Zohra Baraka, managing director of Mohazo Eximpo Ltd at her exhibition stand in Frankfurt,Germany during the Ambiente 2019 exhibition. (James Wanzala,Standard)
The home decor and personal accessories sector, formally handcrafts sector is calling for the Government support and recognition just like other sectors of agriculture and tourism.
Speaking to The Standard at the four days ongoing World Ambiente 2019 Consumer Goods Show that ends on Tuesday in Frankfurt, Germany, the sector players blamed the Government for ignoring them while the sector employs many Kenyans among other benefits.
‘‘Look at this stand of Indonesia for instance, their country’s trade ministry has a stand and near it are companies from Indonesia that have been supported to come and exhibit unlike us, where only three companies Mohazo Eximpo, Bawa Hope and Undugu Fair Trade, which were partially supported by USAID through the East African Trade hub to come,’’ said Andrew Mutisya, business development manager from Bawa Hope Ltd.
‘‘The Government has really neglected us yet this sector has so much to offer. There is more to export than just talking about coffee, flowers and tea. If we can get support to go and exhibit in such more often world exhibitions, it will be good unlike now when we are getting support from abroad as opposed to our country to come to these exhibitions yet we are known for handcrafts,’’ added Mutisya.
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His remarks were supported by Muriuki Njeru, managing director of Afrikiko, which sponsored itself to come to the show.
On financing, Njeru blamed Kenyan banks for failing to value the sector despite getting huge demands for the products that they cannot meet due to financing of exports.
‘‘Pre-financing of export orders is one of our biggest challenge since big retailer companies’ clients prefer paying after like one month after shipment thus you have to cater for everything. Fair trade companies who buy in less quantities pay like 50 per cent down payment. The banks don’t see this sector as trust worthy and or big business like tea or coffee even if you are banking with them and if you don’t have collateral you will not be successful in this sector,’’ added Njeru, whose company is based in Tabaka, Kisii County.
Njeru says the National and County Governments should invest in the sector to help in mining of raw materials because most of the companies use poor tools to mine the materials and the yet the sector creates huge employment opportunities in the value chain.
Andrew Mutisya from Bawa Hope Ltd at his exhibition stand in Frankfurt,Germany during the Ambiente 2019 exhibition. (James Wanzala,Standard)
Mutisya suggested that funding of the sector should be through organisations like Export Promotion Council(EPC), Brand Kenya and Kenya Tourism Board (KTB) which understand this sector well.
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Mohazo Eximp Ltd managing director Zohra Baraka who supports Njeru on pre-financing says the sector employees about 1.3 million people and this a good reason the government should support the sector.
‘‘The interest rates are so high and the due diligence they do take almost forever so, when you are given an order to supply within for instance three months, you may lose the order,’’ said Baraka.
‘‘The banks also have not taken time to learn the industry model. In our industry we do not get orders every day and being denied credit because we don’t deposit now and then is not good. This has made me lose many orders because the shipment expenses are high and need financing,’’ said Baraka, who said there is also need for quality standards to be set in the sector to avoid products being rejected in foreign markets.
According to Margaret Waithaka, director, trade promotion and AGOA USAID contractor, if the Kenya National African Growth and Opportunity Act (AGOA) Strategy and Action Plan is effected, Kenya can do better in export of its home decor and accessories products.
The strategy provides strategies and actions for increasing exports to the U.S., informed by an analysis of identified priority sectors.
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The overall approach of the strategy includes multiple actions in areas that range from expanding U.S. market and diversifying buyers to facilitating trade, to developing skills, increasing productivity, building trade support capacity and developing export supply. ?
Waithaka said the seven countries that USAID works with in their last financial year that ended September 2018 had achieved over USD 1 billion (Sh100 billion) worth of exports to the US with Ethiopia leading with over 100 per cent.
“Current Kenya national AGOA exports for all products to U.S. were USD 396 million (Sh40 billion) in 2016 (source, USITC) while total exports to U.S (AGOA and non-AGOA) were USD 552 million (Sh 55 billion) in 2016 and have capacity to double to USD 1,105 million (Sh111 billion) by 2023, as indicated in the strategy
Kenya continued to be the largest AGOA exporter amongst the seven countries in the region but grew at 12 per cent while Ethiopia had the highest growth in its AGOA exports in FY2018.
Under the strategy, Kenya’s home home decor and fashion accessory exports were planned to expand from USD 3.8 million (Sh381 million) in 2016 to USD 7.5 million (Sh753 million) by 2023.
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Kenya AGOA 2017 to 2023 annaul average export targets for home decor and personal accessories is at 10.2 per cent ahead of apparel at 9.7 per cent and behind fresh fruits and vegetables at 12 per cent
‘‘Lack of awareness by Kenyan companies of the AGOA opportunities, supply chain constraints and access and knowledge of the of the foreign market demands including like quality are still the main challenges of the sector,’’ said Waithaka, who told the business community that the sector has huge potential to grow if the above challenges are dealt with.