Opinion & Analysis

Transforming manufacturing sector will spur economic growth

Kenya finds itself at a critical juncture where it has the opportunity to further define and positively shape the economic and social trajectory of the country for years to come.

Achieving sustained growth and development is not an easy task and a number of challenges in achieving the next phase of growth remain, such as job creation and the development of critical infrastructure.

As a regional economic powerhouse, Kenya is increasingly integrated into the global economy. History has demonstrated that some of the most resilient economies are those that have invested in and maintained a vibrant manufacturing sector; Kenya’s continued growth and integration in the global economy should be based on the creation of a strong and vibrant manufacturing base.

The task in building the platform for the next phase of Kenya’s economic development is, therefore, to transform the economy from a supplier of raw agricultural products, which is also highly dependent on imports, to one of added value manufacturing in the intermediate and capital goods segments. Some of the areas that have significant potential include Fast Moving Consumer Goods (FMCG’s) and processed food products.

Robust

Kenya’s manufacturing sector directly employs over 250,000 people. An additional 1.4 million people are employed through the manufacturing supply and distribution chain, representing 13 per cent of the country’s total employment.

Agriculture has always been a mainstay of the Kenyan economy and it will always play an important role, especially in rural areas. However as the country develops, the effect that a strong manufacturing base can have on an economy must not be understated.

In developing economies such as Kenya’s, every manufacturing job has a multiplier effect of creating an estimated 10 additional indirect and induced jobs. 

With its well-educated workforce and relatively strong tertiary education sector, the country is well positioned to create the right environment for advanced manufacturing and the high-wage high-skill jobs it brings with it.

Kenya plays an important role as a regional trade hub; its geographic location allowing it to both benefit and facilitate trade regionally. The EAC remains a very important destination for Kenya’s exports, particularly given closer regional integration among EAC member states.

Government support is a necessary catalyst for creating an investment environment and a robust manufacturing sector. By putting to work the country’s natural resources and human talent, Kenya can transform its manufacturing sector to generate sustainable economic growth and long-term prosperity.

The writer is the president, Dow Africa