OPINION

Why Rivatex revival is good news for Kenya

Ultimately, it will have the desired spillover of job creation higher standards of life

In Summary

• The reopening of textile firms offers a big, local demand for raw cotton well beyond current production levels

Textile companies revival
Textile companies revival
Image: STAR ILLUSTRATED

The quest to return cotton farming to profitability in the country has received a vital jolt with the recent reopening of textile factories in the country. Last week, President Uhuru Kenyatta presided over the official reopening to business of the Rivatex textile factory with a strong pitch for more cotton growing in the country. Besides the Eldoret-based cotton processor, Thika Cotton Mills, Bedi Investments and Ken Knit factories have also reopened their doors to cotton-processing business.

The resumption of local textile processing is the fruition of deliberate government interventions targeting the revival and growth of local industries. For instance, by declaring a cost reduction of 50 per cent of electricity consumed by textile firms, the government intends to cut down production costs. Businesses will, in return, be expected to plough back part of their returns, thereby expanding the relevant demand and supply chain.

An immediate and long-term effect of the reopening of textile firms is a surge in demand for locally grown cotton. Such demand is good news for a crop whose farming has shrunk to isolated pockets, as frustrated farmers abandoned it for more rewarding ventures.

In its better days, cotton was an important cash crop in at least 22 of the current counties, supporting thousands of families in arid and semi-arid parts of the country.

But the painful reforms forced on Kenya and other sub-Saharan governments by the Bretton Woods institutions under the Structural Adjustment Programs (SAPs) in the 1990s dealt a mortal blow to the cotton sector. The programmes compelled African countries to free their markets to international competition. As a result, cheaper imports, including second-hand clothes, or mitumba, flooded the country at the expense of locally made apparel.

Kenyan textile factories struggled to find buyers for their products that comparatively retailed at prices higher than mitumba. As a consequence, they failed to pay farmers reasonably and on time for delivered raw material. A gradual but inevitable death of the local cotton sector followed.

The mist, however, seems to be clearing for cotton farmers. The reopening of textile firms offers a big, local demand for raw cotton well beyond the current production levels. A ready market for cotton produce should be the perfect reward to incentivise more production and commitment to the crop.

At an annual maximum production capacity of 20,000 bales, Kenya lags acres behind its East African neighbours in cotton production, according to the Agriculture and Food Authority. The comparative figures for Tanzania and Uganda are 700,000 and 200,000 bales respectively.

Low local cotton production is partly attributable to shrinking acreage under production. For instance, in 2011, at least 32,240 hectares of land were under cotton farming. But at only 13,432 hectares, the figure went down by more than half last year.

But the potential lies in abundance. The AFA projects an annual capacity of 420,000 bales annually. The production could go higher with adoption of modern farming technologies. As the President noted, Rivatex alone has the ability to consume 100,000 bales of lint. Even better for farmers and a resurgent textile industry, the annual local demand for lint is considered to be around 140,000 bales.

A bigger market exists in exports for processed cotton and finished cotton products, especially under the African Growth and Opportunity Act. In deed, Kenya is already clothing the US market with high quality apparel but in volumes far below optimum levels. A pointer to local export potential is evident in investors’ scramble for the textile industrial sheds in Athi River.

If reinforced by the drive to popularise the Made-in-Kenya fabric, the demand for local cotton can only grow bigger. This must be in tandem with a strong drive and oversight for quality to reestablish Kenyan cotton credentials. Ultimately, it will have the desired spillover of job creation and a thread of auxiliary businesses feeding off and supported by the proceeds of the crop.  

To encourage cotton farming, the government is exploring the possibility of guaranteeing a market of all locally grown crop subject to the produce meeting specified standards. It is also in talks with 24 cotton-growing county governments to provide seed and other agricultural extension services to farmers.  

The Rivatex plant, for instance, is expected to directly employ more than 3000 people. At full throttle, and combined with other textile factories, the potential for jobs is projected to rise to nearly 10,000.

There will be more direct and indirect benefits from cotton by-products such as vegetable oil and animal feeds. Alongside the cottage industry linked to the crop, the entire value chain stands to benefit more than 150,000 people.

Other benefits from cotton farming may not be obvious but are nevertheless equally important. For instance, predominantly ASAL regions that are favourable to the plant’s growth are prone to cattle rustling and insecurities fuelled by poverty and joblessness. Profitable farming of cotton could potentially mitigate such conflicts.

Jobs stitched out of a thriving local textiles industry and the attendant benefits ecosystem resonate well with the Big 4 Agenda. Indeed, manufacturing and industrialization is a primary pillar of President Kenyatta’s development legacy.

By walking the talk on growing the local industries through purposed interventions, the government hopes the benefits will transcend the economic feel-good for individuals and collective societies. Rather, it will ultimately result in higher standards of life and pride in self and country.

The road to economic emancipation should ideally deliver citizens to a happier, longer life!  

 

Chief of Staff and Head of Delivery