UNIVERSITY OF NAIROBI
SCHOOL OF ENGINEERING
DEPARTMENT OF MECHANICAL AND MANUFACTURING ENGINEERING
FINAL YEAR PROJECT REPORT
[FME 561 & 562]
PROJECT TITLE:
DEVELOPING A FOCAL POINT FOR THE ENHANCEMENT OF THE 24 HOUR
ECONOMY IN THE MANUFACTURING SECTOR IN NAIROBI.
CASE STUDY: VISION 2030
PROJECT CODE: GM002
SUPERVISOR: ENG. G. M. NYORI
COMPILED BY:
MAHMOUD IBRAHIM HABIB F18/1725/2007
KABIRU DENNIS GATHOGO F18/2714/2007
This project report is submitted in partial fulfillment of the requirement for the award of the degree of
Bachelor of Science in Mechanical Engineering.
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DECLARATION
We, the undersigned, declare that this project is of our original work and has not
been submitted for a degree award in any other institution of higher learning or
published anywhere else.
MAHMOUD IBRAHIM HABIB
F18/1725/2007
Signed………………………………….
Date: ……………………………
KABIRU DENNIS GATHOGO
F18/2714/2007
Signed…………………………………...
Date: ………………………………
This project has been submitted for examination with the approval of our project supervisor
Project supervisor:
ENG. G. M. NYORI
Signed ………………………………….
;
Date: ……………………………….
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ACKNOWLEDGEMENTS
First, we thank the Almighty God for guiding and giving us strength, peace of mind and
grace that has brought us this far.
During the preparation of this project, we came across many people who have been
instrumental in helping us complete this project. We would like to extend our sincere
gratitude to them and truly appreciate them for their untiring support.
However, in an elite category that demands mentioning are the following persons:
Our project supervisor, Eng. G.M. Nyori- we are very grateful for the encouragement,
guidance, criticism, concerned assistance, patience and friendship that you gave us from
the beginning of the project to its successful completion.
We would like to thank The Chairman‟s office (Dept. of Mechanical &Manufacturing
Engineering) for the earnest help you granted us including access to previous projects and
research materials.
Our special thanks to the ministries and companies that were part of our survey for
granting us access to the very useful information and resources to do this project.
We are grateful to all our family members and friends who supported us all the time to
the completion of this project.
To all, we say thank you and God bless you.
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ABSTRACT
Kenya‟s economic capacity is underutilized in terms of many resources. Furthermore,
much of the efforts done by the government (Ministry of Industrialization) on improving
the manufacturing sector are mainly on the development of micro, small and medium
industries (MSMIs) rather than how to enhance the very promising 24 hour economy of
the already existing manufacturing industries in order to fully utilize the resources
available to ensure improved productivity.
The objectives of carrying out this project were to investigate the level of government
involvement in the adoption of a twenty-four hour economy in the manufacturing
industry in Nairobi, study the factors that hinder the adoption of the twenty four hour
economy in manufacturing, investigate on the causes of low demand for locally
manufactured goods, investigate the effect of technology in the manufacturing sector,
investigate on the other sectors affecting the implementation of the 24 hour economy in
the manufacturing sector in Nairobi and develop a focal point for the enhancement of a
24-hour economy for the manufacturing sector in Nairobi.
Background information on manufacturing companies was obtained from progress
reports, websites among others as cited in the introduction and literature review.
We visited manufacturing companies in Nairobi, relevant ministries and suppliers where
we gave them questionnaires to fill and also conducted interviews with so as to get the
relevant information. After collecting the questionnaires we analysed them and came up
with tables and charts showing the problems the companies were facing, government‟s
involvement and other sectors affecting the implementation of the twenty four hour
economy.
The findings indicate that the government, through the planning and industrialization
ministries has a very big role to play in encouraging the taking up of 24-hour
manufacturing by coming up with favourable policies. The manufacturing companies
should also invest in technology and research and development for value addition and
product diversification.
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ABBREVIATIONS
ACA – Anti-Counterfeit Agency
AGOA – African Growth and Opportunity Act
ATM – Automated Teller Machine
BDS – Business Development Services
BPO – Business Process Outsourcing
COMESA – Common Market for Eastern and Southern Africa
EAC – East African Community
EU – European Union
GDP – Gross Domestic Product
HIV – Human Immunodeficiency Virus
KEPSA – Kenya Private Sector Alliance
MDGs – Millennium Development Goals
MSMIs – Micro, Small and Medium industries
MTP – Medium Term Plan
NCBDA – Nairobi Central Business District Association
NEMA – National Environmental Management Authority
NGO – Non-Government Organization
R & D – Research and Development
SMEs – Small and Medium Enterprises
STI – Science, Technology and Innovation
UNEP – United Nations Environmental Programme
WHO – World Health Organization
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LIST OF FIGURES
Figure 4.1: Percentage restriction of the imports by the Government....................... 40
Figure 4.2: Percentage of goods sold locally and exported .......................................... 45
Figure 4.3: Likely causes of drop in demand for locally manufactured products .... 46
Figure 4.4: Response as to whether 24 hour manufacturing will help the other
sectors ............................................................................................................ 48
Figure 5: Effect of other sectors ..................................................................................... 49
Figure 4.6: Police on patrol ............................................................................................. 53
Figure 4.7: Traffic jam in Nairobi ................................................................................. 56
Figure 4.8: Means of transport ....................................................................................... 57
Figure 4.9: ATM outlets .................................................................................................. 60
Figure 4.10: Health care services ................................................................................... 62
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LIST OF TABLES
Table 4.1: Response rate ................................................................................................. 37
Table 4.2: Respondents by category .............................................................................. 38
Table 4.3: Experience in the industry ............................................................................ 38
Table 4.4: Awareness of Gov’t involvement in promotion of 24 hour economy ....... 39
Table 4.5: Strategies in Research and Development and their outcomes .................. 43
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Contents
DECLARATION ....................................................................................................................................... 2
ACKNOWLEDGEMENTS ......................................................................................................................... 3
ABSTRACT .............................................................................................................................................. 4
ABBREVIATIONS .................................................................................................................................... 5
LIST OF FIGURES .................................................................................................................................... 6
LIST OF TABLES ...................................................................................................................................... 7
CHAPTER ONE ............................................................................................................................................. 10
INTRODUCTION ....................................................................................................................................... 10
1.1
BACKGROUND INFORMATION ................................................................................................ 10
1.2
INDUSTRIAL MANUFACTURING ............................................................................................. 10
1.3
JUSTIFICATION FOR THE 24 HOUR ECONOMY ....................................................................... 11
1.4
PROBLEM STATEMENT ........................................................................................................... 12
1.5
OBJECTIVES OF THE STUDY .................................................................................................... 13
1.6
SCOPE AND LIMITATION OF THE STUDY ................................................................................ 13
CHAPTER TWO ............................................................................................................................................ 14
LITERATURE REVIEW ............................................................................................................................... 14
2.1
VISION 2030 ........................................................................................................................... 14
2.2
24 HOUR ECONOMY............................................................................................................... 18
2.3
ANALYSIS OF OPPORTUNITIES ON IMPROVEMENT IN MANUFACTURING ............................. 22
2.4
EMERGING ISSUES AND CHALLENGES ................................................................................... 25
CHAPTER THREE .......................................................................................................................................... 32
RESEARCH METHODOLGY ....................................................................................................................... 32
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3.1
INTRODUCTION ..................................................................................................................... 32
3.2
RESEARCH DESIGN ................................................................................................................. 33
3.3
THE DATA ............................................................................................................................... 33
3.4
STUDY AREA ........................................................................................................................... 34
3.5
POPULATION .......................................................................................................................... 34
3.6
SAMPLE .................................................................................................................................. 34
3.7
DATA COLLECTION INSTRUMENTS ........................................................................................ 34
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3.8
DATA COLLECTION PROCEDURE ............................................................................................ 35
3.9
TREATMENT OF DATA ............................................................................................................ 35
3.10
CONSTRAINTS.......................................................................................................................... 36
CHAPTER FOUR ........................................................................................................................................... 37
SURVEY FINDINGS AND DATA ANALYSIS................................................................................................. 37
4.1
RESPONSE RATE ...................................................................................................................... 37
4.2
FINDINGS ................................................................................................................................ 38
4.3
ANALYSIS ................................................................................................................................ 51
CHAPTER FIVE ............................................................................................................................................. 65
SUMMARY, CONCLUSIONS AND RECOMMENDATIONS ......................................................................... 65
5.1
SUMMARY OF FINDINGS. ....................................................................................................... 65
5.2
CONCLUSIONS ........................................................................................................................ 67
5.3
RECOMMENDATIONS ............................................................................................................. 67
5.4
Areas of further research ....................................................................................................... 68
References .......................................................................................................................................... 69
Appendix: Questionnaire .................................................................................................................... 70
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CHAPTER ONE
INTRODUCTION
1.1
BACKGROUND INFORMATION
Nairobi business contributes enormously to the economy of Kenya. In fact, Nairobi is
considered a business hub for East and Central Africa.
Most companies that have operations in this region have headquarters located in
Nairobi, including international organizations and multi-national companies. Coca
Cola, General Motors, Google and even the United Nations' regional headquarters are
located in this city.
Those looking to establish a new business find that Nairobi is an ideal location
because of its infrastructure and liberal markets. Government policies have
encouraged business growth and a stable Nairobi economy. Its modernity, state-ofthe-art skyline, improved technology, highly educated and trained manpower, and
diverse and vibrant market have elevated Nairobi to become the business hub of the
region. Nairobi, alone, contributes 60 percent of Kenya's GDP. Its companies are both
public and private entities, including service based, agricultural and manufacturing
industries.
Population of the study-The population is the total collection elements about which
one would wish to make some interference. It is the compared set of individuals, case
or objects which some common observable characteristics from which a sample may
be taken for statistical measurement. [6]
1.2
INDUSTRIAL MANUFACTURING
Kenya has a large manufacturing sector serving both the local market and exports to
the East African region. The sector, which is dominated by subsidiaries of multinational corporations, contributed approximately 13% of the Gross Domestic Product
(GDP) in 2004. Improved power supply, increased supply of agricultural products for
agro processing, favourable tax reforms and tax incentives, more vigorous export
promotion and liberal trade incentives to take advantage of the expanded market
outlets through AGOA, COMESA and East African Community (EAC)
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arrangements, have all resulted in a modest expansion in the sector of 1.4 % per cent
in 2004 as compared to 1.2% in 2003. [1]
The rising levels of poverty coupled with the general slowdown of the economy has
continued to inhibit growth in the demand of locally manufactured goods, as effective
demand continues to shift more in favour of relatively cheaper imported manufactured
items. In addition, the high cost of inputs as a result of poor infrastructure has led to
high prices of locally manufactured products thereby limiting their competitiveness in
the regional markets and hampering the sector's capacity utilisation. However, the
recent introduction of the EAC Customs Union provides Kenya‟s manufacturing
sector, the most developed within the region, a greater opportunity for growth by
taking advantage of the enlarged market size, economies of scale, and increased
intraregional trade.
Manufacturing in Nairobi consists of many small and medium-sized industries. These
include industries manufacturing steel products, plastic goods, soaps, flour, vegetable
oil, canned fruit and fruit juice, horticulture, and dairy and poultry farming. Bulk
trading of Kenyan coffee (the Kenyan coffee auction) also takes place weekly at the
Nairobi Coffee Exchange. Although Nairobi trade is based on an agricultural
economy, the most vibrant industry is the service-based industry with Business
Process Outsourcing (BPO) as the latest entrant into the market. The service industry
contributes 59.2 percent of Nairobi's GDP as compared to 24 percent from agriculture,
followed next by the manufacturing industry.
