Kenya’s textile industry has the potential to play a key role in anchoring the country’s deeper movement into middle income status and in serving as a source of gainful employment for its fast growing, young population. As a manufactured good, it offers opportunities for increased value capture and streamlined trade logistics and for the building of skills and experience from the factory floor to management level. Based on these foundations, it therefore serves as a potential gateway to other manufactured goods, offering opportunities for Kenya to capture an increasing share of global trade and to advance economic diversification.
The textile and clothing industry has made a major contribution to employment creation and poverty reduction in Kenya. It has the capacity to create both direct and indirect employment opportunities but now the textile industry in Kenya is at the verge of collapsing with the foreign textile industries taking over. The textile and clothing industry in Kenya faces a significant crisis. This emanates from continued deterioration in the purchasing powers of the majority of the population, thereby reducing effective demand for textile products, cheap imports, and the elimination of quotas as a result of the expiry of the Agreement on Textiles and Clothes (ATC), exposing the country to stiff competition on third markets from more established manufacturing economies such as China. Consequently, a number of firm closures and layoffs have been reported in the country’s textile industry. Preliminary reports indicate that up to 12,000 jobs have been lost due to factory closures and reduced operations.
Local textile manufacturers supply only 45 percent of Kenyan textile market requirements while imported new and used garments and imported fabric account for up to 55 percent of the market. Demand for textile products in the country is estimated to be growing at 3.8 percent per year.
Poverty reduction and creation of productive and sustainable employment opportunities remain major policy objectives in Kenya. Despite several policy interventions, Kenya is still faced with high incidences of poverty, unemployment and low economic growth rates. Textile sub-sector constitutes an important component of the manufacturing sector in Kenya. However, inward looking policies initially pursued by the government, massive dumping of used clothes, illegal importation, expiry of the ATC quota regime, and general mismanagement of the agricultural and co-operatives sectors significantly undermine growth prospects and competitiveness of the textile sub-sector in the country. The industry is also under severe stress from Asian imports, particularly China and it is less likely that it can withstand the surge. Consequently, a number of firm closures and lay-offs have been reported in the country’s textile industry, thereby aggravating the unemployment and poverty situations in the country. The question is, should the government impose a law that will favor the Kenyan textile Industry by exporting more and importing fewer textiles from the developed countries?
Written by Amina Martha