Innovated and inspired in Africa, made in China; may be the label that will get to see on a number of innovations by local entrepreneurs who have chosen to take the road less traveled to build businesses and offer services based on hardware. The push to diversify from what has been pure software play for the Silicon Savannah has been met with teething problems that should be easy to navigate around, if we are to truly empower our entrepreneurs to have the full development ecosystem domiciled in Kenya, with the key benefits being growth of local competence and job creation, as often times the business bits of the innovations have already been well thought through.
We are not yet at the level where we can build the smaller components that form the baseline of our innovations and as such must bring these parts in and add value to them creating an end product that is more than the sum of its parts.
However there seems to be a massive disconnect at government agencies such as the KRA who seem to have a warped value extraction mindset. The duty applied on these components almost seems arbitrarily pulled out of thin air and are ridiculous by every measure, juxtaposed against the revenue potential from a tax perspective that the new products or services will bring. In some instances it is double the value of the “raw materials” being shipped in.
There are two ways around this, with the first and most frictionless option being that of removing all duty on electrical and other such components coming in as “raw materials” to be used in the creation of valuable products or service .The second is more long term requiring both political goodwill and private sector support. It is the scaling up the Numerical Machining Complex to get to the level where manufacture of individual components is possible. This will see us manage and control the entire pipeline resulting in cheaper overall cost of production if sufficient volume, which I believe is possible is pushed. The knowledge exists as evidenced my interactions with academia and a knowledge transfer program can be initiated where we feel that there are gaps.
There is a domino effect on the seemingly one off inconvenience on both time and cost that permeates to other facets of running a hardware based business such as after sales service. At the end of it all, we need to build, ship and maintain product fast but the status quo has put a damper on everything.