Banana Fibre: Key to Uganda’s Industrial Development?

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OPINION

Yusuf Bangura

Nyon, Switzerland

We have just returned from a three-week holiday in Kenya and Uganda. Apart from the stunning game parks, lakes and seaside resorts that we visited, we took the opportunity also to visit a few agro-industrial plants that hold great promise for advancing the development project in that part of Africa.

In Kenya, we visited the lucrative flower farms at Naivasha that produce, package and export flowers to Western markets. In Uganda, our focus was on the fledgling banana fibre industry.

Our flight from Entebbe to Amsterdam was scheduled for midnight, so on our last day we decided to visit Uganda’s pioneering banana fibre factory, Texfad, at Busaayi, a rural settlement in Mukono district at the outskirts of Kampala.

Uganda is the second largest producer (after India) and biggest consumer of bananas in the world. The average Ugandan eats one kilogram of bananas a day. According to our driver, if a rural house does not have a banana plant in its backyard it will be seen as a house without food.

The country boasts of 84 varieties of bananas. Its staple food is boiled and mashed bananas—or amatooke in Luganda, Kampala’s lingua franca (pronounced as Amato-o-ké in a soft melodic tone; and called matoke in Swahili in Kenya and Tanzania).

Going without amatooke for a day may be considered as starvation. Amatooke is to Ugandans what rice is to Sierra Leoneans. Bananas can also be roasted and prepared as juice and alcoholic drinks.

However, the wonders of the banana plant beyond its food value are only recently being recognised by smart Ugandan entrepreneurs. Almost every part of the plant is useful to humans: apart from serving as food and drink, the stem of the banana contains fibre that can be processed to make carpets, bags, hair extensions, clothes, sanitary pads, shoes, and various other household items and crafts.

The products that can be made from fibre are biodegradable and, therefore, very environmentally friendly. This is especially demonstrated in the fake hair industry, with many African countries spending enormous amounts of scarce foreign exchange to import these products. The fake or synthetic hair export trade is valued at USD4.56 billion, with China accounting for 70 percent of the exports. The leading importers of fake hair are the United States (USD2.02 billion), Nigeria (USD410 million), Ghana (USD226 million), South Africa (USD192 million), and the United Kingdom (USD180 million). Discarded synthetic hair, which ends up in land filled sites, is causing great harm to Africa’s drainage systems, water bodies, soil quality and food chain. Banana fibre hair products clearly offer a solution to these problems. If they are discarded, they can easily rot in the soil, whereas synthetic hair that is made from plastic does not.

The Philippines pioneered the art of fibre extraction and craft production, but India leads in turning it into a profitable business on an industrial scale for both domestic consumption and export.

The banana’s roots can also be processed to make gum, and the potential of using the plant’s liquid as fertiliser is being explored by Ugandans. Only 15 percent of the stem is useful for fibre extraction. However, the remaining 85 percent can be used as biomass or energy. In addition, the green banana leaves can be used as plates, table decor, pots for cooking stews, bowls for steamed rice, and cones to fill with different kinds of food. The banana is really a wonder plant that may hold the key to Uganda’s industrialisation.

Owned by a a young Ugandan entrepreneur, Kimani Muturi, and founded in 2013, Texfad is the leading banana fibre company in the country. It produces a variety of carpets and hair extensions and has links with other companies producing fabrics, bags, sanitary pads, and paper.

We were warmly welcomed by the factory’s manager, John Baptiste Okello, who gave us a rich lecture on the banana fibre industrial value chain—from the extraction of fibre from the banana stem to the transformation of the fibre into final products and their sale or distribution in domestic and international markets.

According to the manager, seventy percent of the factory’s products are sold locally and thirty percent are exported. It is clear that not many plants or commodities can rival the banana fibre’s potentially extensive and deep backward and forward linkages with the national economy.

Banana farmers are now assured of income not only from the banana fruit but also from the stem; millions of banana stems were left to rot after harvests before the introduction of fibre processing plants. Some farmers have even diversified their activities by investing in fibre extraction technologies and selling fibres instead of banana stems to Texfad and other companies that are manufacturing fibre-based products.

We were informed that firms specialising in the production of bags, carpets, shoes, shirts, papers, ropes, hair, and household items are being formed to cash in on this miracle plant. Instructively, unlike many businesses in manufacturing and allied sectors, Ugandans dominate the entire value chain of banana growing, fibre extraction and manufacturing of fibre products.

