

    The EAC should move together, united by her common heritage from Swahili to low standards of living. Why can't EAC finally become the Swahili Republic? EAC needs some branding.

    By allowing free movement of people, goods and services, we can unlock the economic potential of East Africans, before calling outsiders to supplement us. Domestic investors might have a bigger stake and deeper roots than foreign investors.

    By roping in Rwanda and Burundi, the EAC showed the world they are serious.
    They should bring in more countries. I have DR Congo, Somali and Ethiopia. Maybe that could pacify Somali faster?

    We cannot afford to be left behind as the rest of the World forms trading blocs and economic communities that could lock us out of great fortunes. Kenya should lead the way, by being more global in her economic and political perspectives, and not injuring herself with age-old tribal feuds that belong to a bygone age.

    Kenya should prove her economic leadership in this region by growing faster, and pulling her EAC partners along. That is what it means to be an engine of economic growth. Clearly, the 130 million citizens of the EAC deserve better economic prospects-in their lifetime.

    http://www.standardmedia.co.ke/InsidePage.php?id=2000004554&cid=497&story=Will%20Uganda%20and%20Tanzania%E2%80%99s%20rebounding%20economies%20soon%20overtake%20Kenya%E2%80%99s?
     
  2. MwanaFalsafa1

    MwanaFalsafa1 JF-Expert Member

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    I think Kenya should look at a broader sense now. Every day it prides itself of supposedly being East Africa's most advanced nation. That is all well & good. If they feel they ave conqured East Africa why not start comparing itself to the rest of Africa or to the world even? It is like East Africa has become a confort zone for Kenya.

    About Tanzania & Uganda catching up with Kenya, I mst say Kenya has not been far to begin with. Statistics & data in East African countries like most is incomplete. This is because we don't keep that much data & statistics to begin with. What we have is usually what foreigners tell us to do. I'm not saying there data is complety bogars but it does not paint a complete picture of the reality.

    Basing economy as a development factor alone is wrong. That is why when development indexes are released, you hardly see America which has the biggest economy top the list. You will usually find Scandinavian countries topping the list.

    Anyway congrats to Kenya for being the largest economy in East Africa. Not that the competition is stiff in itself for Kenya to be admired or seen as an example. I think we East Africans have a long way to go. I honestly doubt any one who is outside East Africa sees any difference between the countries of our region. Kenya should be careful to paride itself as the best among what can be seen as one of the poorest regions in the poorest continent.
     
  3. Smatta

    Smatta JF-Expert Member

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    wow, talk about getting things out of context.
     
  4. Injinia

    Injinia JF-Expert Member

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    Smatta, mbona mi sioni how MwanaF1's comment is out of context? What this Iraki guy is saying is true, but so is what MwanaF1 says.

    Au jaribu kumsoma tena?
     
  5. n

    nomasana JF-Expert Member

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    kenya is the economic hub of east africa. that is not bragging. that is stating a fact. it is like saying that TZ is the most politically mature and peaceful nation in east a frica. that is not bragging it is stating a fact. so i dont understand why some of you here get so riled up when someone states kenya's economic superiority in the region.

    as a kenyan i welcome tanzania and uganda's competition. i believe kneyans thrive in competition while others survive in competition.

    competition is good for the region.

    plus if UG and TZ economies become bigger than kenya that would mean that the region as a whole is doing good which can only be good. when malysia, singapore indonesia and thailand economies started competing it resulted in a south east asia economic prosperity. so i believe stiff competition in the region can do alot of good. but, hey! i am not an economic expert.
     
  6. Juma Contena

    Juma Contena JF-Expert Member

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    I do side with ur argument on this one.

    Nevertheless with the right policies Tanzania will overtake kenya and be the leading economy in the region. With all due respect Kenya produces nothing currently that is beyond Tanzania capabilities.

    All those manufacturing comparative advantage that Kenya praises its self for, and being the leader in the region can be accomplished and matched by both of its EAC borderline neighbours.

    Besides the two countries uganda and tz have a huge potential in producing the neccessary raw material of its industries. That is if they choose to be serious in improving there positions economically, where by kenya is at the dead end of its land exploitation.

    Unless kenyans move to innovation i do not see kenya being the leading market force for long.
     
  7. N

    Namtih58 JF-Expert Member

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    Personaly I believe there is nothing that is beyond any country's capabilities. It is the misplaced belief of a people that keeps them constrained in a mindset that propagates a sense of inferiority complex. Most notably our leaders (In Afrika). They have been brainwashed into believing that we do not have the capacity to manufacture/produce and thus need to import. Case and point COFFEE.