1.3
JUSTIFICATION FOR THE 24 HOUR ECONOMY
There are both economic and social justifications for a 24-hour economy. The leading
major justification is the availability of slack capacity – Kenya‟s economic capacity is
underutilized in terms of many resources. Among the main aspects of this are the
following:
i.
Human resource utilization. Many people are unemployed and under
employed. This is a serious socio-economic issue that creates an idle resource,
one that can and does result in subsequent negative externalities such as crime
and destitution. Employment creation is, therefore, a major justification.
ii.
;
Equipment. A lot of equipment, including machinery and space, is idle at night
and on weekends. It can be utilized during these times by second and third
shifts of the workforce in many instances.
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iii. Economies of scale. A 24-hour economy helps to ensure economies of scale –
i.e., the more one produces, the lower the cost of production per unit.
iii.
Economies of scope. There would be economies of scope – one can do more
with what one has at any given time. For example, opening factories at night
will cause other businesses to remain open in order to service the factories,
from food suppliers and restaurants to taxi-cab services and banks.
v. Economic and multiplier effect. The extra money made through extra shift-work
will obviously enter the consumer and savings economies, leading to increased
demand for goods and services and increased investment. This will help lead to
the creation of more jobs, which can then also become a part of the 24-hour
system.
vi. Greater capacity utilization. The country would start to work more efficiently as
an economy, at all levels, than is presently achievable. This is a desirable goal,
especially as it would lead to the creation of a more stable political, economic and
social system.
vii. Decongestion of traffic. The implementation of the 24-hour economy will help
lead to the decongestion of vehicular and pedestrian traffic in cities and towns, as
people would be working at different hours of the day, the night and the week.
viii. Synchronization with the global economy. The fact that the world is divided into
several time zones means that different parts of the world operate at different
times. When one half is in night and most people are asleep, the other half is in
daytime and generally active. Kenya having a 24-hour economy will allow the
country to take advantage of both sides, dealing with each side when it is at its
most active, day and night. This will help make Kenya more competitive and
well-positioned for greater economic growth.
1.4
PROBLEM STATEMENT
Kenya‟s economic capacity is underutilized in terms of many resources. Furthermore,
much of the efforts done by the government (Ministry of Industrialization) on
improving the manufacturing sector are mainly on the development of micro, small
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and medium industries (MSMIs) rather than how to enhance the very promising 24
hour economy of the already existing manufacturing industries in order to fully utilize
the resources available to ensure improved productivity.
We therefore saw the need to take up this project and develop a focal point on how
the manufacturing industry can enhance its 24 hour economy.
This project intends to investigate the extent of adoption of the twenty four hour
economy in the manufacturing sector in Nairobi.
1.5
OBJECTIVES OF THE STUDY
The objectives of the study are:
a) Investigate the level of government involvement in the adoption of a
twenty-four hour economy in the manufacturing industry in Nairobi
b) Study the factors that hinder the adoption of the twenty four hour economy
in manufacturing
c) Investigate on the causes of low demand for locally manufactured goods.
d) Investigate the effect of technology in the manufacturing sector.
e) Investigate on the other sectors affecting the implementation of the 24 hour
economy in the manufacturing sector in Nairobi
f) Develop a focal point to enhance the adoption of the 24 hour economy
1.6
SCOPE AND LIMITATION OF THE STUDY
The research was limited to Nairobi. It includes administering written questionnaires
to manufacturers, engineers, engineering consultants, suppliers and other players in
the manufacturing industry. This is because eighty percent of the manufacturing g
industries in Kenya are located in Nairobi and also the proximity of the researcher to
them. Most companies undertake their operations in Nairobi and their offices are
located in Nairobi even though some of them have branches outside Nairobi.
Manufacturers of all categories were intended to widen the area of study so as to have
a sample that would represent the entire population of the manufacturing industry. In
addition, the main limitation of the study was time, lack of co-operation from
respondents and finance.
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CHAPTER TWO
LITERATURE REVIEW
2.1
VISION 2030
The long term national development goal is envisioned in the “Kenya Vision 2030”
which envisages “A globally competitive and prosperous nation with a high quality of
life by 2030.” It comprises three pillars, namely, Economic pillar which targets
economic growth to be 10% per annum over the next 25 years, social pillar “a just and
cohesive society enjoying equitable social development in a clean and secure
environment,” and political pillar for “ issue-based, people-centered, result-oriented,
accountable democratic political system.” The Kenya Vision 2030 is to be
implemented in successive five-year Medium-Term Plans, with the first such plan
covering the period 2008–2012. At an appropriate stage, another five-year plan will
be produced covering the period 2012 to 2017, and so on till 2030. As the country
makes progress to middle-income status through these development plans, it is
expected to have met its Millennium Development Goals (MDGs) whose deadline is
2015. Some of the goals have already been met. The Vision 2030 spells out action
that will be taken to achieve the rest. [10]
Kenya‟s manufacturing sector is among the key productive sectors identified for
economic growth and development because of its immense potential for wealth and
employment creation as well as poverty alleviation. The sector continues to provide
impetus towards achievement of millennium development goals (MDGs); particularly
goal one on eradication of extreme poverty and hunger, goal seven on ensuring
environmental sustainability and goal eight on Global Partnerships for Development.
The sector is expected to register growth of 10% in the medium term period (2008 2012) through further penetration of local, regional and global markets.
Industry comprises of manufacturing; mining and quarrying; electricity, gas and water
supply; wholesale and retail; services sector; education; agriculture and forestry; and
fishing activities. The sector plan focuses on manufacturing, construction mining and
quarry activities. [16]
Manufacturing is the art of transforming raw materials into either intermediate goods
or finished products through mechanized processes.
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The manufacturing sector in Kenya comprises of:
1. Food and beverages
2. Tobacco
3. Leather products and footwear
4. Timber
5. Wood products and furniture
6. Paper and paper board
7. Pharmaceuticals and medical equipment
8. Chemical and allied
9. Plastics and rubber
10. Metal
11. Motor vehicle assembly
12. Electrical and electronics
2.1.1
CURRENT INDUSTRY SITUATION
Industrialization remains an integral part of the country‟s development strategies. The
manufacturing sector is mainly agro-based and characterized by low value addition,
modest employment, poor capacity utilization and weak linkages to other sectors.
The intermediate and capital goods industries such as metallurgical, petro chemical,
pharmaceutical, machinery, telecommunications and electronics are also
underdeveloped. Most manufacturing firms are family owned and operated. The bulk
of Kenya‟s manufactured goods (95%) are basic products that include food,
beverages, building materials, basic chemicals, among others. Only 5% of
manufactured items, such as pharmaceuticals, are in skill-intensive activities as per
the economic survey of 2007. Compliance to standards to enhance access to markets
for some industries especially micro, small and medium industries (MSMIs) remain a
challenge. [2]
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2.1.2
SECTOR PERFORMANCE
The manufacturing sector has remained at about 10% over the last 5 years; with the
entire industrial activity share of GDP has remained at about 15-16%. The sector
reported an annual growth rate of 5.5% between 2003 and 2007. Manufacturing
activities account for the greatest share of industrial production output and form the
core of industrial activities. The sectors real value added was 6.2 per in 2007
compared to 6.7 per in 2006. The growth was primarily driven by manufacture of
beverages, grain mill products, cement, coffee and cigarettes. The total output value
rose to Kshs. 603.7 billion in 2007 from Kshs. 558.3 billion in 2006 representing an
8.1 % growth.
The sub-sectors which recorded growth were meat and dairy products, canned
vegetables, fruits, fish, oils and fats, beverages and tobacco, petroleum. The growth
was mainly attributed to opening of new processing plants, diversification of
products, increased capacity utilization, construction boom and key measures put in
place to cushion manufacturers against influx of sub-standard goods into the market.
The sector is an important source of employment for the country‟s labour force as it is
one of the key employers. It currently employs 1.88 million people in the formal and
informal sectors. Employment within the formal sector grew by 2.3% in 2007 (from
254,900 people in 2006 to 261,300 people in 2007). The proportion of employees in
the formal manufacturing sector of total employees averaged 15.7% between 2003
and 2007. In 2007 nearly 50% of manufacturing firms in Kenya were employing 50
workers or less. [3]
Manufacturing activities are heavily dependent on the types of technologies locally
available. There is a wide disparity in technology capacity and capability between the
country and the industrialized nation; making competitive production and
participation by Kenyan companies in the globalized market difficult. This is partly
due to inadequate assessment of the potential technological areas that Kenya can
competitively participate in and develop market niches for her products.
Locally manufactured goods comprise 25% of Kenya‟s exports. However, the share
of Kenyan products is only 7% of the US $ 11 billion in the regional market.
Furthermore, most of Kenya‟s manufactured products are not competitive in the
market due to high cost of production and stringent international market compliance
standards. The east African market is dominated by imports from outside the region,
an indication that there is a large potential to improve Kenya‟s competitiveness in the
region by replacing external suppliers gradually.
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The Kenya Ministry of Industrialization has worked out a manufacturing sector plan
which provides an implementation mechanism of the first medium term plan (MTP)
2008-2012 of the Kenya vision 2030. The sectors overall goal in the MTP is to
increase its contribution to Gross Domestic Product (GDP) by atleast 10% per annum.
The sector plan focuses on manufacturing, construction, mining and quarry activities.
The plan proposes a number of projects and programs, including policy measures
aimed at addressing the challenges faced by our local manufacturing industries.
[11]
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2.2
24 HOUR ECONOMY
The twenty-four hour economy plan is a Public/Private Sector collaborative initiative
of the Ministry of Nairobi Metropolitan Development in conjunction with major
stakeholders such as the Nairobi Central Business District Association (NCBDA), the
Kenya Private Sector Alliance (KEPSA) and other private organizations.
Making Kenya a competitive nation is the main objective of the Vision 2030
development plan. However, the specifics of doing so provide a major challenge. The
development of a planned 24-hour economy can serve as a good starting point. By
harnessing our most available resource, (time) we can make the Kenyan economy
more competitive, thereby attracting more investors, both domestic and international.
Vision 2030 also specifically mentions the setting up of a 24-hour economy as a target
of development, with the intention of positioning Nairobi as an all-around 24-hour,
globally competitive business and tourism city whose residents would enjoy a high
quality of life.
Being able to work twenty-four hours a day, seven days a week will ensure that other
resources are utilized more fully, creating greater job opportunities for our workers,
especially the youth, who constitute a major portion of the working-age population. A
lot of resources are left idle at night, particularly machinery, other technical
equipment, and space. When everybody goes home at more or less the same time after
an eight- or twelve-hour day, our combined productivity is not necessarily as high as
it could or should be.[12]
History indicates that the greatest economic growth is driven by an increase in
productivity. A fully operative twenty-four hour economy will enable us to increase
productivity by allowing us to do more with the available space, manpower and
technology. In a country not rich in mineral resources there is a need to focus more on
the one resource that every country has – time. A good starting point for a proper
twenty-four hour economy is the identification of markets, both domestic and foreign,
that will absorb the extra goods and services that we foresee ourselves producing
through the extra hours we add in the economy through added work shifts. We can
begin to identify and create these extra markets by improving our national image and
the quality of our goods and services. It is imperative, therefore, that we follow a
properly planned course: increase the working hours, improve quality, create markets,
and improve national image.
What a 24-hour economy means is that the eight-hour working day can be performed
at any time during a twenty-four hour period for any given work situation. This can
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mean working in shifts (the normal practice being three shifts of eight hours each per
day), or it can simply refer to the ability to work during otherwise „off-hours‟. Even
shifts can be shorter than eight hours each, but that depends on the organization or
company for which one works. These „off-hours‟ include weekends, lunchtimes, early
mornings, and late evenings, and may last an hour or longer. „Shift-sharing‟, „worksharing‟, and „flexi-time‟ are other concepts of an all-around economy that can be
incorporated into the 24-hour economy.
