REALITY CHECK

Why rural shopping centres are dying

Commercial buildings in rural areas are crumbling with neglect

In Summary

• They used to thrive in the old days but various factors have led to their decline

A commercial building
A commercial building
Image: FILE

Many rural shopping centres have stagnated with time. It is common to hear adult Kenyans remark how their village shopping centre looks exactly as it did several decades ago, when they were schoolchildren.

Indeed, there is plenty of evidence of this trend. Our rural areas are filled with abandoned buildings whose owners expected would be filled with profitable businesses. Shop buildings that housed big wholesale outlets are crumbling in neglect as nature slowly reclaims its ground. Even those buildings still in use are obviously under-utilised. One can come across a huge shop with just a small food café inside it; the tenant paying as little as Sh1,000 a month in rent.

The decline of rural shopping centres has negative impacts on families that own the dilapidated buildings: they no longer get rental income. The buildings were mostly put up many years ago by people who are now retired. At the time they were building, it seemed like a worthy investment that would provide an income for old age. Now, the retirees find themselves with empty buildings. The superstitious among them may attribute the misfortune to witchcraft.

The irony of rural decline is that the number of potential customers who should be doing business in those buildings is increasing. At independence in 1963, Kenya had approximately 9 million people in its territory. The national census of 2019 found the population of Kenya had grown to almost 48 million people. The vast majority of Kenyans, 68 per cent, live in rural areas.

With the increase in population since independence, one could reasonably conclude that rural shopping centres should be much bigger today because there simply are more people looking for premises to do business. Instead, village trading centres are in a desperate struggle for survival. This peculiar phenomenon gives rise to the question: why?

Cash crops decline

Rural shopping centres thrived because there was money circulating in the local economy. The money was generated by farmers producing coffee, cotton, pyrethrum, castor oil, green chillis, coconuts and cashewnuts. Due to a combination of low prices and mismanagement of the agricultural sector, the markets for those cash crops crashed. Farmers lost their incomes and purchasing power declined as a consequence.

With fewer customers showing up, the rural business community migrated away from the local shopping centres to bigger towns that have more customers. However, there are rural areas that still have profitable farming activities, such as tea growing and dairy production. In those places, rural shopping centres are thriving.

Collapse of rural factories

Sugar, coffee, cotton and leather processing factories were the mainstay of rural industry. Apart from providing value addition for farm produce, these factories provided direct employment to hundreds of people. In turn, direct employment supported thousands of indirect jobs. This created a mass of people who had the purchasing power to support many other local businesses, such as restaurants, bars, the local tailor, the local private school and the matatus, all of which boosted community incomes.

The decline of sugar factories in the western part of Kenya has severely affected the rural economy. The town of Mumias is suffering because Mumias Sugar factory, once Kenya's largest producer of processed sugar, was closed. Still in western Kenya, the closure of Pan Paper Mills had a big negative impact on business in the small town of Webuye. Similar experiences were noted in the coffee-growing areas of central Kenya, where rural business ground to a halt as coffee prices plunged in the 1980s.

Closure of old railway stations

Kenya's colonial economy was organised along the old Kenya-Uganda Railway from the Coast. Not only did the railway have a near-monopoly in cargo transport, but it also employed hundreds of thousands of workers. Most towns in Kenya lie along the old railway line and branch lines to Nanyuki, Nyahururu and Magadi. Along the railway lines were residential quarters, where railway employees lived. These were known as Landhies. The decline of the old railway resulted in the closure of almost all Landhies. The closure affected many surrounding businesses.

Rural-urban migration

According to the New Economy magazine, rural areas across the world are struggling to sustain themselves, with many inhabitants retired or with limited mobility. "Families that remain usually find that younger members leave for the city as soon as they get the chance, eager for change and a bigger social group," reads part of an article published in the magazine.

The collapse of rural economies due to the decline in cash crops and closure of agricultural processing factories resulted in few income-generating opportunities for the youth. In urban areas, educated youth have a chance of finding jobs in the formal sector. Young people who lack formal academic qualifications can at least find menial work in construction, open-air markets and as unskilled workers in factories. Jobs in towns pay much more than the equivalent in rural areas. Others may open small-scale businesses.

Poor management of inter-generational wealth

Michael Mbololo, a real estate agent, says another problem afflicting rural commercial buildings is family disputes revolving around inheritance. When ownership wrangles remain unsolved, the buildings are neglected and eventually fail to attract tenants. Some business premises in rural areas were put up decades ago by people who have either passed away or are too old to actively manage the property. Sadly, the generations that inherit the property may not value it as much as the original owners. The old buildings eventually fade and crack in desolation.

Absentee landlords

Younger generations that inherit property from their parents may be living far away from the village in cities, or in other countries. Some may be living nearby but lacking funds to renovate the buildings.

Fear of witchcraft

Some communities believe success might provoke jealous neighbours into casting black magic on the successful individual. This discourages investment in rural areas. "I know of people who left their shops because of the fear of witchcraft," says Mama Halima, a coastal resident.

"Their buildings are about to collapse because there is nobody left to maintain the structures," she says. “The families that own those buildings left permanently.”

For those planning to invest in rural areas, would it be a good idea putting up a commercial building in the village? Probably not.