    There is nothing that Afrika lacks. Afrika by itself i a huge market, but as long as we remain fragmented we will not be able to capitalise on this. Afrika has just about all kinds of raw materials needed in manufacturing, but again our fractured nature and distrust/hate/envy means that we would rather export to non-Afrikan coutries that work with our neighbors.

    As long as we remain fragmented and marginalized our markets will never drive the demand that is necessary to spur the kind of growth that we so desperately need.

    Maybe its time for us as Afrikans to start reaching out at our neighbors for their strengths and leverage them for the good of Afrika as a whole. If ever there was something so clear is that the rest of the world is only willing to help us as long as we are a dumping ground for their goods and a source for the raw materials they need for their industries.

    Development will come to Afrika when we start exporting finished goods and not raw materials.
     
  8. Juma Contena

    Juma Contena JF-Expert Member

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    Again another thoughtful and constructive persepective, however people are not brainwashed easily unless they lack understanding or we both have come to accept your argument that our leaders, of having inferiority mindset.

    Based on your argument and i have to say i totally agree, wich also clarifies Africa is still being led by coward leaders who lack self confidence and the belief that, it is possible to do it on our own.

    The one thing that i think your falling into is the Western trap, the belief that we have to patner the west inorder to prosper.

    This is one argument i do not believe , it will always favour them in them long run, reason being as long as we trade with the west or outsiders for that matter there are always going to be conditions that favours them and hurt us.

    With them knowing our micro market (meant nationally), is yet to demand our full produces due to poverty level and over ambitous thinking. They understand we need them to support our produces. This demonstrates Africa to date is only catering for a niche market a majority in good salaries or those who are supported with the life style of corruption.

    The rest are those normal africans that they benchmark continentaly of being 1dollar daily survivors.

    My point here is africa can afford to loose some income, but along the way lower its inflation and improved its peoples lives. If it concentrated in the local market and produced scholars to innovate for our own.

    We can not keep going with the belief that we alway need the west for a big brother. While we keep believing outsiders are fighting for that role as you can see with the chinese now.

    We have much to accomplish, and we need to prove to ourselves than outsiders currently.
     
  9. Abdulhalim

    Abdulhalim JF-Expert Member

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    Watu wengi hawataki kutazama ukweli kwamba uchumi unaotegemea masoko, ni kama DECI. Unaegemea ktk assumption kwamba ili humanity kuweza ku-prosper there should be infinity resources kwa ajili ya everyone greedy. Yaani kufikia kila mtu kuishi vizuri kutoka NYC, Dhaka, London mpaka Manzese, inabidi kuwe na excess somewhere ili huyu mtu aeze kuwa na kipato comfortable kitakachoweza kumfanya aishi vile anavyotaka. Kulazimisha kila mtu anachohodhi kiwe na excess value manake inabidi kuwepo na infinitively amounts of resources. Na kaa inavojulikana hakuna limit ya greedy.

    Unfortunately we all know resources ktk dunia zipo fixed. Most of us ignore this facts. Sasa kama hatuezi ku-guarantee kuwa at the end of the day hakuna mechanism ya ku-ensure a common mwananchi anafaidika kwa sababu ya Economic Break Point ambayo ni evident, ni wazi tunakwepa maswali magumu. Whatever happens kwenye GDP ni indicators za vitabu zaidi na with time vizazi vijavyovitatucheka tulivokuwa wapumbavu by knocking ourselves down intentionally.
     
  10. bona

    bona JF-Expert Member

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    lets being fooled by figures, in what ground the economy is measured? is it the right way to measure that way? what does kenya have to say they are far from others? to me kenya is the most impoverished nations of all ea countries, arent they the kenyans who are desperate even to get basic need likke food? situation is much worse to the extent relief food is being supplied in most part of kenya? bhow about crime rate, isnt that an indication of more poor people with no source of income? how about kenyans storming tanzanians village with powerful war assaults riffles like AK 47's to steal grains and cattle, isnt that an indication of hunger, will you find tanzanian storming into another country to steal food? we have plenty! how about kenyans being desperate to join the federation to get some breathing space interms of job and land! the so called famous economy of kenya is basically owned by foreigners so the kenyans are left with some figures to be proud about while they have nothing to do with it!
    the true economy should be measured against well being of the people not some riduculous figures like GDP etc
     
  11. MwanaFalsafa1

    MwanaFalsafa1 JF-Expert Member

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    Truth is that economic development is subject to European standards. Meaning the closer you are to their lifestyle the more "developed" you are.
     