„Flexi-time‟ is another powerful concept and possibility for the 24-hour economy, as
it allows one to work during the times that are most convenient for one, as long as all
the due hours are put in by the end of the work week. In addition, it is possible for
employees to share shifts („shift share‟ or „work-sharing‟) and work as if on a parttime basis, allowing for two or more workers to do the same job but at different times
of the day or week. It means that one works fewer hours per week and gets paid less
accordingly, but it allows for staff retention and diversification, especially during
harsh economic times.
Work-sharing is common practice in Germany and Switzerland, and is becoming
more popular in Japan, where it has helped companies and employees to weather the
storm of economic downturn in recent years. This system can also be referred to as
„shift rotation‟, although there are some slight differences. It enhances staff retention
and permits employees to have adequate off-time while yet contributing to the overall
productivity of the organization. Both methods are very well suited to a 24-hour work
system. [17]
The main objective of the initiative is to unlock the potential of the Kenyan economy,
increase productivity and production, and create employment. As envisaged by the
Vision 2030 plan, Kenya is expected to move closer to the status of an advanced
economy where a 24-hour market system is more the norm. The 24-hour economy is
not a new idea. Some sectors of the economy, such as the security and health services,
already operate 24 hours a day all year long. What is needed is for more sectors of the
economy such as manufacturing to adopt the strategy. This would help to create the
appropriate synergies and momentum that will aid in propelling Kenya towards the
desired global middle income economic status by the year 2030.
While the 24-hour economy is neither a new concept nor a new phenomenon, it is
certainly one that needs to be looked at anew in order to have the right conditions in
place for the good of the people and the entire economy, especially as a new Kenya
emerges.
The 24-hour economy has been in operation in many countries around the world for a
number of decades now, albeit more so in selected cities and regions even in those
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countries than in the entire country. Similarly, there have been several aspects of the
economy, in virtually all countries, which have been operating on a 24-hour basis for
many years, and many of these are well documented. These include hospitals, police
stations, hotels, international airports, radio and television stations, and others.
However, all these are open either out of necessity, or as a result of being more or less
of an emergency nature, rather than due to the demands of round-the-clock living.
This latter is the major driving force behind the development of a 24-hour economy.
In the present study, we looked at 24-hour economy as it has it has developed in a
number of countries around the world, including the United States, the United
Kingdom, the Netherlands, Japan and Moscow in Russia. In this region, Nairobi and
Kampala are known to have a thriving 24-hour system particularly in the transport
and entertainment industries. From these experiences, we can learn to avoid the
pitfalls and mistakes encountered in those sectors, while at the same time extracting
the good points to duplicate and/or adapt to Nairobi‟s manufacturing sector. It will
also allow making informed deliberations and to apply any new measures not
necessarily seen anywhere else that are deemed possible.
The most noticeable 24-hour activity is the opening of large supermarkets and chain
stores around the clock for some and into the late night for others. However, several
other activities do occur on a 24-hour basis in a variety of sectors. Some of the
activities include:
1. Bank ATM services
2. Many banks open beyond 4 p.m. and for several hours during the weekends
3. Hospitals, clinics, pharmacies and other medical services
4. Bars, restaurants and fast food places
5. Long distance transport trucks
6. Trade activities within airports, seaports and border points
7. Private security services
8. Power and lighting provision companies
9. Nightclubs and other entertainment outlets
10. Television and radio broadcasting stations
11. Retail marketing outlets
12. Manufacturing plants
13. Telephone and communications service operators
Currently, the transport sector, particularly cross-country bus transport and largehaulage trucks, which ferry people and goods all over the country at all hours of the
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day and night. City public transport routes numbers 15(to Lang‟ata), 125(to Ongata
Rongai and Kiserian), 46(to Kawangware), 4(to Riruta), 9 (to Eastleigh) and 58(to
Eastlands) in Nairobi are also active virtually all night long.
Security services (police, trained guards, night watchmen), medical services
(hospitals, ambulances, pharmacies, etc.), and nightclubs are further examples of the
on-going informal 24-hour economy in Kenya. Many have been working in the offhours, however, in response to the needs of society for essential services, which has
been the case for many decades.
In addition, quite a number of sectors and industries are easily amenable to 24-hour
operations.
2.2.2
THE MANUFACTURING SECTOR.
Many Kenyan manufacturing industries have been operating on a full-time 24-hour
basis for many decades. It is instructive that a large percentage of these manufacturing
industries are located in rural areas where the concept of a 24-hour economy is largely
ill understood. These include the factories that produce some of the basics if everyday
life, especially in the food industry. Sugar factories (such as Mumias Sugar
Company), tea producers such as Brooke Bond (now part of the Unilever Group) and
Kenya Tea Packers (Ketepa), coffee millers and producers (e.g. Finlays and
Dormans), dairy factories (Kenya Cooperative Creameries, Brookside, Delamere and
others), millers and bakers (Festive, Broadways, Elliot‟s, Supa Loaf, etc.), British
American Tobacco and general food processors such as East Africa Industries and
Sara Lee have been working nights and weekends for many years.
A number of manufacturers of other household and consumer goods also work on a
24-hour basis in order to meet the demands of daily living. The harmonization of all
this activity in a total, streamlined and efficiently planned 24-hour economy is what
has been missing, resulting in an informal and non-coordinated economy which jerks
and shifts according to the whims of owners, managers, employers, and workers.
The country‟s higher education institutions have been turning out lots of bright young
„knowledge workers‟. These knowledge workers (such as engineers, software
developers, web producers and others) can operate for 24 hours. Since working at all
odd hours can present certain problems in the health of an individual, it is incumbent
upon the country to take advantage of its young population structure by incorporating
the ideals of the 24-hour economy into its future planning. Young people are
generally better able to weather the effects of off-hours work. [18]
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21
2.3
ANALYSIS OF OPPORTUNITIES ON IMPROVEMENT IN
MANUFACTURING
(Ref. 8: Strategic plan 2008-2012)
2.3.1 The establishment of the ministry of industrialization.
The establishment of the ministry of industrialization provides an
opportunity to mobilize and prioritize resources for industrialization. It also
brings to the fore issues affecting industrialization in Kenya and provides a
medium for solutions.
2.3.2 Opportunities under Kenya vision 2030.
The vision aspires to transform Kenya into a middle income, rapidly
industrializing country by the year 2030. Under the economic pillar, the
manufacturing sector has been identified as one of the six key priority
sectors in raising the attainment of national GDP growth rate to 10% by
2012. In this regard, the manufacturing sector is expected to increase its
contribution to GDP of at least 10% per annum. This provides an
opportunity for the ministry to take leadership for the development of a
“robust, diversified and competitive manufacturing sector”.
2.3.3 Emerging focus on value addition activities.
Kenya is an agro-based economy which exports primary products. There is
shift to secondary products which have a wider market demand, fetch high
incomes and opportunities for employment creation. Furthermore, value
addition will boost growth in the agricultural sector by stimulating agroprocessing activities.
2.3.4 Availability of key domestic raw materials for local industries.
Kenya is endowed with natural resources which provide raw materials for
local industries. Some of the sectors that provide the raw material include
agriculture, forestry, mining and fisheries. Usage of local materials is
expected to reduce of wastages and improves competitiveness of locally
manufactured products. It is envisaged that through use of locally available
raw materials, the local content of Kenya‟s products will increase
significantly thereby contributing to the medium term goal of 2012 of
reducing imports in key local industries by 25%.
;
22
2.3.5 A strategic geographical location.
Kenya‟s strategic geographical location makes it a major gateway for trade
and investment to the Eastern and Central African region, making it a
regional hub for investment and communication. The port of Mombasa
serves Kenya‟s hinterland as well as Uganda, Rwanda, Burundi, the Eastern
Democratic Republic of Congo and Southern Sudan. The main airport,
Jomo Kenyatta International Airport, is strategically located to serve major
markets within Europe and the Middle East, as well as other African
countries. As a result, the country hosts a number of international
organizations that includes the headquarters of UNEP, UN-habitat, Lake
Victoria Commission and numerous non-governmental and multinational
organizations. This scenario provides the country with enormous
opportunities to develop investment and industry.
2.3.6 Accreditation and membership to various regional economic and
international bodies:
Scale, enhanced competitiveness through increased competition,
improvement in Membership to regional economic and international bodies
provides accessibility to wide range of products and wider market access.
This provides an opportunity for economies of transfer of technology and
attraction of foreign direct investments.
2.3.7 The presence of Kenyan missions abroad:
Market access can be enhanced through utilization of economic
opportunities availed by existence of Kenyan missions in other countries
for information gathering on export markets, consumer tastes and
preferences, quality standards requirements and other market intelligence.
2.3.8 Availability of human resource development institutions
Kenya has many educational institutions, both private and public, which
provide quality education. Over the years the institutions have been able to
train a pool of qualified personnel who are useful for industrialization.
Moreover, several middle level training institution are partnering with local
and foreign universities to offer degree programs thereby deepening
available opportunities for higher learning and acquisition of skills.
;
23
2.3.9 The emergence of a dynamic consumer tastes and standards.
Consumer tastes and standards are dynamic and entail production
opportunities to industrialists. This will encourage manufacturing firms to
innovative in order to satisfy the changing consumer taste and standards.
2.3.10 Emergence of consumer lobby groups.
Emergence of consumer lobby groups provides an opportunity for quality
control by creating awareness on substandard goods. These lobby groups
question the quality of products and ethical production practices in
industry. Manufacturers therefore, have to strive to meet international
product quality standards.
The effectiveness of the Vision 2030 strategy will depend on how well it recognizes
and interfaces with other plans aimed at achieving it, such as the Nairobi Metro 2030
strategy. Nairobi Metro 2030 is part of a wider effort aimed at moving Kenya into a
middle-income economy by 2030. Its vision is to transform the Nairobi Metropolitan
Region into a World Class African Metropolis. The vision is pursuant to the
achievement of Vision 2030.
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24
2.4
EMERGING ISSUES AND CHALLENGES
[Ref 15: 2nd Annual progress report]
The performance of the manufacturing sector has been on the decline for a
considerable period of time and its contribution to the GDP has remained stagnant at
10%since the 1960s. Some of these challenges are sector specified whereas others are
cross cutting hence requiring closer collaborations between sectors. The following are
the issues and challenges that have contributed to the decline growth:2.4.1 Narrow export base and low value addition.
Most industries are still engaged in the production of low value-added and
limited range of products due to limited technological capability and
limited information on international trade opportunities. Over-reliance on
the few traditional exports has, over the years, led to destabilizing
fluctuations in foreign exchange earnings. This is despite the country
pursuing an export led growth strategy. These factors have contributed to
limited scope for product diversification and expansion of the export base.
The narrow product range and focus on a few markets have restricted the
growth of Kenya‟s exports.
The Kenyan manufacturer, especially the MSMI, is faced with challenge of
meeting increasing global customer demands on packaging that encompass
aesthetics, convenience, sizes, labeling, environment, and cost effectiveness
among others. Kenya is known to produce quality products that are unable
to compete even in our local market shelves with imports – of the same and
sometimes inferior quality – such as fruits, honey, juices, and soaps because
of poor and unattractive packages.
2.4.2 Influx of sub-standard, counterfeits and contra-band goods.
The entry into the local market by substandard, counterfeit and contraband
products has unfairly reduced the market share for locally manufactured
products. Counterfeit trade has also discouraged innovation initiatives and
reduced the government revenue base, while some products are a health
hazard to consumers. Although the Anti-counterfeit Act 2008 became law,
the different aspects of counterfeits are handled in a disjointed manner,
using several pieces of legislation. There is need expedite the establishment
;
25
of an Anti-Counterfeit Agency (ACA) to address this issue in a harmonized
and effective manner.
