It is okay to harbour the dream of becoming a newly industrialised in the decade but let’s walk that journey step by step, starting with fixing our foreign consumption policy.
It is no longer news that Kenya has an ambition of becoming a middle income country in the next 12 years.
That dream, which has been expounded in economic blueprints, has received a lot of attention in recent years.
Official bravado goes further to say that the dream is actually to become a newly-industrialised nation within that timeframe.
That’s what calls for a reality check. A nation that is aspiring to become industrialised is one with policies that enable industry to thrive and produce surpluses for sale to the world.
In Kenya, however, official trade statistics communicate a different message.
Kenya’s appetite for foreign goods appears to be growing every month, making it more of a global retail store than the world’s factory.
Latest data indicate that trade deficit, the gap between import and exports, widened to nearly Sh500 billion in the first five months of the year, an all-time high for that period.
The figures show that imports increased by nearly Sh58.12 billion, or 8.26 per cent, to Sh761.28 billion, while exports rose by 7.53 per cent to Sh267.02 billion.
That makes for a deficit of Sh494.26 billion between January and May in keeping with a trend that has persisted in the past 10 years. It would be understandable if items that cannot be sourced locally like fuel and machinery were the only foreign goods coming in, but that is not the case here.
Private and public entities are importing everything, from simple textiles, food items, furniture and matchboxes to complex machinery and arms.
That also makes nonsense of the official Buy-Kenya Build-Kenya call. The reality is that every consignment of imports means Kenyan jobs, forex reserves and industrial verve are depleted by the same margin.
In other words, imports weaken the shilling and migrates local jobs to factories in places like China and India, which together shipped in goods worth Sh249.57 billion in the five-month period.
It’s no wonder then that a number of factories have either relocated to other destinations or ground to a halt in the last 10 years.
It is okay to harbour the dream of becoming a newly industrialised in the decade but let’s walk that journey step by step, starting with fixing our foreign consumption policy.
PAYE Tax Calculator
Note: The results are not exact but very close to the actual.