  12. N

    Namtih58 JF-Expert Member

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    I have to say I agree with you except the one point. I did not mean to infer that we have to partner with the west in order to prosper. I believe I made this two points to counter that mentality.

    "Afrika by itself i a huge market, but as long as we remain fragmented we will not be able to capitalise on this.

    As long as we remain fragmented and marginalized our markets will never drive the demand that is necessary to spur the kind of growth that we so desperately need.
    "

    This can clearly be demonstrated just by looking at the hotel business in Afrika, they market to the "foreign tourist", who is only available for so many days a year.

    They forget that the local mwananchi can be made into a perpetual "local tourist" who they can market to all year round, year after year.
    this mindset that only a foreigner can bring in money has them crying out every year, when the "foreign tourist" season is over, about how empty the hotels are. They forget that compared to the number of locals who could patronise their establishment the "foreign tourist" population is just a drop in the bucket.

    Afrika on its own is market that is at the moment insatiable. There are great opportunities to be had, if only the right policies are implemented and the common man does his/her part to educate/uplift each other.

    The older generation must also understand that times are changing and some of them wamepitwa na wakati. I remember a commedian joking that when they were children they were told that they were going to the leaders of tommorow, now they are telling their children the same thing but the leaders are the same people from their childhood.

    It is sad when one group of people holds power for more than one generation, how do we expect them to keep up with the changing times, how do we expect them to formulate policies that current and dynamic.

    Until our way of thinking changes, the few of us shall continue to cry and complain till we die, then leave the crying and complaining to our children.
     
  13. Juma Contena

    Juma Contena JF-Expert Member

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    Bro Namith,
    Again ur reading to me the right notes from my school of thoughts.

    However with regards to your concerns in our disjoint economic programmes, I have to say im yet to absorb and embrace the idea fully. Though I believe in it and our way forward for an African development. Nevertheless i think countries should begin the assimilation process through stages.

    My argument is based on reality, our economies can be compared to ‘headless chickens' currently we are just sailing without captains only guided with winds directions.

    We have figures of our GDP's that vary widely from source to source. And even those figures are largely based on exports rather than our internal market contribution to it. African nations need to begin with solving their internal affairs before doing anything clever or stupid for that matter.

    As with your hotel dillema, i think the standard of looking was too high in comparable with our current situation. Remember an average African is yet to afford many supermarket items let alone sleep on a hotel. And these are products that are produced and processed not far from his backyard, goes back to my argument Africa only caters for a niche market. We have yet to concentate on internal economic development seriously.

    With that in mind, this is why i argue Africa first need to sort its internal systems, it does not require much for us to do it. Once we deal with our politics, it would allow us to prepare the right policies for internal developments. It would give an indication of our strengths' and weaknesses, from there we would know how we need each others for us to move forward as a group. That would allow us to import the right neccesities i.e scholars from our neighbours, raw material, expertise and man power or even looking for responsible loans.

    Not the kind of Union they want to bring about currently Tz, which has not even tapped its citizens potentials nor curb its corruption problems. And now they want to put us in another mess. With the right arrangements and programmes we can begin the Union but each as to look what do we need first.

    Even Kenya has its internal share of problems to resolve, example why is Kenya so desperate to export its goods when many ordinary Kenyans are yet to afford them. Or what percentage of home produce should be allowed to go west when Kenya has regions that starvation is a common occurance.

    We should stop this greedy nonsense, look at our problems and come up with right policies based on improving our economics for the long run and permanent basis, rather than quick fix by outwitting each others for the short term due to the ignorance. That is just a white man way of thinking because he is only a user for the benefit of his citizens 5000miles away from EAC.
     
  14. N

    Namtih58 JF-Expert Member

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    Like your analogy.




    I agree with you, however my point is not to avail products that everyone can afford. That is a feat yet to be achieved anywhere in the world. The point is, even when catering for the niche market, you stand a to get a lot more customers for longer periods of time locally than relying on foreigners.

    Even in western nations they market to their own populations because they have realized the opportunity.



    We do not need to integrate to advance our economies, we just to realise that we have a large enough market in Afrika and formulate policies that will enable businesses access the said market.
    Realise that even with integration without the right policies we are headed no where.
     
  15. Juma Contena

    Juma Contena JF-Expert Member

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    I think we are talking the same language just different words, again i do see where ur coming from. The trouble with africans in relation to the 'hotel dilllema', first you have to remember we africans haven't got the habits/routines of visiting our own tourists attraction and our heritage sites in masses.

