How we can spur Kenya’s quest to become industrialised by 2030

With its diversified economy, tech-savvy human capital base and strong information and communications infrastructure, Kenya’s potential of becoming industrialised by 2030, as per its vision, is unmatched in sub-Saharan Africa.

Newly independent Kenya’s manufacturing sector recorded laudable momentum. But the impetus died off, ushering a progressively sluggish performance. The contribution of manufacturing to gross domestic product (GDP) in 2015 was at par with 1965.

To return manufacturing to the growth path, five action points are critical.

POLICY

First, political leadership needs to step up legislative and policy support for the sector to take a different and more desirable direction. The government needs to enact laws that attract and guarantee investors a stable operating environment.

Fiscal policies, for instance, need to be streamlined between national and county governments to prevent double taxation. Besides, unnecessary burdening of investors with endless taxes and levies can only dampen their spirit. A glance at market analyses and research can easily make many a would-be investor shy away.

Laws and policies must also offer protection to manufacturers’ intellectual property rights and create powerful enforcement regulations against counterfeits.

EXPORT SHARE

Secondly, guarantee a market for Kenyan products locally and abroad. President Uhuru Kenyatta’s latest Jamhuri Day speech directed manufacturers of leather products for the uniformed forces to buy hides and skins locally. And all these will, from the next financial year, be locally manufactured.

The directive will not only drive the “Buy Kenya, Build Kenya” initiative but also build local capacity for exports.

Having adopted building a self-sustaining export-oriented industrial sector as an anchor policy to boost industrial growth, there is a need for the government to lobby for an expanded export share within the EAC, EU and Agoa and other markets. It should also seek new agreements for its diversified product offering.

REAP BENEFITS

While agriculture is the backbone of the economy, we are yet to fully reap benefits from it. We need to enhance agro-processing, whose output stands at a pitiful 16 per cent. That would create tens of thousands of jobs, translating to billions of shillings.

The third essential lifeline is infrastructure. Transport and energy are critical to industries. Amid commendable strides in building roads, airports and railways, reliable and affordable energy is still a challenge.

Kenya has one of the highest electricity prices and, sadly, number of power outages regionally on a monthly scale. The outages place manufacturers at a crossroads, where they have to make the difficult choice of suffering idle time or purchasing costly power generators. Backouts cause losses in half-processed goods worth millions of shillings.

RELIABLE SUPPLY

Amid efforts at achieving sustainable and reliable supply, halved electricity costs during off-peak hours (10pm-6am) will significantly cut production costs and push the country towards a 24-hour economy. Fourth is political stability.

Political tensions and instability common during the elections should be addressed. Businesses avoid countries where return on investment will be diminished or obliterated.

Fifth is developed worker skillset. Modern manufacturers are leveraging on technology to drive their production. Therefore, a worker with the necessary skills is essential in guaranteeing increased labour productivity and innovation.

ANALYTICAL SKILLS

Our education system has focused on memorising facts and formulas and regurgitating them during exams; hence, most graduates lack problem-solving and analytical skills.

Manufacturing could be the doorway to realising the other three ‘Big Four’ agenda items.

Mr Kibiru is the Senator for Kirinyaga County and chairman of the Senate Committee on Tourism, Trade and Industrialisation. [email protected]