However, these firms, including Texfad, are not yet industrial juggernauts. They are still small operations and require a lot of investment and effective policies to scale up production techniques and increase output. Apart from the fibre extraction process, which is automated, the rest of the work is done manually and take enormous amount of time to make a single product. A rug, for instance, may require a month to weave. It is not surprising that banana fibre companies have difficulties meeting demand, especially from overseas clients requesting huge quantities of hair extensions.

Addressing the production techniques and output problems requires attention to three other big problems that are holding back Uganda’s (and Africa’s) industrialisation. The economic crisis of the 1980s and introduction of IMF and World Bank-inspired structural adjustment programmes opened Africa’s struggling post-independence import substitution industries to unregulated and unfair global competition. Most manufacturing firms collapsed, pushing Africa deeper into import dependence for basic consumer goods.

The adjustment period in Africa is generally seen by scholars in the development field as lost decades. Sadly, Africa remains the only region where the manufacturing frontier has not been conquered despite surrendering macroeconomic policy making to the Washington-based institutions for more than thirty years. It is unable to feed itself, clothe itself, house itself, cure itself, and transport itself without extensively relying on goods produced in foreign countries.

Indeed, the continent accounts for only 1.9 percent of global manufacturing. The manufacturing sector’s share of GDP stagnated at about 10 percent for much of the 2000s and employment at about 14 percent. In some countries, including Uganda, manufacturing share of employment is even much less than its share of GDP, underscoring the sector’s low labour absorptive capacity.

Urbanisation, which in the Western and East Asian worlds, is linked with industrialisation, has instead been driven in Africa largely by petty or small-scale informal enterprises that have failed substantially to improve living conditions.

As Kampala and the country’s numerous roadside towns demonstrate, Africa’s cities are clogged up and difficult to navigate. This is because most informal business activities are conducted outside instead of in buildings, there is no mass transit system to move people around, numerous and poorly regulated okada motorbikes ply the streets and make city walks a hazardous venture, and the unreliability of electricity makes it difficult to transform the sprawling and horizontal settlements into manageable vertical settlements or high rises. The cities and towns generate much energy, yet add little value at the lower end of livelihood activities and neighbourhoods where most city dwellers are trapped and exposed to squalid conditions.

The revival of manufacturing in the 2000s in some countries unfortunately coincided with a second big problem: the rise of China as the world’s industrial power house or factory for making basic consumer goods. Cheap Chinese products have not only flooded Western markets as Western economies move up the value chain, especially in services; they have made it impossible for industrialisation to advance in Africa. The carpets, bags, hair, clothes, paper, and other household items produced by Uganda’s fledgling banana fibre companies and products from other industrial firms compete with cheap alternatives from China.

The large influx of second-hand products that accompanied the liberalisation of trade in the 1980s and expanded in leaps and bounds in recent years, constitutes the third problem. Kampala’s shops, roadside stalls and pavements are full of second-hand clothes, bags, shoes and virtually every item produced at the low end of the manufacturing value chain that historically set countries on a successful industrial path with positive employment-generating effects.

African countries have taken the easy route of clothing and enabling their citizens to access a variety of household goods cheaply by relying on discarded products from Europe and North America instead of producing them. No other continent does this on the scale that the second-hand products market has assumed in Africa.

Uganda’s banana fibre industry may serve as an engine of endogenous growth and transformation, linking industry and agriculture in sustainable and mutually beneficial ways, raising the incomes of farmers and factory workers to decent levels, and helping to diversify and deepen the country’s industrial landscape. But this can only happen with carefully crafted and rigorously enforced industrial policies that prioritise local value addition and help producers to expand domestic markets as well as conquer external ones.

Bio Note: Yusuf Bangura was a Research Coordinator at the United Nations Research Institute for Social Development in Geneva between 1990 and 2012 and lead author of the Institute’s flagship report Combatting Poverty and Inequality: Structural Change, Social Policy and Politics (2012). He was Series Editor of the Palgrave-Macmillan and UNRISD Series Ethnic Inequalities and Governance of the Public Sector and Developmental Pathways to Poverty Reduction. After leaving UNRISD he taught international political economy at Fourah Bay College, University of Sierra Leone in 2013-14. He also taught political science at the Ahmadu Bello University in Nigeria from 1980-1988.