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Dear CS Moses Kuria.
I want to believe that being the Cabinet Secretary for Trade, you have the interest of local businesses at heart. I also want to believe that your latest tweets about the Chinese Place (China Square) in Unicity are largely influenced by your resolve to protect the interests of local traders.
I also believe that you are not blind to the fact that businesses worldwide are facing unprecedented disruption. Nothing we or the government can do to roll back the clock. Disruption is coming whether we like it or not. It is therefore my opinion that blocking the Chinese traders from operating in Kenya is not the solution. This is taking a painkiller to cure a life-threatening disease. It may work to relieve pain for now but without proper medication, the patient will eventually die. This is what will happen to Kenyan businesses if the government will not address what makes Kenyan businesses remain uncompetitive.
To start with, being intelligent, educated, and informed as you are, I would advise that you set up a meeting with local traders, especially the Nyamakima ones. Make sure you have Charles Darwin’s book “Origin of Species” on the table “. Make them understand that like every living thing, businesses to go through evolution and the principle of Survival for the fittest comes to play. Businesses that survive the disruption are the ones that adapt quickly and keep innovating.
Those that stick to the old way of doing things die in the process. An Austrian-born Economist Joseph Schumpeter coined the term Creative Destruction i.e the process through which something new brings about the demise of whatever existed before it. This happens in businesses more often. As businesses die, others sprout to take their place.
Remind them that we had big names like Kodak, Blackberry, Nakumatt, Tuskys, et al. They all perished due to a combination of factors key among them their inability to innovate and adapt to the changing business environment. The same will happen to local traders if they don’t quickly innovate. Today you may be able to stop at China Place, tomorrow Amazon or Walmart will set up a shop in Kenya. Let me tell you Bwana CS, unlike the small-time China Place, the aforementioned are behemoths. Once they land, they will run everyone out of town from Nyamakima Traders to village Mom and Pops.
As a government, you have a big part to play in making sure local businesses from manufacturers to small-time traders remain competitive and resilient in the wake of ongoing disruption. It all comes down to the regulatory environment. Comb through our tax code. Does it encourage investment? A BIG NO. Look at dozens of licenses and permits required to set up a business in Kenya. Does it encourage investment? A BIG NO.
Read: Sex For Work? What You Need to Know in 2023.
One proposal I have in mind is giving local manufacturers and traders tax breaks or even lower corporate taxes. Do away with unnecessary regulations that strangle businesses until they can’t breathe. Stop this habit of policemen, council askaris, and other regulatory bodies harassing traders and asking for bribes. All this adds up to the cost of doing business and the consumer ends up paying for it. This is why we can’t compete with the Chinese where taking bribes attracts capital punishment and the cost of production is minimal. Let the current jealousy jolt everybody in government to action to improve the business environment in Kenya.
If you want to protect local traders from cheap Chinese imports, don’t force them to close businesses—just petition parliament to increase import duty on goods imported to this country by foreign-owned companies. Or better still enact a law forcing Chinese companies wishing to trade in Kenya to have a certain percentage of local ownership. I know this was done away with a few years back but the law can be amended in the national interest. But as the CS for Trade, you know there is every likelihood that China will retaliate against such policies. Are we ready for a trade war with China?
Ask Donald Trump
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ALSO READ China Square closes down indefinitely
China Square closes down indefinitely
China Square has announced that the shop will remain closed indefinitely to allow time to sort out a number of issues.
In a notice on its official Facebook page on Sunday, the retailer (China Square) said the provision of sufficient security is among the issues to be addressed during the closure period.
“We, China Square Limited, regret to inform you that we will continue to close down for further notice,” the statement reads in part.
This follows a tweet from Cabinet Secretary Moses Kuria that he offered the Kenyatta University Vice Chancellor, to buy out China square.
The CS went ahead and posed a question to former Interior Cabinet Secretary Fred Matiang’i asking him why he issued work permits to Chinese traders.
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