The bristling dominance of American corporations may sometimes obscure the fact that they plunder at least as effectively as governments in ‘less-developed’ countries (LDCs). In LDCs, bribery, tribalism, and family ties conspire to exclude small businesses from important supply lines. The economic crippling of family breadwinners – mostly women – becomes invisible from the meeting rooms of five-star hotels and government offices.
This dynamic shifted into high gear at the start of the COVID pandemic. Africa needed PPEs (Personal Protective Equipment). My particular interest is Kenya where I know some back stories of the country’s COVID response.
In April 2019, the Kenya National Chamber of Commerce and Industry (KNCCI), the Kenya National Federation of Jua Kali Associations (KNFJKA), and The Micro and Small Enterprise Authority (MSEA) formed a coalition. In Kenya’s COVID response, MSEA was tasked with forwarding Ministry of Health orders (for PPEs) to the MSEs and paying vendors when the masks were delivered. (The acronyms are dizzying.)
In a speech on 24 April 2020, https://www.youtube.com/watch?v=0K6UfZVFvcE (forward approx. 8 minutes to the relevant section) Kenya’s President Uhuru Kenyatta promised 1.5 billion shilling (about US$14 million) to enable the Jua Kali (informal workers) to take ‘center stage’ in the production of facemasks for the domestic and export markets.
Informal workers contribute about 83% of economic activity in Kenya. Anything that supports growth in this sector has a huge impact on the country’s recovery.
Since March 2020, money has poured into Kenya for COVID response through 99 initiatives whose ‘known worth’ is about $15 million. This came from the usual suspects in the ‘rescue industry’: International Monetary Fund, World Bank, African Development Bank, the European Investment Bank, USAID, and the Gates Foundation, to name the biggest donors.
Billionaire Jack Ma delivered a boatload of masks, test kits, and protective suits. Other organizations and businesses made smaller pledges or donated goods. The majority of these funds have been funneled through the Kenya Ministry of Health. The primary expenditure area is “COVID Response.”
The Train Wreck Begins
Now we come to the Kenyan tradition of corruption (not that ours or any other country has clean hands). Speaking on August 10, 2020, Health Minister Mutahi Kagwe said he and President Kenyatta are determined to eliminate cartels in the Procurement Department inside the Ministry of Health.
Meanwhile, 42 MSE manufacturers throughout Kenya have, or can acquire, the capacity to meet the government’s goal of getting 24 million masks on the faces of Kenyans. Thirty-four of the small businesses (80%) are managed by women.
Vague ‘orders’ for face masks were sent to some businesses in May 2020. The specifications stated both surgical and reusable masks. Every potential vendor was required to get examination and approval of their production samples from the Kenya Bureau of Standards (KEBS). These cost were not insubstantial. As of August 10, 2020, vendors still had not received requests for delivery, much less payment for finished masks. An actionable tender appears not to have existed or been mysteriously withdrawn.
Kenya Medical Supply Authority (KEMSA) Chief Executive Officer Jonah Manjari said on 2 March 2020 that the government had banned local manufacturers and distributors from exporting N95 and 3-ply surgical masks “to ensure the country has enough stock as part of its emergency plan.”
According to some manufacturers and distributors, the price in Kenya for a 50-pack box of face masks had shot up from about 200 shillings ($1.88 or 3 cents each ) before the coronavirus outbreak to nearly 1000 shillings (about $9.60 or 19 cents each).
In December 2020, KEMSA issued new specifications for masks, sized to fit young children. Contractors were directed to source materials from selected businesses. Sewing and other machines had to be acquired. About 30,000 adult-sized masks produced by one small business still sit in a store room. Despite many inquiries, no buyers have yet been found.
For any small enterprise, holding a lot of inventory seriously limits cash flow. Workers cannot be paid for any further work. That translates into families going hungry. Some lose their homes. (Kenya has not legislated eviction protection, even in the slums.)
Finally, in January 2021, a tender came through the Kenya National Chamber of Commerce and Industry (KNCCI) for young children’s masks, in red, with a government logo imprinted, packaged individually then in lots of 500 per carton, and delivered to the Ministry for distribution. The price paid – about 31 cents per mask – did not allow small businesses to break even.
Enter the COVID-19 Action Fund for Africa (CAFA). From their FAQ: “A PPE initiative of over 30 organizations dedicated to protecting Community Health Workers on the frontlines of Africa’s COVID-19 response in 24 African countries [including Kenya]. Key objectives: Find an urgent unmet need…protect community health services delivery.”
This is a bad-case-scenario for Kenya’s MSEs and Jua Kali. CAFA would be sending imported Western or Chinese-made masks, thus further depressing demand and prices in Kenya. This ‘intervention’ undercut Kenya’s economic engines – the small businesses; they will have a hard time surviving more foreign ‘help.’
Predicting when the COVID chaos will be sorted is difficult if not pointless. However, the next couple of months offer a major “opportunity window” to grow Kenya’s PPE manufacturing capacity.
The livelihoods of thousands of women depend on a trifecta of unlikely triumphs: a successful probe of government corruption, the rooting out of illegal PPE distribution cartels, and limits on the sledgehammer assistance of “well-wishers.”
Without such systemic changes, small businesses will scramble to survive; the closing of many will have dire consequences, particularly for moms and kids. The virus and hunger prowl the poorest communities. Residents won’t be vaccinated until July 2022.
Kenyans claim to be sick and tired of their self-serving government.
Some of the ‘rescuers’ claim to understand how damaging their support of the status quo can be.
Where does the fight for better opportunities for Kenyans begin? And who walks point?