2.4.3 Poor, inadequate and costly infrastructure.
Inadequate, unstable and costly supply of energy in Kenya has led to low
productivity, high production and distribution costs; and uncompetitive
products and services. This has resulted to investors installing power
regulators and/or large power generators. Further, the poor dilapidated state
of infrastructure, especially road and rail, has aggravated the problem. The
concentration of road networks in a few urban areas with limited feeder
roads in regions with resource endowments has resulted in the
agglomeration of industries in areas with good road networks thus further
creating disparities in regional industrial development.
Limited in the availability of clean water in the required quantities and
quality levels are a major constraint to industrialization. Making the
situation worse is the fact the development of water supplies has not been
matched by a corresponding increase in facilities for sanitary disposal of
wastewater, leading to increasing pollution and general environmental
degradation. Destruction of water catchments has compounded the
inadequacy of water for domestic and industrial use and energy generation.
Similarly, the discharge of waste water, agricultural and domestic runoffs
into water bodies leads to high pollution levels. The poor management of
sewerage disposal and waste products from industries is adversely affecting
the environment. In addition, the main sewerage systems suffer from
constant breakages and leakages.
2.4.4 Informality, poor sustainability and graduation of MSMIS.
The MSMI sector contributes substantially to the GDP and employs
millions of Kenyans. However, majority of the micro and small industries
are informal and characterized by a high mortality rate. The MSMIs
business environment is exacerbated by the fact that Business Development
Services (BDS) are not readily available and affordable to most MSMIs.
Due to the concentration of formal (large) firms in major towns, and the
informality and rural base of most MSMIs, there are weak linkages,
inadequate BDS and few subcontracting arrangements with the medium
and large firms. In addition, the growth and graduation of the MSMIs have
difficulties in realizing their potential due to a number of factors;
- Poor market access
;
26
-
Restrictive legislation and regulation
High cost of credit
Poor infrastructure
Restricted access to land
2.4.5 Low technology and innovation uptake
The bulk of the firms in Kenya‟s manufacturing sub-sector use relatively
old technologies. Moreover, only 7% of its manufacturing technologies are
sourced within the country. The rest, 93% is imported, thus making
importation of affordable and modern technology a major challenge.
Therefore, for the manufacturing sector to become competitive there is an
urgent need for establishing modern engineering design and development
units locally.
The lack of knowledge, high cost and fear of change has led to low
technology uptake. Similarly, there are weak linkages between the
technology and research providers and the market. Further, low funding for
R&D has also contributed to poor adaptation of technology. In addition,
there is lack of institutionalization of incentives for promotion and efficient
use of existing knowledge and creation of new knowledge that would spur
entrepreneurial activities which will increase the capacity and
competitiveness of local firms. Inadequate awareness of the role of
intellectual property rights in fostering socio economic development is
hindering the commercialization, registration and protections of new
innovations in the manufacturing sector and patent mining for technological
development.
2.4.6 Weak policy, legal, regulatory and institutional framework.
Registration of businesses (incorporation/business name) is still centralized
in Nairobi. Similarly the commercial courts are in Nairobi and lack capacity
of expeditious disposal of cases and disputes.
Though the single business permit has been introduced and has thus
reduced the number of local licenses, it is still costly and cumbersome to
register and operate a business in Kenya. Efforts to develop a „one-stopshop‟ for business licensing, registration and taxation by the Kenya
Investment Authority have not been finalized. Further, there is lack of
capacity within the judiciary to handle e-trade related litigation.
;
27
Weak governance creates inefficiencies and bureaucratic delays in service
delivery because of rent seeking. This has increased the cost of doing
business, led to mistrust, and uncertainty in taking up trade opportunities.
2.4.7 Inadequate capacity to meet product quality standards and ISO
certification
Rapidly changing consumer needs, preferences and quality requirements,
both locally and internationally are creating a strain for many Kenyan
manufacturers, especially MSMIs. ISO certification can guarantee
international competitiveness but awareness among MSMIs on the process
and benefits is still low. However, the capacity for many Kenyan
manufacturers to undertake and implement ISO certification requirement is
low. In addition, the capacities of certifying organizations are inadequate
and the process of certification is still too costly a majority of Kenyan
firms.
2.4.8 Declining local and foreign direct investments
In the last decade, both local and foreign direct investment (FDIs) in Kenya
has been on the decline, whereas the investment rates of neighboring
countries have been rising. This could be attributed to Kenya‟s poor
business environment, which has caused many business enterprises to scale
or close down, or simply relocate to other countries with better business
environments.
In addition, local investments have declined due inadequate mobilization
of local resources for investment and poor incentives.
2.4.9 Weak industrial linkages and collaboration
The sector requires collaboration and synergistic linkages with several
agencies including Government ministries and departments, the private
sector, the civil society and development of the industrial sector. However,
there are no formal mechanisms to support these arrangements. These need
to be developed, strengthened and sustained.
2.4.10 Limited access to financial services.
High cost and lack of access to formal financial services such as credit
products and trade guarantees have inhibited the competitiveness and
growth of MSMIs both in rural and urban areas. In addition, insurance
premium are generally too high and unaffordable to most businesses. The
current financial products available are mainly short and medium term
;
28
loans; however, industrial development requires long term financing. This
has limited the availability of finance for industrial development. Besides,
the level of interest rate spread is high and this has kept the cost of doing
business in Kenya relatively high.
2.4.11 Limited technical and managerial skills
Strategic management and technical skills are not developed in a wellstructured and coordinated manner and are virtually absent in MSMIs.
There is also a mismatch between available technical skills and market
demands due to poor linkages between training institutions and industry.
2.4.12 Weak public private partnerships.
The Government policy embraces the private sector as the engine for
economic growth. Nevertheless, there is disharmony and a lack of
constructive dialogue between the private and the public sectors. This
absence of partnership opportunities has contributed to skewed
development initiatives, duplication of efforts and the development of
policies that are not responsive to the needs of private sector.
2.4.13 Insecurity.
The high crime rate has forced manufacturers to hire extra security, install
CCTVs, and other security devices and this has increased production and
distribution costs. The high crime rate has partly contributed to the
relocation of investors to other countries and reduced foreign direct
investment.
2.4.14 Unbalanced regional industrialization.
Kenya‟s manufacturing sector is mainly agro-based. Most of the industries
are located in urban and pre-urban areas whereas the raw materials for these
industries are sourced from rural areas. The concentration of industries in
urban areas has resulted to lack of dispersion of industries to rural areas,
leading to regional disparity in development, rural-urban migration and
sub-optimal utilization of natural resources.
2.4.15 Inadequate capacity for quality service delivery.
The sector is faced with several challenges affecting its performance,
including inadequate field representation, limited ICT connectivity and
inadequate budgetary provisions for effective service delivery.
;
29
2.4.16 Low adoption of ICT industries.
The low levels of penetration and high cost of ICT infrastructure has
hindered access and usage leading to low access to markets and
technological information and increased cost of marketing and
communication.
2.4.17 Overlaps and ambiguity in mandates and functions.
Lack of clear boundaries on the mandates and functions of ministries and
agencies has caused distortions in the value chain, weak sectorial policies,
overlaps and conflicts in policy implementation. The ambiguities have been
detrimental to the development of the sector in terms of coordination and
improvement of manufacturing and market efficiencies.
2.4.18 Environmental challenges.
Air and water pollutants have in recent years resulted in an increasing
health burden on the population. Unfortunately it is the poor who are
particularly vulnerable to industrial pollution and who often live and work
in close proximity to polluted environments. Air pollution results mainly
from industries and although the quality of air in Kenya is not regularly
monitored, it is estimated that it is below the WHO recommended levels.
For example, the PM10 pollution level in Nairobi is estimated at 42µg/m3;
attributed mainly to high concentration of industries and vehicles in the
city. Pollution and waste flows threaten the health of important ecosystems.
The need for efficient production and end of production chain management
will lead to improved management of pollutants and wastes if we are to
obtain the clean and healthy environment envisaged in vision 2030.
2.4.19 Effects of global recession.
The global recession has negatively affected local industrial performance.
The recent upsurge in energy prices, exchange rate fluctuations and selloffs
at stock markets, has increased production costs, significantly reducing the
profits or even leading to losses. This has forced firms to lay off workers,
especially casuals. In most cases the firms have had to scale down on their
operation in order to contain the situation. This whole scenario is reflected
in the current high commodity prices. The unemployment situation is
worsened.
The local economic scenario has been aggravated by a drop in donor
inflows, which gas negatively impacted on government and NGO revenues.
The crunch in public sector revenues has led to increasing government
;
30
borrowing, which has in turn put pressure on interest rate to remain high
and thus further worsened the cost of doing business in Kenya.
2.4.20 Post-election violence.
The post-election violence destabilized the labor and other factors of
production, hence the production and supply chains. Production was
interrupted as it was not possible for workers to report to work due to lack
of transport, displacement and insecurity in most parts of the country.
Property and business premises were burnt, leading to huge business losses.
The Kenya Association of Manufacturers estimated that the economic
losses due to the post-election violence amounted to about Kshs 170 billion
in the first six months. Increased production and distribution costs resulted
from interrupted fuel supply and hiring of extra security personnel. Investor
confidence was lost due to resultant poor image of the country.
2.4.21 HIV/AIDS pandemic
It is a widely acknowledged notion that good human health is an important
factor of production as it affects productivity of the labour force in the
different economic enterprises, including manufacturing. The prevailing
pandemic has profound social and economic implications. As a result, this
has lowered productivity in manufacturing enterprises through the loss of
manpower and diversion of financial resources to consequent additional
health care expenses.
2.4.22 Gender issues.
The existing laws on gender parity provide for equal rights and privileges
for both men and women. It has been established that, for the various
activities within the manufacturing sector, women contribute substantially
to the labour force but are confined to lowly-paid jobs. To address this
dichotomy, an effective gender sensitive approach in designing and
implementing various interventions in manufacturing programmed
initiatives should be developed, focusing on both equality and equity.
Emphasis should be on how gender dimensions can be harnessed for
enhanced industrial productivity.
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31
CHAPTER THREE
RESEARCH METHODOLGY
3.1
INTRODUCTION
Research is defined by the shorter oxford dictionary as the act of searching closely or
carefully for or after a specified thing or person; an investigation directed to the
discovery of some fact by careful study of a subject and a course of critical or
scientific inquiry. [7]
The outcome of a research project maybe intended to solve a problem existing in
society or business, or to gain information which will be critically analysed prior to its
practical application in problem solving process.
Research methodologies should be both sound and appropriate. Unsound or untested
methods of conducting research may result in: Time wasting
 Incorrect or insufficient information
 Misleading conclusions being drawn based on interpretation of the so called
resource findings
The data collected was to be used to fulfill the objectives of the study as well as to test
the hypothesis. This chapter lays down the procedure that was adopted in this
research. This chapter illustrates; the study area, the population, sample, data
collection instruments, data collection procedures, data analysis and presentation and
constraints encountered during this study.
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32
3.2
RESEARCH DESIGN
The research used the descriptive survey method for collection of the required data. In
descriptive research the problem is structured, well understood and the research
problem to be solved is set out clearly. [4]
A survey is an attempt to collect data from the population in order to determine the
current status of that population with respect to one or more variables. It requires the
collection of quantifiable information from the samples that describe the phenomena
by asking individuals about the perception on certain variables. [5]
The research design is the conceptual structure within which research is conducted. It
is the blue print for the fulfillment of the objective of the study. It is also the outline
plan that sees forth the conditions for the collection, measurement and analysis is
done in order to generate the answers to the research problems.
