Shift Kenya's economic model to fasten growth urges NESC advisor

A shift towards a technology-based model could fasten Kenya’s economic growth, a government advisor has said and warned against the country’s continued reliance on agriculture.

Prof Kun Mo-Chung, an advisor with the National Economic and Social Council (NESC), said the model has helped his country South Korea transform into an economic giant in a short time.

“Korea did nation building through science and technology. Kenya has good brains and hard working youth who can emulate this. We have to think about Kenya of the future where we have more value-added activity to drive growth,” he told a team of visiting Kenyan legislators and energy ministry officials in Seoul.

Since independence 50 years ago, Kenya is reliant on its agriculture sector that contributes about a quarter of its gross domestic product (GDP).

Over the same period, South Korea has in its part radically shifted its economic model from agriculture-based to technology driven. In the early 1970s, agriculture contributed to 75 per cent of Korea’s economy but that has since been slashed to about four per cent after technology-based ventures took over.

“Korea has done wonders in one generation rising from the bottom to the top. Our policy in Korea is one of a creative economy and that has helped us generate more value,” Prof Kun said.

Private consumption generates more than half of the annual output of Asia's fourth-largest economy, but it is also dependent on investment and employment by big export firms such as technology giant Samsung Electronics and carmaker Hyundai Motors.

The official said reliable energy supply is critical in realising such a shift in a country’s economic model and urged Kenya to embrace technologies such as nuclear power to strengthen their energy reserves.

“For industrialisation to occur we need energy and science-based education. In order to power industrial growth you need long-term and organised clean energy such as nuclear,” Prof Kun said.

The Kenyan energy sector, though critical in uplifting the country’s development, has registered slow growth in the past due to the high initial capital outlay and inability to mobilise adequate financial resources to undertake massive investment.

Lack of sufficient energy has in turn frustrated industrial expansion in Kenya for decades despite the availability of huge energy reserves such as wind, coal and geothermal.

Korea has made major leaps towards nuclear power that today accounts for 35 per cent of its national electricity output.

Kenya is presently strengthening its cooperation with the Asian nation for assistance in nuclear technology development as it struggles to quench its thirst for power.

READ: Kenya eyes tax, investment deal with South Korea

Kenya depends on hydropower for about 60 per cent of its energy output but this has proved frustrating especially whenever the country fails to get sufficient rains.

Prof Kun said the creation of the East African Community (EAC) provided Kenya a chance to grow its economy faster under a new technology-based model.