Yet again my frequent mental journeys lead me to the ever-expanding fleet of passenger vehicles on Kenyan roads. It would seem the Kenyan dream as it is distinctly defined consist of a Japanese made automobile as one of its pre-requisites. A quick glance at the valuations of these vehicles reveals prices ranging from $6,000 all the way to as much as $14,000 for the more luxurious models. Far be it for me to criticize the capital accumulation in the form of motor vehicles considering these cars are still too few as compared to the needs of Kenyans. The basic point is that we need cars, more cars as it is. Yet the question that forms is whether transportation is our major concern over and above other needs requiring equipment.
While vehicles are the most visible engineered equipment on Kenyan roads I believe that middle-income Kenyans on the path to capital accumulation and riches should consider all sorts of equipment in as far as ownership of capital goods is concerned. While a Toyota Camry can possibly be used as a taxi or as a driving school instruction tool I believe there equipment comparable in valuations that can DO MORE.
And doing more is what Africa’s equipping needs should be focused on. A Mini excavator of the BOBCAT model capable of doing residential home excavations amongst other landscaping needs is priced at around the $14,000 range that luxury car models from a number of german manufacturers come in at. As a matter of fact I know that excavation for residential buildings is mostly carried out by men with pick axes. While these jobs may be lost to the Mini excavator the focus should be on how the whole process of capital accumulation is affected by equipping. Faster digs for homes slash costs and increase quality of structures since the excavations are accurate and under more control.
Equipping Africa is a mammoth task and I believe a veritable business opportunity. Submersible Pumps powered by solar along with Borehole Drilling rigs can mean transformation for a community desiring water in the large Semi arid lands that Kenya occupies. These pumps range in prices much similar to the vehicles that most middle-income and upper middle-income Kenyans hope to own. Yet the utility and economic sense behind a submersible pump and a bore hole rig is much more compared to a Toyota Mark X.
Granted the productivity of Africans is low across the board. Due to the weak human systems of education, health and criminal justice systems the locked in human capital will take time before it can be fully exploited. In the meantime accumulating equipment for rent or services provision should be central to the Kenyan with access to bank credit facilities. Instead of a car purchase perhaps a new business opportunity could be in the offing for someone with the time and patience to learn how a piece of equipment can be used to reduce the cost of a process. And the use of the equipment need not be so utilitarian. Tric Gaming is a Pay-to-Play Video Game Arcade on Tom Mboya Street whose core components consist of 32-inch LCD TV’s and Xbox 360 consoles. These form an entertainment pod capable of keeping up to 4 teenagers and young adults occupied for $1.5/hour up to 5 hours in some instances. The valuation of the 12 pods comes in at around the same valuation of a Japanese automobile model. I happen to have run down the numbers on this particular business opportunity and the pay back time ranges between 9 and 12 months depending on the cost of real estate, consoles and TV’s.
The need to equip Africa is immense and with it huge leasing opportunities for the savvy investor looking to focus on cash flow. Whether it be a bore hole rig, Mini excavator or even an Xbox 360 Console paired with an LCD TV and an attendant Sofa the need for investing in equipment continues to grow and real business opportunities with it. Why not buy something other than a Japanese automobile the next time you go for an unsecured loan from your favourite bank? Africa sure could use more. Let us equip!