The State is developing a new national industrialisation policy, aimed at transforming Kenya’s manufacturing sector into an export-driven industry.
The proposed policy seeks, among other things, to raise manufacturing’s contribution to the country’s gross domestic product (GDP) from the current estimated 7.1 per cent to 15 per cent by the year 2030, with a longer-term target of 24 per cent by 2063.
According to Industrialisation Secretary, Prof. Erastus Gatebe, the policy will provide a framework for accelerating manufacturing, industrialisation and trade while addressing the shortcomings of the country’s existing industrial policy, which he noted was formulated before the 2010 constitution.
Speaking in Nyeri during a public participation exercise that brought together participants from Nyeri, Murang’a, Nyandarua and Kirinyaga counties, Prof. Gatebe said the review was necessary, as it will align Kenya’s industrial development agenda with the Constitution of 2010 and emerging economic opportunities.
He noted that the new policy will introduce interventions that will make it easier for Kenyans to invest in manufacturing, process locally available raw materials and add value to agricultural and other products before selling them to the domestic and international markets.
He said that with the strategy in place, the government will promote the adoption of digital technology in manufacturing to improve productivity and competitiveness.
“The current policy we are using as a country is quite old, and for us to move to the level of global manufacturing giants like Singapore and align with the Constitution of Kenya 2010, we must have policy interventions that make it easier for Kenyans to invest in manufacturing, industrialisation and value addition while at the same time utilising the digital tools,” he said.
Prof. Gatebe said the proposed policy would prioritise export-led manufacturing and at the same time, leverage regional and continental markets to expand demand for Kenyan-made products.
He cited the African Continental Free Trade Area (AfCFTA) and the East African Community as major untapped opportunities for manufacturers seeking to grow beyond the domestic market.
“We have about 1.4 billion buyers in the African Free Continental Trade Area, and we also have another 700 million buyers in the East African Community. These are markets that need products, and these products can only come from industries. That is why this policy is important, as it will promote export-led manufacturing,” he noted.
Among the other issues that the policy will address include aligning training with industry demands to ensure that youth are equipped with relevant skills that will allow them to secure employment.
The Industrialisation Secretary argued that by strengthening the links between training institutions and employers in expanding the industrial production sector, the country would address the unemployment crisis.
The policy is also expected to address bottlenecks affecting investor confidence such as the high cost of production, which has been a major concern among investors and a constraint on the competitiveness of Kenyan products.
Prof. Gatebe said the government is encouraging counties to explore renewable energy, particularly solar power, to lower the cost of running industries.
In order to allow counties to collaborate with the national government, he said the policy will harmonise county and national industrialisation initiatives through the development of County Aggregation and Industrial Parks (CAIPs).
The Industrialisation Secretary said the parks would enable counties to organise their raw materials, identify competitive value chains and attract investors interested in processing locally available resources.
Nyeri County Executive Committee Member for Trade, Culture, Cooperatives and Tourism, Dr. Lucy Kiogora, welcomed the proposed policy, saying it would provide an opportunity to expand industrial development beyond Kenya’s traditional manufacturing centres.
She said counties had for years supplied raw materials to industries located elsewhere, limiting the opportunities available to local farmers, traders and young people to optimise benefits from their natural resources.
“For a long time we have acted as suppliers of raw materials. We need this policy so that our local farmers and raw material producers can value add and do the processing at the county level and also so that we create employment for our youth at the county, and that way our counties can attract investors, and we finally get to sell not just to the local market but also to regional markets,” she said.
Dr. Kiogora said the proposed policy would help counties develop industries based on their local resources and create opportunities for farmers to earn more from their produce.
She added that the policy’s emphasis on establishing industries outside traditional urban manufacturing centres could help address regional disparities in industrial development.
“In the past, we have seen a few counties, namely Nairobi, Kisumu, Mombasa, and Kiambu, benefiting from industries, but this policy is correcting historical injustices, so to speak, because it will ensure that all other counties,” she said.
The draft policy is currently at the public participation stage. Members of the public have until October 23 to give their views on the policy.
By Wangari Mwangi and George Kabithi
