Can YOU outsmart the expert?

By JAMES MBUGUA

The Ministry of Trade has to work with a lower than expected budget for the Agoa conference which kicks off in Nairobi tomor-row after Treasury released only half of the expected Sh160 million for organis-ing the event.

The move comes as tensions emerge between

officials of the ministry and US embassy staff over what the latter see as lethargy on the government’s part in the preparations for the event.

Trade officials told the Star that the government had only released Sh80 million towards the Agoa conference, forcing the organisers to cut back on areas like publicity for the

event. “We only got half,” said one official who re-quested anonymity. “If you look at Comesa, they got Sh200 million. We only got Sh80 million.”

The official, however, dismissed allegations the Ministry of Trade’s is drag-ging its feet over the event. It is said US embassy of-ficials have been spearhead-ing the preparations for the

Agoa conference because of the alleged laxity from the ministry. “Let them do their part,” said the official.

A person working closely with the Agoa confer-ence organising team said ineptitude of officials at the Ministry of Trade has seen the US officials turn to Gina Din communications to help put the extrava-ganza together.

By TiMoThy MUnUkU

IT is emerging that most of the benefits from the Afri-can Growth and Opportu-nity Act (Agoa) have gone to foreign firms since the Act came into effect almost a decade ago.

While the apparel indus-try contributes over 95 per cent of Sh20 billion Kenya earns under Agoa, only one out of the 18 textiles and apparel firms operat-ing in the export Process-ing Zones is indigenously owned.

Agoa gives duty free ac-cess to the US market for 6,400 items from 40 sub-Saharan countries but Ken-ya only exports about 20 of these items with textiles taking the biggest chunk.

“The government needs to find ways to financially support entrepreneurs to start businesses in the ePZs,” said Richard Ndu-bai, the Chief executive Officer of Ricardo (ePZ) International Co. Limited, the only Kenyan owned ap-parel exporter at the ePZ.

“Kenyan entrepreneurs are young and well edu-cated and possessing great ideas but only lack the collateral necessary to se-

cure bank loans to set up businesses,”he said.

Ndubai says govern-ments in other countries play an active role in sup-porting entrepreneurs through various mecha-nisms such as guaranteeing bank loans or taking up part ownership of the busi-ness until it pays off the capital debt.

“Agoa was established to

benefit Africans and there is lots of opportunity for that happening if people with good business plans get assistance in getting credit,” said Ndubai.

The eighth Agoa forum starts tomorrow and is ex-pected to bring top US gov-ernment officials including the US Secretary of State hillary Clinton and US Trade Representative Ron

Kirk. Kenya Association of Manufacturers CeO Betty Maina said apart from sourcing capital, entre-preneurs are usually faced with the challenge of get-ting buyers for their prod-ucts.

She said most external buyers ask for bulk sup-plies and local manufactur-ers have a challenge meet-ing the demand.

ALY KHAN’S

So whAT’S ThE STory wiTh rEAl ESTATE?

The Real estate market is notoriously difficult to track scientifically. In London, I can type in my old address and see all transactions that have taken place, in the neighbourhood.

James Orengo esq might consider pushing for all transactions to be put on record. After all it’s an Information Century and the Cables have washed up on our shores.

every so often, we get a story of either Somali money and how it is spiking prices or more often than not we get an article of how Prices are certain to collapse [because the diaspora is not buying or some other reason] and an imminent crash is as plain as day. What is the reality? you might well ask.

Across sub Saharan Africa, I am hard pressed to find any city where prices are going down. In fact, most places have enjoyed stellar returns. From Kampala to Lilongwe to Lagos, prices have produced outstanding absolute returns.

South Africa is an exception but probably not for very long with the World Cup now just around the corner.

In Nairobi, we might have a temporary over supply of apartments in certain areas and these prices might be soft but on the whole, we too have seen prices appreciate.

Some alert investors [around the Namanga Road, Athi River, Kitengela, Mombasa and parts of Nairobi] have seen plain miraculous appreciation.

The first point is that demand is now much more extensive. We have a growing middle class. We have 2.5m Kenyans abroad. We have Africans from Somalia to Congo all looking at Kenya.

You can enter and exit Kenya for a low bid offer spread. And then we have a structural short in supply.

The Nairobi Stock exchange was structurally short until the Safaricom IPO, which effectively cleared the short in the stock market.

In fact, the difference between the NSe and real estate is very wide and I expect the Nairobi Stock exchange to be dragged higher in part because of this.

You can always overpay for something in the wrong neighbourhood but the underlying story is a powerful and bullish one.

Shares go up and down and readers are advised that this column representsMr Satchu’s personal opinions.

Trade meeting to run on half budget

STARPORTFOLIO

excLuSIve : Most EPZ businesses are owned by foreigners. (inset) richard ndubai.

THe STAR Monday, August 3, 2009 LOcAL 17

Kenyans yet to reap from Agoa trade

business UP TO DATE, ACCURATE BUSINESS INFORMATIONNEWS YOU CAN USE, EVERY DAY

H

PhOTOS/ JACK OWuOR