The design in this study was appropriate in enquiring from the manufacturing
industries on the challenges they face on implementing the 24 hour system and the
strategic plans on achieving in achieving this in line with vision 2030.
3.3
THE DATA
The two type of data used in this research are primary and secondary data.
3.3.1
The primary data
The primary data comprise data collected using a questionnaire circulated to stake
holders in the manufacturing industry in Nairobi. These were manufacturing
companies in Nairobi, Suppliers of locally manufactured good (i.e., supermarkets,
wholesalers) and organisations related to manufacturers.
3.3.2
The secondary data
The secondary data in this research was drawn from relevant information existing in
the public domain relative to the improvement of the manufacturing economy as well
as in other industries, sourced from a range of publications, including but not
restricted to newspapers, the internet, textbooks, journals and conference papers.
;
33
Press reports, information downloaded from the internet, content located in technical
and legal textbooks and the work of other researchers presented in conference papers
have provided substantial support during the preparation of this research.
Information specific to local manufacturing economies, upcoming factories, major
challenges hindering growth in the industries and the policies are not readily available
but all the mentioned factors have been widely reported by numerous researchers.
3.4
STUDY AREA
The research considers the manufacturing industry in Nairobi.
3.5
POPULATION
The population of this study consists of the following groups:




3.6
Manufacturing companies
Suppliers
Ministries
Engineers
Related organizations
SAMPLE
The sample was selected using the non-random techniques of convenience sampling.
A short list was drawn up from all the related sectors (manufacturers, suppliers,
ministries and organizations)
3.7
DATA COLLECTION INSTRUMENTS
The data for the research was procured through the unstructured questionnaire
administration method and interview method.
;
34
3.7.1
Questionnaire
This was the main method of collecting data for this study. A combination of closed
ended and open ended questions was used. They were administered to the
manufacturers, engineers, suppliers, supermarkets and related organizations.
They were all served with a similar questionnaire since they are related in their
activities.
3.7.2
Interviews
Unstructured interviews were used to find out from the manufacturers, their
accountants, marketers, security companies like the G4S, suppliers ,supermarkets,
engineers, technicians and other related organizations (the Kenya Association of
Manufacturers, Kenya bureau of statistics, federation of Kenya employers etc.) as
well as lecturers in the school on engineering, fellow students in the department of
mechanical and manufacturing.
The approach was used to enhance the carrying out of the study since what could not
be verified through questionnaires was checked through interviews.
3.8
DATA COLLECTION PROCEDURE
The data collection for the study was undertaken by means of administration of the
questionnaires and oral interviews. The questionnaires were hand delivered and their
collection was done at the convenience of the respondents. In most of the situations,
the respondents were prompted and cooperative. Collection was done later in
situations where the respondents were faced with unavoidable circumstances.
3.9
TREATMENT OF DATA
The data was analyzed to determine the general opinion and perceptions prevailing in
the 24 hour economy in manufacturing industry in Nairobi. The data was analyzed
and interpreted based on the information collected and responses to questions posed
;
35
during personal interviews, which were drawn from observations made in the
manufacturing industry and literature review.
The data was analyzed quantitatively and qualitatively. The qualitative data obtained
by way of the open ended (unstructured) questions were presented by way of
discussions. Quantitative data collected with the aid of questionnaires was analyzed
using descriptive statistics in the form of frequency distribution tables.
Graphical presentation of the analyzed data was then undertaken by way of bar and
pie charts to facilitate ease of interpretation to the researcher as well as ease of
understanding by the readers.
3.10
CONSTRAINTS
The major constraints to effective compilation of data in this study were:
 Some of the questions in the questionnaire were left unanswered
 Scarce of statistical information regarding which companies are already
operating on a 24 hour basis
 Most of the questions could not be answered by just any person in the
industry; they needed top managers which were hard to meet or answer the
questionnaires
 There was no enough funding for intensive research on the project.
;
36
CHAPTER FOUR
SURVEY FINDINGS AND DATA ANALYSIS
4.1
RESPONSE RATE
Forty five questionnaires were circulated to manufacturing industries and other
players in the sector such as the Ministry of Industrialization, Ministry of planning,
and also some of the supermarket chains that had tried the 24-hour economy concept
in their operations with a request to each of them to participate in the survey. Table
4.1 indicates that of the 45 questionnaires circulated, only 32 questionnaires were
returned properly filled representing 71.11% response rate which is above average
and very encouraging.
Table 4.1: Response rate
Questionnaires
circulated
Questionnaires
returned
Response rate
45
32
71.11%
As for the 29.89% non-returned questionnaires, these can be attributed to the
unwillingness or the inability of the respondents to timely complete them at the
researcher‟s convenience. Another reason for the non-return is the negative attitude of
potential respondents and the perceived chore of having to complete questionnaires
from any source, or alternatively a poor attitude towards research.
;
37
4.2
FINDINGS
The results in Table 4.2 illustrate that 78.125% of the respondents were from the
manufacturers, 9.375% from the ministries involved and the rest from the suppliers of
manufactured products. We also did verbal interviews to the general public so as to
get their opinions on the implementation of the 24-hour economy in manufacturing.
4.2.1
Categories of the respondents
Table 4.2: Respondents by category
respondents
frequency
Percentage
Manufacturing
industries
25
78.125%
Ministry staff
3
9.375%
Suppliers
4
12.5%
Total
32
100%
4.2.2
Experience in the manufacturing industry
Table 4.3: Experience in the industry
;
Time period
Frequency
Percentage
1 – 4 years
3
9.375%
5 – 9 years
6
18.75%
10 – 14 years
15
46.875%
15 and above
8
25%
Total
32
100%
38
Table 4.3 shows that 46.875% of the respondents had an experience of working in the
manufacturing industry of between 10-14 years, 25% had an experience of 15 years
and above. 18.75% of the respondents had an experience of 5-9 years while 9.375%
had an experience of between 1-4 years.
The above results show that the respondents had enough experience to know what
was happening in the manufacturing industry hence we could rely on their feedback.
The period the respondents have been in the industry was determined using
interviews.
4.2.3
Awareness of the Government’s involvement in the promotion of 24
hour economy in manufacturing.
i.
ii.
iii.
All the respondents were aware of the government‟s involvement in
promotion of the 24 hour economy in Nairobi.
From the questionnaire together with the interviews carried out, a total of
60 respondents were obtained
The sample clearly showed that the government is not too involved in the
promotion of the 24 hour economy in the manufacturing industry.
Frequency
Percentage
Quite involved
7
11.66
Fairly involved
18
30
Not good enough
32
53.33
Poorly involved
3
8.33
Total
60
100
Table 4.4: Awareness of government involvement in promotion of 24 hour economy
;
39
Government’s Role in protecting local manufacturing industries
4.2.4
In this section, the respondents were asked to state what role they felt the government
was playing in protecting the local manufacturing industry and the policies that had
been put in place to ensure a successful implementation of the twenty-four hour
economy in the sector. Some of the responses were:
i.
Restriction of cheap imports – some of them thought the government was
trying to restrict cheap imports from China, India etc.by either banning that
particular product or by excessively increasing import tax to discourage
imports of such products.
percentage
don’t restrict
restrict
30%
70%
Figure 4.1:Percentage restriction of the imports by the Government
70% of the respondents thought the government is restricting cheap imports from
abroad while the other 30% thought nothing was being done.
;
40
;
ii.
Incentives to 24-hour manufacturers – the response to this was since
working on a 24 hour shift would lead to increase in costs such as
electricity, water and telephone bills, salaries and wages, etc. Businesses
must be able to cover these expenses in order to justify staying open late.
Usually this is done through greater sales, etc. However, government can
encourage the growth of a 24-hour economy by providing such incentives
by providing tax breaks (e.g. lower taxes and/or tax rebates for staying open
longer than twelve hours per day), energy subsidies and wage subsidies,
etc.
iii.
Lower tax rates for local company‟s raw material imports–the
respondents thought some of the imports they imported for processing was
actually reduced on taxes thus giving them an upper hand cost wise which
reflects on other operations. This encourages manufacturers to increase
imports of the raw materials which in turn can lead to companies increasing
their shifts to 3 on a 24 hour basis.
iv.
Better policies in investment– the government reduces interest rate on
loans taken for establishment of a manufacturing industry.
v.
Policies in implementation of technology – government encourage
manufacturers on the implementation of technology both on the machining
processes and the administration. This increases production and makes
information conveying a lot faster down the managerial hierarchy.
vi.
Providing patent and arbitration for local inventions – such a practice
protects the local manufacturing industry from foreign companies stealing
the designs or ideas and using them for their benefits. It also ensures
production is done within the country that can lead to its production in 24
hour shift if the market is properly established.
41
;
vii.
Encouraging heavy involvement in regional trade organizations
(improvement of market access) –e.g. EAC, COMESA and the EU.The
government encourages or even organizes seminars and events for
manufacturers and other related businesses or promoting local products in
neighboring countries. This creates a market for local products which
enhances the chances of companies operating on 24 hour shift due to the
increased demand.
viii.
Provides a good business environment to operate in – they do this by
beefing up the security i.e. increasing patrol cars during the night, having
an emergency calling line for quick response, putting up street lights,
creating good road networks In and out of the industrial area, working with
NEMA to ensure a clean environment within the industrial area is
maintained.
ix.
Encourages public-private partnerships – this is the process of deepening
constructive dialogue with the private sector. This in turn provides
opportunity for coordinated development initiatives while also avoiding
duplication efforts and ensuring the development of policies that are
responsive to the needs of the private sector.
x.
Funds big important projects – the government sometimes helps in
funding big projects for industrial development as the current financial
products are mainly short and medium term loans while industrial
development requires long term financing. Though a high percentage of the
respondents thought the government does not help much on the financial
part, some thought there have been a few cases where the government has
helped.
42
xi.
Encourages companies to set up a research and development department–
the government encourages research in companies which leads to
modernizing the technology that is outdated and is used in most of the
industries in Nairobi. This also includes collaborating with stakeholders to
strengthen science, technology and innovation (STIs) institutions. Finally,
the need to commercialize the research findings and value addition and
product diversification which will create a larger market for local products
thus the need for a 24 hour operation of companies.
Strategy
Outcome
Outcome indicator
Encourage technology
Increased productivity
adoption and implementation
Percentage increase in
industrial productivity
Commercialization of
research findings
Increased productivity
Percentage increase in
industrial productivity
Value addition and
diversification
Improved
competitiveness
Percentage increase in
market share
Table 4.5: Strategies in Research and Development and their outcomes
;
xii.
Works on attracting/encouragingdirect andforeign industrial
investments–the government does this by benchmarking local industries
with international standards, develops a framework for industrial
incubation, designing new approaches on provision of security,
development of niche products i.e. products that Kenya do not manufacture,
improvement of access to affordable finance and credit facilities/
xiii.
Promotes the local industry by giving them tenders for their projects – the
government mostly issues big tenders (apart from the Thika highway) to
local industries thus creating jobs and the need to operate in a 24 hour basis
to meet deadline or avoid traffic jams in the case of road construction.
43
xiv.
Establishes policies, legal and institutional framework for
industrialization that helps in the 24 hour economy –
a) Government is at the moment developing the National Industrialization
Policy (NIP) and legal instruments that will provide a road map and give
necessary guidelines on industrial development, linkages and
collaborations.
b) They are also trying to liaison with the ministry of finance on the
development of an investment policy.
c) They are also trying to develop and implement an industrial master plan
d) Development of an industrialization bill is also in place
e) The government is also fast tracking the enactment of an anti-counterfeit
act.
f) It‟s also working with the ministry of Finance to fast track the review of
the restrictive trade practices, monopolies and price control act.
xv.Introduced the 24 hour port cargo operation which helps in companies
getting raw materials faster – this, according to the respondents is a very
crucial factor that determines all operations in a factory and meeting deadlines.
