11th November 2020
UK government still hasn’t produced a lorry drivers’ guide
Though it became sub-Saharan Africa’s largest garment provider to the West in 2013, Kenya’s belief an export-focussed garment industry can create 80,000 new jobs now appear threatened by an upsurge in terrorism – though Li&Fung are now investigating further sourcing from the country.
In 2013, Kenya overtook Mauritius and Lesotho to become, based on square metres of fabric, Africa’s largest apparel supplier, after Egypt, Morocco and Tunisia to the US and Europe. Though its share was just 0.18%, growth continued into 2014, with exports to rich countries on the Clothesource Tradetrak database up 13.9% in the first four months of 2014.
In January, H&M announced it had begun some sourcing from Kenya, and there are now five approved suppliers in Nairobi and Mombasa on factory list. In April, stories appeared of Yum! Brands (the holding company for KFC, Pizza Hut and Taco Bell) reviewing the sourcing of uniforms from Kenya, while buyers from VF, PVH, M&S, and Hugo Boss attended a presentation of a proposed Textile City at the Athi River Export Zone near Nairobi, claimed to be coming onstream by December 2016. Kenya’s Ministry of Industrialisation leaked on June 19 that “following its fact finding mission, all indicators are now positive that Li & Fung may be one of the first operators at the proposed Textile City.”
On June 12, the country’s finance minster presented an annual budget with an allowance of $33 mn (a substantial amount by Kenyan standards) to support development of the country’s textile supply chain. Presenting it, National Treasury Cabinet Secretary Henry Rotich said the textile and leather sectors have “potential to create close to 800,000 jobs in the next three years.”
The leaks about Li & Fung are simply silly. L&F have no sourcing office in East Africa, L&F must be considering how to support its clients who want to source more from the region and Kenya is a logical place to consider putting a sourcing office. That, though is a a long way from being an “operator” in a factory complex. L&F’s worldwide trading offices, however sophisticated technologically, are simply bases for negotiators, quality controllers and the like to manage and investigate local manufacturers: they are rarely based in out of town manufacturing complexes, and neither need nor enhance them
But confidence in the country’s stability has been hit by terrorist attacks, many aimed at Nairobi and Mombasa, and confusion about the Kenyan government’s response. After at leaet 40 people were killed in an attack on a Nairobi shopping mall in September 2013, and at least 30 people have been killed in about a dozen terrorist attacks in Nairobi and Mombasa prior to June. On June 15 and 16, over 60 people were killed in bomb attacks on World Cup viewers near Mombasa.
Most observers believe the attacks are by extremist Islamists, trying to undermine links with the West. They have already hurt Mombasa’s economy, and led to travel advisories by the UK and USA cautioning against much of Eastern Kenya, most of Mombasa and a number of neighbourhoods in Nairobi – invalidating travel insurance to these areas, and potentially invalidating some life insurance policies. The Kenyan government’s insistence that the most recent of these attacks have been planned by more conventional domestic political opponents has added to many businesses’ concerns about their potential for further escalation.
Though many countries seeing increased violence over the past year have seen little damage to their garment industry, the upsurge in Kenya comes just as its government is seeking more commitments from foreign investors and substantially bigger purchase orders from more foreign customers.
With growing interest in new sources, especially from the US, some growth in Kenya’s garment exports is possible, even if terrorist attacks continue. It is hard to see the huge leaps of foreigners’ faith needed for new jobs in the hundreds of thousands unless stability is restored – which seems unlikely at present.