Agribusiness for Africa’s Prosperity. Country Case Studies
There are, however, significant weaknesses that reduce the effectiveness of the dialogue between public and private sector. It is not always well-structured and much of it takes place informally (MoTI 2006). Some cases, however, provide exceptions. Such is the case with leather products, where the relationship between the Government of Kenya and international organizations, like the International Livestock Research Institute (ILRI), in improving the quality of leather products by specific programmes has been important in the upgrading of value chains and in improving market access. Cooperation includes training and the opening of abattoirs in close proximity to farmers. In other agro-industrial subsectors however, the PPP potential has not been fully exploited and through the PSDS the government is seeking to achieve a rationalized and improved interaction between the public and private sectors that will enhance effective service delivery (MoTI 2006). Reforms to improve the environment within which public-private sector cooperation and dialogue takes place include: the Civil Service Reform Programme (CSRP), the Public Enterprise Reform Programme (PERP), the adoption of Result-Oriented Management Techniques (ROMTs), and the introduction of Strategic Plans (SPs) and Performance Contracts (PCs). From their side, private sector agro-industries have put in place measures aimed at improving their relationship with the public sector, accepting that sound corporate governance principles should form the basis of private sector operations. Some private firms have introduced corporate social responsibility (CSR) programmes as a contribution to overall development (Republic of Kenya 2006). Strengthening public-private sector cooperation and dialogue in agro-industry depends on the implementation of well-structured exchange programmes between public and private sectors at management levels, through which the players in agro-industries can engage with the public sector (Republic of Kenya 2006). Box 4.1 describes an initiative to use PPP to strengthen agro-industries in the country involving the public and private sectors, as well as development partners. Outside the realm of PPPs, there are cases of inter-firm cooperation in agribusiness, such as the provision of funding to farmers through microfinance institutions like the Equity Bank, the Cooperative Bank, and the Agricultural Finance Corporation. Private companies (Amiran being an example) also provide greenhouse production technology packages for farmers, especially in horticulture. Significantly, these partnerships operate without government intervention. Box 4.1: Public and Private Sector Partnerships Supporting Agro-industrial Development: The Case of the Micro, Small and Medium Enterprises (MSMEs) Competitiveness Project Support measures for agro-processing have included the MSMEs Competitiveness Project. This is a five year World Bank-supported project to support the development of the private sector. The Ministry of Trade and Industry (MoTI) is implementing the project through public and private sector partnerships. The main objective is to increase growth and competitiveness of the MSMEs in the country through access to finance, strengthening enterprise skills and market linkages, and improving the business environment. The financial access component works to deepen and expand the reach of financial services to MSMEs. The strengthening of enterprise skills and market linkages component has a value chain matching grant whose objective is to strengthen competitiveness and raise value added in the supply chains of the cotton, pyrethrum, coffee, and leather sectors by enhancing access to business development services and strengthening linkages between MSEs and their markets. The other important component is that of improving the business environment and is aimed at improving the business environment for MSMEs and providing an enabling environment for private investment. The MSMEs Competitiveness Project has held a value addition workshop for cotton farmers and livestock keepers with the aim of creating awareness on value addition opportunities in the cotton and leather subsectors, providing skills on methods of improving the quality of skins and hides, and increasing cotton production. A new leather curriculum to be offered at the University of Nairobi is expected to shore up the sector in terms of technical support. The need to advance the leather technology in Kenya by leather degree courses in learning institutions has been underscored as one of the key areas for improving the global competitiveness and the quality of Kenyan hides and skins. The sector has faced diminishing skills and knowledge, leading to the production of low quality products. Reviving and strengthening leather associations and partnerships among chain players are other measures to improve the sector. Source: Republic of Kenya and World Bank, The MSME Competitiveness Project, Pamphlet
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