It is also crucial if the manufacturing is to go on a 24 hour basis then the port
will have to operate on a 24 hour basis as well.
xvi.Recently introduced the online processing of financial tax documents–This
is part of the implementation of ICTs that would ease congestion and make
processes effective.
;
44
4.2.5
Are products produced for local, export or both?
both
export
local
28.125
percentage
9.375
62.5
Figure 4.2: Percentage of goods sold locally and exported
As clearly shown in the chart, 62.5% of the goods produced in Nairobi are for local
market, 28.125% of the goods produced are both local and export markets while only
9.375% of the goods are only for the export market.
This indicates the potential the local manufacturing industries have if efforts can be
made on tapping the export market; this thus helps in manufacturing industries
working on 24 hour basis in a 3 shift per 24 hours.
4.2.6
Causes for drop in demand for locally manufactured products
In this question, the respondents were asked to state what they think causes a drop in
demand for locally manufactured goods or rather why people prefer other products
than the ones produced locally.
The responses were as follows:
 Poor quality of production
;
45





Poor marketing tools
Competition from cheap imported products
Mentality of citizens on imported products (poor attitude on local products)
Very high prices of local products
Poor designing (lack of appeal)
Most of the companies were able to acknowledge these causes, they were then
interviewed on their thoughts on what they think which among the causes affect the
demands. This is as shown in the charts below
most likely
likely
least likely
58
lack of appeal
35
7
6
very high prices for local products
10
84
15
poor production quality
55
30
76
competition from cheap imports
22
2
28
poor marketing strategies
60
12
10
poor attitude of consumers
21
69
Figure 4.3: Likely causes of drop in demand for locally manufactured products
;
46
i.
ii.
iii.
iv.
v.
vi.
;
From the chart, it can be observed that most of the local products lack
appeal to the consumers with a 58% most likely and another 35% likely
meaning most of the locally produced products need to be improved in
terms of design in order to raise the demand for locally manufactured goods
thus leading to the need for a 24 hour shift.
It could be seen that high prices for locally manufactured goods is not the
main reason why there is a drop in demand with 84% of the respondents
thinking it‟s highly unlikely.
Poor quality of production was also found to a main cause since 55% of the
respondents thought it was likely, 30% went for the most likely while the
remaining 15% thought it was unlikely since they produced goods that were
of good quality.
Competition from cheap imports was found to be the main cause of drop in
demand for locally manufactured products as 76% of the respondents
thought it was most likely and another 22% likely with only 2% thinking it
is unlikely.
Poor marketing strategies is one of the main causes as 60% of the
respondents thought it was likely and 28% thinking it was most likely while
only 12% thinking it was unlikely. This could be due to poor advertising
and thus consumers not aware of the products and how good they are.
Poor attitude of consumers towards local products was not thought of as a
strong point as 69% of respondents thought it was least likely though 21%
and 10% thought of it as likely and most likely respectively.
47
4.2.7
Will the shift to 24 hour operation help other sectors?
In this question, the respondents were asked whether they thought the implementation
of the 24 hour would help the other sectors of the economy in Nairobi.
A chart showing how they responded is shown below:
unlikely
likely
most likely
2
23
75
Figure 4.4: Response as to whether 24 hour manufacturing will help the other sectors
From the chart, it can be observed that 75% of the respondents believed it is most
likely other sectors in the economy would be improved from the various reasons that
will also be analyzed ahead. 23% of the respondents thought it was likely while only
2% thought it was unlikely.
;
48
4.2.8
How has technology affected the adoption of the 24 hour economy in
the manufacturing industry?
In this question the respondents were asked if how technology had affected the
adoption of a twenty four hour economy. Some of the responses were as follows:
i.
ii.
The connection of Kenya to the rest of the world through the optic fibre
cable has led to faster internet speeds hence better communication and
aiding in research and development.
The use of Computer Numerical Controlled equipment has helped in
automation and robotization in industries brought about by adoption of
latest technology helps in:
a) Reducing wastage since they are more accurate
b) Faster production
c) Better quality in produced goods
d) Decreases lead time
e) Flexibility of product design
Some of the technologies applied are automated handling equipment, computer aided
design (CAD), computer aided manufacturing (CAM), Just-in-time manufacturing
(JIT), and Total Quality Management (TQM).
4.2.9
What other sectors affect the adoption of the 24 hour economy in the
manufacturing sector and how
From the survey, the following was observed:
Water and Waste
Mgt.
4%
Health
9%
Security
34%
Energy
30%
Transport
23%
Figure 5: Effect of other sectors
;
49
i.
ii.
iii.
iv.
v.
vi.
vii.
viii.
;
From the chart, 33.6% of the respondents said that security was the major
factor to aid in the adoption of this kind of economy. Everybody desires a
good level of security in order to work or do anything. People need to feel
secure whether it‟s at the workplace or their way to and from work.
23.3% of the respondents said that transport was also a major hindrance.
Public transport needs to be smooth, efficient and on time at all hours.
There also needs to be an overhaul in the transport network to get rid of
traffic jams that take takes too much of man-hours that could be used at
work.
30% of the respondents said that energy was also a major factor to consider.
Currently Kenya has a shortfall in the energy supply and with the increased
production, something needs to be done to meet the extra demand brought
about by the extra hours.
9.2% had health as one of their concerns. There needs to be an effective and
efficient health system that will cater to the workers needs all day and night
and also respond to emergencies in time
With an increased production, there is bound to be extra demand for water
to be used in the industries and also a marked increase in waste products
from the industries. 4.2% of the respondents said that there was need to
revamp the current water and waste system for it to be implemented.
From the secondary data, some of the factors that were also found to affect
the adoption of the 24 hour economy in manufacturing were:
Financial and investment services- there needs to be access to financial
services for smooth flow of transactions. Also, access to loans is important
so that businesses can expand their capacities.
Social welfare- employees need to have places where they can relax
mentally, physically and spiritually to prevent burnout caused by the
extanded working hours.
50
4.3
ANALYSIS
From the analysis above, a lot needs to be done so as to achieve the 24-hour economy.
The many shortcomings in the manufacturing sector and other sectors affecting it
need to be addressed to help in achieving the goals of the Vision 2030.
From our study, in order to develop an effective 24 hour economy for Nairobi‟s
manufacturing sector, the plan has to consider a variety of needs, and the
requirements of people in all situations. This is important so that life continues to be
appropriately livable even with the changes involved. With the successful
implementation of these factors, it is easy to move to other sectors of the economy
and the rest of the country.
4.3.1
The Manufacturing Industry
Since our main focus was on the manufacturing sector, it is only reasonable that the
sector itself leads in the adoption of a twenty-four hour economy. Currently, not all
industries operate for twenty four hours due to the factors discussed in the previous
chapter. There is need to come up with ways in which the sector can be a key player
and make the most out of the Vision 2030.
The various stakeholders should come together and plan for the sector as a whole,
taking into consideration all companies and organizations. Some of the suggestions
are:
a) Institute 24-hour shifts (three eight-hour shifts, seven days a week) in all
industrial activities
b) Initiate night-shift allowance payments to attract off-hour workers
c) Start and finish times of each eight-hour shift or its variation should be
determined by the individual organization or company depending on
how they are suited.
d) Opening up industrial areas in the major towns of Nairobi metropolis
operating 24 hours.
e) KEBS to make sure all products and services are of high quality and
competitive with the best global standards.
f) KEBS should liaise with international regulatory bodies
g) Invest in research on demand for products both locally and abroad
h) Improve on quality in order to create extra demand and sell larger
quantities of their products
;
51
i) Invest heavily in creation of local(domestic) demand
j) Provide adequate and safe transport for employees at night and other
non-standard working hours
k) Provide physical, fiscal and other incentives for the operators in the
informal sector to stay at work for extended hours
l) Connect the informal sector to the formal sector in terms of
communications, financing, advertising and other logistical means so as
to bridge the gap.
m) Support the computerization of the informal sector
n) Install safety and security equipment in all workplaces so as to create a
conducive environment. Inspection and enforcement of health and
safety must be enhanced. OSHA and NEMA related offices should
operate 24 hours.
o) New policy guidelines should be issued for night shift allowance and
overtime
p) Premiums by insurance firms to the industries can be controlled by
legislation
q) Dispute resolution in the industry should be sped up
r) Wage payment should be pegged on productivity
4.3.2
Security
From our survey, lack of security is the main stumbling block hindering full-fledged
24-hour operations in all economic sectors. This is the most important issue related to
the performance of the 24-hour economy.
Security is a special incentive that cuts across all aspects of economic activity.
Everybody desires a good level of security in order to do any particular thing and
government provision or encouragement of this is a specific duty that must not be
under-estimated. A „uniformed presence‟ often is the only deterrent needed against
criminal types to make people feel safe.
In Nairobi, it is a common occurrence for people to be accosted and mugged as they
alight from or board buses and other forms of transport in the wee hours of the
morning and late at night.
Some of the suggested solutions to improving the state of security in Nairobi are:
a) Increase all forms of policing around the clock, including evening and night
time foot and motor police patrols.
b) Improve street and security lighting
c) Install security and surveillance cameras on all streets.
;
52
d) Make emergency response and rescue a part of all security training,
operations and implementation
e) Install emergency alarms in every building, for police, fire, paramedic
response and others
f) Provide uniformed security at every major transport inter-change and
termini
g) Introduce Metro Police forces in Nairobi
h) Install direct links between the various emergency and security services
including cameras (in liaison with private firms like G4S, KK Security,
etc.)
i) Establish central information dissemination points as part of public security
system
j) Install security cameras in all bus, train and matatu stops and at transit
depots and stations
k) Monitor security at bank ATMs, stations, traffic lights, etc.
l) Increase the number and positioning of police stations and posts all over
Nairobi Metropolis
m) Improve housing, facilities and offices of police to assist with late-hour
opening and patrols
n) Increase 24-hour patrolling in all areas
Figure 4.6: Police on patrol
;
53
o) Increase fire, emergency, safety, paramedic and first aid points in Nairobi
p) Install automatic toll collecting and paying points at all toll stations
(airports, highways, ports, etc.) to help develop a 24-hour operation in all
such places
q) Install CCTV cameras in all major buildings, along highways and other
important roadways, and in alleyways and ensure that the contents are
monitored and viewed by security authorities on a regular basis
r) Create awareness of security
s) Also creation of neighbourhood watches is an aspect of security that could
go a long way in overcoming the burden of crime. This is done in
collaboration with the police so that there is no misunderstanding as to who
is doing what and why. They could be effective in both business and
commercial neighbourhoods, and would be useful in augmenting Nairobi‟s
often lax security system.
4.3.3
Government incentives
Being open late or all night means more expenses for business enterprises, no matter
the type. Costs include electricity, water and telephone bills, salaries and wages, etc.
Businesses must be able to cover these expenses in order to justify staying open late.
Usually this is done through greater sales, etc. However, government can encourage
the growth of a 24-hour economy by providing such incentives as tax breaks (e.g.
lower taxes and/or tax rebates for staying open longer than twelve hours per day),
energy subsidies and wage subsidies, etc.