    Our holidays are spent differently as a result most hospitality firms aim at the high end of the market in the form of an average european, and the marketing is much concentraded at oversees.

    Few Kenyans have ever bothered to go see a lion in 'Masai Mara' and the need to do so, let alone an african planning to holiday in another African country apart from SA or Egypt. There are many reasons for that such as income, interest and our marketing concentration to name a few.

    We have to remember things just dont happen they are made to happen, this is why my argument has been we have to sort our politics first and every thing else will follow. Currently Africa has enough young educated people to take us to the next level of the development, too bad it would be impossible to move forward or exploit our ideas as useful as your one with bad politics as a norm in Africa.
     
  16. Waberoya

    Waberoya JF-Expert Member

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    Now 1Ksh=17Tsh
    1Ksh=10Naira

    From currency point of view, Kenya's economy is higher than Nigeria!(????)

    Kenya are doing better, I dont get it why and how, somebody help!
     
  17. N

    Namtih58 JF-Expert Member

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    I do not think you can use a countries currency exchange rate by itself to determine a country's overall standing when it comes to development.

    For one the rate is determined by that currency's demand in the country you are comparing it to.

    That countries foreign currency reserve also affects the rate.

    The country's own artificial valuation/devaluation also plays a role case and point China vs US.

    Export vs import which ties back to the foreign reserve e.t.c.

    In my opinion you cannot judge a nation by their currency exchange rate only, even though it is one of the indicators, it is by no means the only indicator.
     
  18. N

    Namtih58 JF-Expert Member

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    Read "Few Afrikans patronise their own tourist resorts"

    Totaly agree, but look at the other side of the coin, most of these places are priced for foreigners, the greed in within us says we would rather have empty beds in a hotel rather than male lower profits, we would rather have food rot in the kitchen rather that sell it at an affordable price.

    Which of the so called developed nations that we so much want to emulate has two sides in their hotels, one for the locals and one for foreigners, tunajibagua sisi wenyewe.
    You find that the "foreigner" side has better service, cleaner, more courteous servers, while on the local side utadhani ulimtukama mhudumu ukasahau kumuomba msamaha, they act like they are doing you a favor, then they have the audacity to be angry when locals do not leave a tip.

    Is this no a furtherance of the colonial mentality. Is this not why many locals view the mzungu, mwarabu, mhindi, mgiriki e.t.c as superior, I mean if our own institutions encourage the mentality why should we blame the mwananchi.

    [you can tell I have had a few encounters in such institutions]

    Again I agree with you wholly, we need a change in our way of thinking, we need to believe in ourselves, accept that we are just as capable, lay the foundations for our people, taking into consideration our needs and way of life and for sure we shall prosper.
     
  19. Jammu Africa

    Jammu Africa JF-Expert Member

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    1. Uchumi ni lazima utegemee masoko.

    2. Mwanadamu ni lazima azalishe kile kidogo
    anacho.

    Utanisamehe kwa kiswahili lakini nimevutiwa na maoni yako ndipo i'm writing
    this.

    Here in Kenya, we have very limited resources and it is mainly production which
    keep us going.

    I produce and you produce and exchange the commodities through the markets.

    In this way, we are multiplying the little we have.

    It is not good for people to become just consumers without producing.

    A neighbor who has two or three cows, sells the milk to the people around
    and uses the money to buy vegetables in the market is producing.

    The person who brought the vegetable in the market is also producing.

    This is where the market forces comes into play and fixes the prices according
    to the productions.

    Too much milk in the market and the price of the milk comes down.

    So in this ways, all neighbors are producing, others are buying and selling
    and everybody is busy and the whole country is working.

    The work of the government, and that is good government, is to make this possible.

    To make good roads for farmers to take their produce to the markets easily and
    cheaply.

    I've given just a few examples of simple productions and markets.

    Competition is healthy because it brings new inventions or news ways of doing things
    easier and cheaply.

    You should always learn from a person who is doing better than you and in this way get
    into his or her level and it is now upon you to even surpass him or her.

    So the best thing is to learn so as be better than to take the person who does better than
    you as an enemy.
     
  20. Manda

    Manda JF-Expert Member

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    Call it whatever, GDP,GNP au per capital income....at the end of the day all these are useless if they doesn't reflects the actual livelihood of mwananchi wa kawaida. Sustainable human development index makes more sense that GNP/GDP.
     
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