Devki investor right on push for local industry protection from imports

Devki Group CEO Narendra Raval

Devki Group CEO Narendra Raval at his steel smelting plant in Samburu, Kwale County on September 11, 2022. 

Photo credit: Kevin Odit | Nation Media Group

I watched Guru, the Devki boss, speak at the official commissioning of their West Pokot clinker factory. It was a simple non-pretentious speech with a strong message for our economic planners — protect local production from unwarranted imports to give a chance to local industrial capacity growth.

The new plant will reduce imports of clinker (used in cement manufacture) and export surpluses, a double score for the balance of payments. The plant will also open a hitherto wasteland to jobs and socioeconomic development.

Local production protection was the industrial growth strategy pioneered by the Jomo Kenyatta government in the 1970s, a path that nearly made Kenya an “economic tiger”. However, it all collapsed in the early 1990s when the IMF pushed Kenya to liberalise trade and allow unrestricted imports. Anchor industries collapsed, leaving industrial areas across Kenya to become ghosts of former selves.

Devki also mentioned that they will develop a similar plant in Kitui County, exploiting what I presume are Mutomo limestone deposits. Devki should go a step further and mine the coal at nearby Mui for process heating.

Kitui coal would be an import substitution venture considering that all the coal and fuel oil used for industrial heating in Kenya is imported. The Kitui leadership should firmly stand up to anti-coal activists, for indeed climate politics can be diversionary.

About half of China’s industrial heating is from coal, making many of our imports from China “non-green.” Shifting to oil import substitution, we can locally refine crude oil lying idle in Turkana County to meet a good fraction of Kenya’s petroleum products demands.

We can seek investors from the East, as these will be more flexible in modelling a refining project that meets our immediate needs.

Imports substitution through commercialisation of local resources needs a major mental shift among Kenyan businesses and consumers who have grown up enjoying imported goods, to embrace local alternatives.

The economic zones coming up across Kenya are unlikely to prosper if not protected from imports unless these ventures are pegged on exports.

Going forward, the government needs to identify anchor industries and agricultural outputs that need to be protected from imports, and gradually increase import taxes of competing imports.

Even the most globalised nations like the USA are imposing restrictions on cheap Chinese tech imports to allow local capacity to grow.

Kenya has the potential to become a nation with strong and competitive production sectors (industries, extractives, and agriculture), but tough decisions are required to protect them from unrestricted imports.

George Wachira, a petroleum consultant, [email protected]

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