Businesses operating late-night hours may rely on building good customer relations
for keeping sustainable open hours i.e. client goodwill. But this is not enough
especially in Kenya. This presents an opportunity for the government to step in and
provide the necessary incentives for businesses to stay open late. Some of the
measures that the government could use include:
a) Lead by example by working 24 hours every day in all arms of the
government and parastatals.
b) Consider tax breaks and other incentives for new and existing investors
c) Change the current laws to reflect a move towards a 24-hour system
d) Legislate laws to make the 24-hour economy legal, practical and feasible in
all economic sectors and regions
e) Avail all government documents and application forms on the internet for
quick and easy access to the public
;
54
f) The judiciary should provide guidelines on the legal interpretation of issues
and also hasten hearing of cases
g) Give incentives to 24-hour investors
h) Ease procedures of issuing permits to encourage greater investment.
Issuance of licenses, permits and application forms for all services to be
done around the clock in offices and on the internet
i) Consider waiving fees or charge at a minimal rate for people in lower
income brackets (SME.)
j) Improve enforcement of council by-laws 24 hours
k) Improve, increase and maintain communication networks round-the clock
l) Liaise more closely with NEMA to provide a better living and working
environment
m) Engaging other stakeholders such as NGOs, Churches, Aid Organizations,
Civil society so as to complement government efforts in provision of
services.
n) More emphasis on Private Public Partnership(PPP), collaborations and
complementary action – in every sector of the economy. This can be by
speedy implementation of the PPP process in government and taking
advantage of the necessary collaborative activities e.g. cleaning up, public
toilet facilities, e.t.c.
o) The government can also, through the Ministry of foreign affairs:
p) Synchronise the 24-hour economy of Nairobi with the global economy
q) Create awareness of the new strategy in the international arena e.g.
producing 24-hour promotional materials for the international market
(pamphlets, info-papers, videos, etc.)
r) Use the 24-hour economy to promote direct foreign investment
s) Harmonise regulations governing hours of work with the EAC and other
eastern Africa countries in order to make the strategy viable
4.3.4
Roads and Transportation
One of the most important considerations in planning for an efficient 24-hour
economy is the issue of transportation. Along with this, roads are a major priority.
Both affect how people get to work, and how goods and services are moved around
within the economy.
Public transport, in particular, needs to be made smooth, efficient, available and on
time at all hours. Transport operators, whether they are government or private
enterprise, must ensure that their vehicles are clean, available, on time, and well;
55
coordinated with other transport modes. There needs to be a revolution within the
metropolis in terms of the modes and means of transport, so that things get to where
they are meant to go as quickly and efficiently as possible. That means that fast rail
transport, for example, must become a major mode of transport inside and outside of
the city. It must coordinate its pick-up and drop-off points and junctions with an
integrated bus and shuttle system that responds well to the changing needs of daytime
and night time, as well as weekday and weekend, travel. The provision of a regulated
and coordinated taxi service for all major urban areas must also be addressed.
Roads need to be widened and increased, especially in the major cities and other
centres of dense population, including rural areas. Slip roads that allow for exit from
one major thoroughfare to another should be constructed to ease the burden of travel
in congested city areas. There must be made a duplicate number of roads that one can
take to go from point A to point B in any part of the country. The lack of alternative
routes for any number of journeys across town makes roads unnecessarily congested,
impassable at times, and dangerous, not to mention economically depressive. The 24hour economy will require that aerial roads and overpasses, bicycle lanes, pedestrian
paths and bus lanes become a staple ingredient of urban roads planning and
construction.
In large, congested cities such as Nairobi, it can take several hours in traffic just to
travel a few kilometres from one place to another. Much of the daytime traffic jam in
Nairobi is as a result of Nairobi being the government, financial, industrial, judicial,
and business capital of Kenya. Added to this is the fact that there is a paucity of open
businesses at night.
Figure 4.7:Traffic jam in Nairobi [13]
;
56
Much of Nairobi‟s transport mess can be sorted out if one thing is done immediately –
move the government out of the central business district (CBD), out of the city and
out of the area. Any move to a location within the greater metro area of Nairobi would
be counter-productive, as it would not reduce the traffic problem but, rather, shift it
around within the same area. There is no important reason for the government to be
conducting its legislative, judicial or executive business from Nairobi anymore,
especially now with computers, the internet and telecommunications providing for
easy connectivity all around the world. The reduction in terms of traffic (motorised,
pedestrian and non-motorised) would be a boon for the development of other parts of
the city‟s economy, including round the clock freedom of movement, and could
stimulate other positive progress. The loss of government business in the city could be
offset by the realisation of its greater and untapped tourism potential.
Figure 4.8: Means of transport [14]
Some of the measures that could be undertaken to solve the transport problem are:
a) Improve security for all aspects of the sector, including, garages, service
stations, highways and ports
b) Encourage 24-hour operation of service stations and garages
c) More car-based police patrols to monitor road and highway security
situations around the clock
d) Encourage transport operators to provide bus, plane and train transport
e) everywhere on a 24-hour basis by creating transit hubs and terminals
f) Provide safe and secure taxi transport services (cabs, tuk-tuks, motorcycle
and bicycle boda-bodas, etc. in all areas
;
57
g) Improve rail transport
h) Install automatic toll collecting and paying points at all toll stations
(airports, highways etc.) to help develop a 24-hour operation in all such
places
i) Start night flights between the various Kenyan airports
j) Immediate construction and operation of several large scale and multistorey
k) Parking lots in the city and larger towns to cater for all-night and weekend
parking.
l) Make pedestrianisation of urban areas a major thrust of the 24-hour
economy, to promote people-friendly cities and towns
m) Construct pedestrian walkways between buildings to create a safe and
secure night-time conduit for workers
n) Encourage pedestrian traffic by constructing people-friendly sidewalks,
o) paths and walkways in all urban areas
p) Create pedestrian traffic controls at all major city interchanges
q) Provide adequate security in all areas (uniformed security, surveillance
cameras, communications equipment, alarms, etc.) to make people feel safe
to walk
r) Post security cameras on all street corners, on all major buildings and in all
alleys in city and town centers as a way of monitoring activities 24 hours a
day. Make certain that images on these cameras are monitored by the
authorities
4.3.5
Energy
There is currently no way the 24-hour economy will work properly in Nairobi. There
is much-too-frequent disruption of power supply and this is not conducive for
economic development especially for one that is aiming to go for 24 hours. There
needs to be an enabling environment for power security and availability so as to boost
investor confidence. The power services are, at best, intermittent throughout the
country (including Nairobi), and is seriously lacking in most places most of the time.
In order for the concept to become viable and sustainable, this situation must change.
Kenya must embrace new and renewable energy technologies in power provision.
These include wind, solar and recycled energy technologies, and will involve the
handing over of control of this sector by government to private enterprise.
;
58
Kenya has vast potential for solar and wind energy technology, seeing as it straddles
the equator and gets plenty of sunshine throughout the year, and has large areas of
uninhabited land suitable for the construction of large-scale wind farms and solar
energy gathering panels. This is a completely unexploited area of development.
Smaller-scale energy projects can be set up in all urban areas, too. These will reduce
the over-reliance on hydro-electric power generation and provide for a more
environmentally-friendly system of energy production.
Measures that can be taken to mitigate this problem include:
a) Decentralize emergency power stations to districts to encourage uptake of
24-hour activities
b) Encourage development of solar, wind and other „green‟ renewable energy
sources all over the country, to help speed up 24-hour economy growth.
This can be done by developing „farms‟ in appropriate areas such as the
outskirts in Nairobi as sources of public energy and power supply.
c) Reduce energy tariffs to encourage 24-hour investments
d) Provide tariff concessions for new investors in the 24-hour economy.
e) Reduce the frequent power disruptions to minimal levels or even
completely to gain investor confidence.
4.3.6
Water services and Waste Management
Water is an essential commodity in the implementation of the 24-hour economy. In
Nairobi, water lacks in most of the places most of the time. Many industries and
buildings resort to buying water which is supplied in trucks and this leads to wasted
labour hours and resources and also inconveniences from delayed deliveries. There
needs to be a new thinking in the provision of water so as to embrace the 24-hour
economy as fast as possible and effectively. Water services must be rendered on a 24hour basis.
Legislation can be set up that requires any building constructed to have up-to-date
water-harvesting technology, including gutters and storage tanks of a specified size
per specified unit area of building space. This is not difficult to do. This would help
offset the over-reliance on water provision companies. Also, conservation and storage
must be improved.
Waste management can become an even bigger issue with a full-time night economy
operating alongside the daytime one. In particular an increase in nighttime fast food
and shopping outlets can result in greater amounts of paper and plastic waste that
must be effectively disposed of. This issue needs to be carefully addressed.
;
59
a) The environment should be made an integral part of any development
programme and project. Environmental impact assessment must become a
normal procedure through the bodies involved such as NEMA.
b) Garbage collection should be done on an around the clock basis to prevent
choking the environment. This is also a win since many jobs could be
created this way.
c) Sorting, collecting, recycling, disposal and re-use of waste materials must
be encouraged and made a normal procedure.
d) There should be a public awareness campaign on the importance of proper
waste disposal and management.
4.3.7
Financial and investment services
Finances are an important part of every sector of the economy. Money, whether liquid
cash or whatever forms it is in, is needed to carry out transactions and also in the dayto-day running of the economy.
Most financial institutions operate on the traditional eight to four schedule giving
their customers only eight hours access. Some banks such as Barclays bank have tried
extending their operating hours by a few hours in some of their branches which is a
bold step forward in the attainment of the objectives of the 24-hour economy.
Some of the ways this sector could support the manufacturing industry is by:
a) Extend banking hours beyond 4 pm in the CBD and other towns
b) Provision of low-interest loans to help the development of startup
businesses and industries, and for educational development (bursaries and
loans, development loans, etc.)
c) Install ATMs across the metropolis
Figure 4.9: ATM outlets
;
60
d) Expand mobile and online money transfer systems across the country (such
as Zap, M-Pesa) and operate these on a 24-hour basis.
e) Banks to expand online and mobile banking systems in all major world
currencies
f) Operate 24-hour money and funds transfer systems in all major towns, for
both domestic and international transfers (such as Western Union and
Moneygram) to assist in business transaction
g) Offer fiscal and other incentives to local, domestic and foreign investors
who start up business on a 24-hour basis
h) Make a concerted effort to promote Nairobi as Africa‟s financial centre,
open for business on a 24-hour basis
i) Promote foreign investment in Kenya
j) Improve policies to promote 24-hour banks all over the metropolis
k) Assist clearing and forwarding operations to work 24 hours a day
l) Operate the Nairobi Stock Exchange and any other future capital market
exchanges on a 24-hour basis
4.3.8 Health and Social welfare
4.3.8.1
Medicare
The effects of evening, night, extended and rotating shift work on emotional, mental,
psychological, physical and social health are enormous, and have serious
ramifications for personal, family and community health. Personal health can become
a major issue as people pull away from the natural benefits of a good eight-hour sleep
at night to sleeping less and more intermittently and at varying hours of the day and
night. The body requires a proper sleep schedule in order to function effectively and
efficiently, and the brain can only work well when it receives the same signals at the
same time every day on a continuous basis. The very efficiency on which the best
minds depend for their creative and innovative edge is least well catered for by the
rigours imposed by a 24-hour lifestyle.
Health and medical services, including psychological, counselling and physical
therapists, must play a central role in the deliberate planning and implementation of
the 24-hour economy. Government hospitals and clinics need to operate on a fulltime
24-hour basis for all services, and not just the emergency and casualty sections.
