In Summary
  • Kenya is largely considered the most industrially developed country in Eastern Africa and was a good candidate to follow the footsteps of Asia’s Newly Industrialized Countries (NICs).
  • That dream, however, continues to be a mirage and we seem to have squandered the advantages we used to have.
  • The solution is simply helping them to innovate.
  • The fight against corruption, especially importation of counterfeit, must also be stepped up to attract investors into locally available resources that can boost manufacturing.

The manufacturing sector is undergoing a slow and painful death.

We have always bet our future on the sector, and we prioritised and invested a lot of resources in it. However, all these effort has not borne noticeable fruits.

Why?

Vision 2030 envisaged that the sector would contribute at least 10 percent per annum to GDP.

The objectives then were to: strengthen the capacity and local content of domestically manufactured goods; increase the generation and utilisation of research and development results; raise the share of products in the regional market from seven to 15 percent and develop niche products for existing and new markets.

In order to achieve these noble objectives, the government identified specific goals and targets to steer industrial growth. These include:

  • Development of the iron and steel industry through establishment of an integrated steel mill.
  • Development of small and medium enterprise (SME) parks, industrial and technology parks, and industrial manufacturing clusters.
  • Upgrading of products from small and medium enterprises.
  • Skills development for the technical human resource for the manufacturing Sector.
  • Commercialisation of research and development results, attraction of strategic investors in strategic sectors i.e. iron and steel industries, agro-processing, machine tools and machinery, motor vehicle assembly and manufacture of spare parts.

Kenya is largely considered the most industrially developed country in Eastern Africa and was a good candidate to follow the footsteps of Asia’s Newly Industrialized Countries (NICs).

That dream, however, continues to be a mirage and we seem to have squandered the advantages we used to have.

In 1980, industry and manufacturing contributed 21 percent to GDP. For most of the 1990’s and the first decade of 21st century, the sector contributed about 14 percent on average. In this second decade, the sector’s contribution to GDP has decorrelated to 8.4 percent in 2017.

The expansion of manufacturing especially towards the end of the last century was hampered by poor transport systems, dumbing of cheap imports including counterfeits and insufficient and costly energy.

In spite of the problems, successive governments (through Moi’s 1995 Industrial Transformation Strategy, Kibaki’s 2007 Vision 2030 and Kenyatta 2017 Agenda Four) have always prioritised manufacturing.

There are also many policy pronunciations around the development of micro, small and medium enterprises as well as investment in research and development.

GREED

The Achilles heel of Kenya’s industrial transformation remains the issue of policy implementation and greed.

The Vision 2030 objectives have not been implemented. Studies show that Kenya has commercial quality and quantity iron ore deposits in Katse area (Mwingi North Constituency in Kitui County), Tharaka-Nithi County, Homa Bay and Busia Counties.

Greedy people continue with importation of cheap products, mostly counterfeits, in spite of the fact that a policy framework exists and there is ample research that clearly identifies the opportunities that exist.

Some studies, for example, show the precise location of the resource are available but such resource as iron ore are not being exploited especially now when construction is booming. There are also other policy proposals in Agenda Four like housing that will require steel.

Instead, greed stands in the way. Mining licenses are given to amorphous companies that have no capacity to exploit the resources instead of allocating licenses to real investors who can drive manufacturing.

Micro, small and medium enterprises (MSMEs) cannot grow unless we build incubators, handhold them, and accelerate their development. Left alone, as we have done, they go nowhere. They will, however, continue to replicate one another and die as they do.

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