Demand and Supply of Paper in Kenya: an Econometric Analysis 1976-1985

Abstract

This paper uses quarterly data to model the supply and demand for paper in Kenya. Price and the cost of production of paper are insignificant. Population is a significant determinants of demand. Installed capacity is important determinants of local supply of paper. Machine breakdowns, shortage of skilled workers, wastepaper, and water cause some idle capacity in papermaking in Kenya. After 1980, water shortages accounted for 50% of the downtime at Highland Paper Mill. Wastepaper recyclers pay import tariffs while PPM is exempted. The wastepaper recyclers, therefore, find it expensive to import spare parts. This hampers recyclers from importing enough spare parts. Kenya should synchronize the development of forests and forest based-industries. Finally, paper-makers should try to use other fibres (e.g., rice- and wheat-straws, and bagasse). Private organizations and the public should recover more wastepaper.