Inorder to support the industry, this could be done:
a) Provide incentives for better management of health services
b) Encourage and improve service delivery over extended hours
c) Create more ambulance services in all parts of the country, as a PPP project
;
61
d) Provide medical care at all public and private hospitals, clinics, health
centres and dispensaries
e) Promote telemedicine and e-medicine as normal procedure in hospitals,
clinics, health centres and dispensaries
f) Work towards universal healthcare and make this available all day,every
day, everywhere
g) Use hospitals as health education centres on a broader basis across the
country
Figure 4.10: Health care services
h) Make sure diagnostic and supportive services (such as laboratory services,
x-ray services, etc.) at all public and private healthcare facilities is available
on a 24-hour basis
i) Open hospital-based and free-standing pharmacies for 24-hours every day
j) Reduce or waive duty on certain pieces of hospital equipment, as an
inducement for medical services development
k) Encourage doctors and dentists to operate private 24-hour clinics
l) Provide ambulances around-the-clock.
Good Medicare will contribute to increased productivity since healthy workers are
more productive.
4.3.8.2
Social Welfare
Social welfare refers to the various aspects of human life including religion, family
welfare, societal well-being, social amenities and activities. Included here also could
be the social manifestations of mental, psychological and physical health. In addition,
work effectiveness, work efficiency, and work efficacy must be properly thought-out.
Otherwise there is a risk of running employees ragged and lead to employee „burnout‟ and subsequent serious health problems. Some of the negative effects of the
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staggered working hours brought by a 24-hour economy are absentee parenting,
broken homes, divorce, inadequate moral and spiritual development, and a general
degeneration in the quality of family life.
As more and more people shift towards a working life that embraces the 24-hour
economy, including working late in the evening, at night, and on weekends, there will
be a concomitant increase in the numbers of people with young children requiring
child care at all odd hours of the day and night. Good planning demands that facilities
for child care be made available for those who need it. These situations require the
availability of child care that is specialized and can be provided either in the
workplace, at special centres or on special request. It is an important offshoot of the
round-the-clock economy, and must be addressed. The government has a major role to
play in this, as it must provide the legislative and administrative framework and
guidelines, via labour and childcare laws.
4.3.9
Information and Communication
A fast and reliable communication network is essential inorder to carry out business
round the clock because information has to be passed around and between the various
players in the manufacturing industry e.g. Customers have to place orders, suppliers
have to be paid, employees need to be contacted, e.t.c.
The current ICT structure is ridden with recurrent breakdowns which cripple
communication within the industry making them resort to „ancient‟ communication
methods which are not so efficient. Recently, the fibre cuts in the Indian Ocean have
seen the internet connection for the whole country and Nairobi in particular be at
snail‟s speed which is not good for an economy which is trying to move from being a
third-world economy. Also, the cost need to be affordable so that connection will be
easily affordable even to the small scale manufacturing investors who are key to the
growth of the manufacturing industry.
In recognition of the need for creation of a platform for a comprehensive one-stop
communication centre, there is a proposal on the creation of a platform known as “the
Kenya Industrial Development Platform” though the Ministry of Industrialization.
This would create effective networks and become a contact window for all
manufacturers. Once it is in operation, information can be shared among all
stakeholders in the sector; traders and manufacturers regardless of their sizes.
A reliable, accessible and affordable ICT structure could come in handy in the
implementation of a twenty-four hour economy since movement of information in the
shortest time possible is key to economic growth. Ways in which this could be
implemented so as to help the manufacturing industry adopt the 24-hour economy are:
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a) Extending the optic fibre network throughout Nairobi Metropolis to
encourage a broader consumer base.
b) KDN, which is a government-owned ISP should offer subsidized internet
connection to industries and the services sector.
c) Provide reliable mobile telephony network throughout
d) Increase the availability and accessibility of e-government and eadministration among other systems essential to the manufacturing sector
e) Increase tax incentives on ICT equipment and software beyond the current
hardware tax relief
f) Improve the availability and accessibility of reliable telephone, postal and
courier services on a 24-hour basis
4.3.10
Emergency and Safety Services
Nairobi has a lot to learn in responding to emergencies for it to be a 24-hour
economy. Looking at previous cases of of fire tragedies such as the Kimathi House
which is in the CBD, disaster preparedness is a myth. There are cases of firefighters
arriving at the scene without water, incompetent firefighters, empty or broken water
hydrants, e.t.c. One is left wondering how the people incharge of dealing with
disasters such as those will handle a raging fire fueled by petroleum products in a
factory located in the heart of Industrial Area in the middle of the night.
There is need to implement an emergency policy, guidelines and infrastructure for the
smooth running of a 24-hour economy in the manufacturing sector. This means there
is should be a proper setup by the authorities involved for such services as:
a) Fire brigades and fire safety services
b) Free telephone calling for emergency services
c) Proper training and equipment for the personnel
d) Regular drills and refresher courses for employees
What this means is that Authorities such as the Nairobi City Council needs to be
upgraded in terms of personnel and equipment in order to function as 24-hour service
providers. The current set-up of the City Council does not lend itself to any
meaningful activity, leave alone off-hour activities.
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CHAPTER FIVE
SUMMARY, CONCLUSIONS AND
RECOMMENDATIONS
5.1
SUMMARY OF FINDINGS.
The research established that most of the respondents entertained slightly different
perceptions regarding the implementation of a twenty-four hour economy in the
manufacturing sector.
i) 78.125% of the respondents were from manufacturing industries, 9.375% of
the respondents were from the Ministries and other players and the rest
were suppliers of manufactured goods.
ii) Most of the respondents (61.66%) believed that the government had not
done enough to promote the twenty-four economy in the manufacturing
sector.
iii) It was also found that the government had a major role to play in protecting
the local manufacturing industries through:a) Restriction of cheap imports.
b) Lower tax rates for local companies‟ raw materials imports
c) Better policies in investments e.g. low interest rates, subsidies, tax
breaks e.t.c
d) Encouraging adoption of technology
e) Providing patent for local inventions.
f) Participation in regional trade blocs to expand the market.
g) Encouraging PPPs.
h) Encouraging Research and Development
i) Encouraging direct and foreign investment in the local industries.
j) Promotion of local industries by awarding tenders to local industries
which meet standards.
iv) The Government also promoted the implementation of a twenty-four hour
economy by:a) Incentives to 24-hour manufacturers e.g. tax breaks, energy
subsidies, wage subsidies, e.t.c.
b) Involvement in regional trade blocs.
c) Providing a good environment to operate in.
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d) Encouraging Research and Development
e) Establishing policies and institutional frameworks for
industrialization in the 24-hour economy.
f) Introducing 24-hour cargo port operation
g) Introducing online processing of documents e.g. tax returns,
licences, e.t.c.
v) From the companies were visited most of their goods were mainly for the
local market. There was found to be a great potential in the untapped export
market.
vi) The causes in demand for locally manufactured products were found to be:a) Low production quality
b) Lack of enough marketing
c) Competition from cheaper imported products
d) Attitude towards local goods
e) Lack of appeal in design
f) High prices of products
vii)
The adoption of a 24-hour economy would most likely affect other
sectors of the economy.
viii)
Technology has had a big effect in the adoption of the 24-hour
economy e.g. on the use of CNCs and CAM leading to higher and more
efficient production.
ix) Other sectors affecting the adoption of a twenty-four economy in
manufacturing were:a) Security
b) Transport
c) Energy
d) Health and social welfare
e) Water and Waste Management
f) Financial and investment services
g) ICT
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5.2
CONCLUSIONS
In conclusion, there are many factors that could undermine the implementation of the
twenty-four hour economy in manufacturing.
The government itself and other sectors of the economy are key if the manufacturing
industry is to realize the 24-hour economy adoption in line with Vision 2030.
For the manufacturing industries to enhance the 24-hour economy they need to
expand their markets to increase the demand for their products. They also need to
invest in technology so as to improve on research and development and also their
manufacturing practices so as to produce effectively and efficiently.
5.3
RECOMMENDATIONS
The manufacturing industry players and other stakeholders should co-operate in
seeking to fully implement the twenty-four hour manufacturing to aid in achieving the
objectives of Vision 2030. This will have a symbiotic relationship amongst the sectors
since each of them stands to gain from this.
Industry bodies should unite in a common initiative to provide guidelines and advise
to manufacturers on implementing the 24-hour economy and how to deal with the
challenges that face them.
Manufacturers should embrace technology, innovation and R&D which was seen to
be generally low in the sector. This will lead to increased productivity and value
addition for their products, hence growth.
Through the Ministry of Industrialization, the government should focus on
encouraging manufacturing industries on adopting the twenty four hour economy.
This sector is one of the key productive sectors identified for economic growth in the
Vision 2030. This could be done by making policies and implementing them by help
of the Ministry of Planning.
The manufacturing industry should focus on market diversification rather than
produce limited range of standardized products which offer limited scope for value
addition and diversification. Similarly, the promotion of market expansion often leads
to product diversification and need for adjustment of industrial activities to meet the
demand, hence the need for working twenty hours.
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5.4
Areas of further research
i.
ii.
;
Ways of implementing the twenty-four hour economy in other sectors.
The data collected in the survey should be analysed further using
predictive analytical methods such as the SPSS.
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References
[1]
Ministry of planning, (2009), Kenya Vision 2030: 1st Annual Progress
Report, Government Press. Pg. 40
[2], [3]
Ministry of Planning, (2011), Kenya Vision 2030, sector plan for
manufacturing (2008 – 2012), Government Press pg. 1
[4]
Ghauri, P. and Gronhaug,K. (2002). Research methods in business studies,
2nd Edition. Europe: prentice hall
[5]
Mugenda and Mugenda, (1999). Research methods. Quantitative and
qualitative approaches, Nairobi act press, Jomo Kenyatta memorial library,
University of Nairobi.
[6]
Kombo D. K. and Kombo DLA, 2006, Proposal writing and thesis
proposal; An introduction. Paulines publications, Africa: Nairobi.
[7]
Hornby, A.S (2002). Oxford advanced learners dictionary. Oxford
University Press. London
[8]
Ministry of planning,(2011), Kenya Vision 2030 strategic plan (2008 2012), Government press pg.16
[10]
www.vision2030.go.ke
[11]
www.knbs.or.ke
[12], [17], [18] A 24 hour economy- the next frontier in Kenya‟s economic
development. By Iraki B Lavussa, C.Misiko, J,Nyaggah and E Mukabana
;
[13]
www.architecturekenya.com
[14]
www.visualgeoraphy.com
[15]
Ministry of Planning, (2010), 2nd Annual progress report. Government
press
[16]
www.planning.go.ke
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Appendix: Questionnaire
UNIVERSITY OF NAIROBI
DEPARTMENT OF MECHANICAL ENGINEERING
FINAL YEAR PROJECT
TITLE: DEVELOPING A FOCAL POINT ON ENHANCING THE 24
HOUR ECONOMY FOR THE MANUFACTURING SECTOR IN
NAIROBI.
QUESTIONNAIRE
KABIRU DENNIS
F18/2714/2007
MAHMOUD IBRAHIM HABIB
F18/1725/2007
We, the above mentioned students are in fifth and final year in the department of mechanical
and manufacturing. As part of final year requirement we are undertaking the above mentioned
project. We will appreciate if you could kindly answer the attached questions to help us
understand the underlying factors.
Thank you in advance for your kind and helpful comments.
Kabiru Dennis
…………………….
Mahmoud I Habib
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Name of company: ……………………………….
Questionnaire.
1. What role does the government play in protecting the local manufacturing industry?
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What are the government policies in promoting the 24 hour economy of the
manufacturing industry?
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2. Products in this company are produced for the local industry
export
3. What causes the drop in demand for locally manufactured products?
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4. How many manufacturing companies do you know that operate in a 24 hour schedule?
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5. How has technology affected the adoption of the 24 hour economy in the
manufacturing industry?
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6. (a) What other sectors affect the adoption of the 24 hour economy in the manufacturing
industry?
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(b) How does each sector affect manufacturing?
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7. Any other comment
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