Kenya’s Industrial Transformation Programme

Kenya’s Industrial Transformation Programme Charts the Way Forward

By Phyllis Wakiaga

The launch of the Kenya’s Industrial Transformation Programme yesterday by the Ministry of Industrialisation and Enterprise Development is of great importance to the industrial sector and the nation as a whole. It is the right path in growing Kenya back to the Industrial hub it needs to be.

While vision 2030 lays out in broad strokes of our development, the roadmap is contained in the newly released Kenya Industrial Transformation Programme. This plan builds on that broad vision and goes into the nitty-gritty of things by laying out in detail, how we are going to be industrialised in the remaining 15 years of the blueprint.

Industrialisation has a lot of challenges and competing in global markets will require our companies to be global. Kenya has great potential to become one of Africa’s few Industrial hubs. Mombasa is one of our best and strategic assets that we are yet to fully exploit. We need to critically look at our comparative advantage as a country and focus on that.

Developed by Mckinsey, the plan targets 4 key things; an increase of manufacturing to over 15 percent of GDP, the creation of 1 million jobs, a fivefold increase in our Foreign Direct Investment (FDI) and securing a top 50 position in the ease of doing business index. All this will be driven through 5 pillars, 4 of which will be built on the growth and expansion of the SME sector. The other four pillars include the expansion of our export engine, the growth of the agro processing sector in the country, harnessing local content resource and enhancing the non industrial sector for job creation.

This programme is good as it identifies opportunities that will more than double the amount of current formal manufacturing sector jobs. For a long time, Kenya’s manufacturing base has remained static at 11 percent of the country’s GDP. Increasing this base is critical to job creation, economic growth as well as domestic and foreign investment.

The plan then goes into the specifics, concentrating on our traditional strengths and particularly on sectors areas where we have been shortsighted and overlooked potential for growth. Our economic growth as a nation has been limping on one leg, pushed by domestic consumption instead of production and the plan focuses on how we can improve our production through value addition of goods that we have traditionally sold in raw form and in doing so increase our net worth through job creation.

Of particular importance is the value addition in the agricultural sector so that we become an agro processing hub. We process only 16 per cent of our agricultural exports and this figure needs to go up so that we can even blend our own tea and sell it in a blended form. Expansion of our fishing industry to include tuna processing will also augment our strengths in fishing as we so far only concentrate on nile perch processing.

Our leather industry will grow, if only we made handbags and shoes instead of exporting wet blue leather. The plan also discusses the construction sector, the textile sector and other age old sectors such as tourism for growth initiatives. The oil and gas sector is still a fledgling albeit promising sector and we are still in the early stages of exploiting our resources so the plan outlines how we can do this best. What stands out is the intention of the plan to establish various facilities in various Counties as a way to promote development on the counties depending on the resources found in that County.

The list of challenges identified in the programme will need to be urgently addressed. These include the usual problems of access to land, markets, enabling infrastructure, a skilled labour market and investor friendly policies, all of which we have spoken of again and again as the industrial sector. Moreover, the requisite tax and regulatory reforms as well as policy stability will be key to enhancing Kenya’s competitiveness.

The plan ends with a strategy to attain the goal and industrial related policies have been laid down. It is important to create an industrial development fund to support these initiatives and invest in an enabling environment through the development of industrial skills and parks for business to set up in. The government is already working on certain infrastructure projects that will see some of these initiatives underway and we recognise these efforts.

We, as the main association of Manufacturers and the voice of Industry in Kenya,  are fully behind this industrialisation program and we look forward to its implementation. We intend to work closely with the ministerial development unit that will be put in place as part of the strategy which we hope will galvanise all stakeholders into action towards a prosperous future.

The writer is the CEO of the Kenya Association of Manufacturers and can be reached on ceo@kam.co.ke