OPINION: Kenya moving in the right direction; investing in local manufacturing industries


OPINION: Kenya moving in the right direction; investing in local manufacturing industries
Workers at Rivatex in Eldoret working on mass production of masks. PHOTO| COURTESY

By Allan Chesang

Kenya was ranked position 85 in the Global Rank in imports, with total imports worth US$15 billion (an estimated KES 1.5 trillion) in 2018.

Our top 5 import commodities were: machinery, mechanical appliances; electrical machinery and equipment; vehicles other than railway or tramway; iron and steel; mineral fuels and oils. A lot has happened in the past 2 years, and I believe this list may soon change.

According to Tullow Oil, Kenya’s Turkana fields holds 560 million barrels of oil, with an expected daily production of up to 100,000 barrels starting 2022.This is promising news and perhaps soon we will no longer have to import as much oil as we do.

This will definitely have a positive impact on the economy as a result of increased revenues from exports, job creation in the manufacturing plants, as well cost reduction owing to reduced expenditure on imports.

The government has made some commendable steps towards promoting local manufacture of commodities. An example is the recent local manufacture of masks and ventilators, as well as the processing of sanitizers in an effort to combat the Corona virus.

As much as the pandemic has exposed some loopholes in our economy, it has also revealed new investment opportunities in areas such as e-commerce, online meeting apps, which are presently being used in high demand.

The government of Kenya aims to increase local manufacture from 9.2% to 20% of the gross domestic product by 2022. One of the ways it has supported this agenda is through the ‘Buy Kenya, Build Kenya’ initiative, that encourages consumption of local products.

KEPSA noted that growing local industries as well as supporting existing ones to enhance their capacity, will gain Kenya leverage in regional markets such as EAC and Afcfta.

The revival of sectors such as leather, textile, fish processing, mining, oil and gas and construction, among others, is vital in its potential to create at least 600,000 new jobs. This will certainly go a long way in achieving Vision 2030, increasing foreign direct investments and increasing GDP.

The government has allocated KES 1.1 billion for the development of textile and leather industrial parks such as the Naivasha Industrial Park. Companies with assembly plants in Kenya are also set to enjoy exclusive preference in the procurement of motor vehicles and motorcycles.

For instance, the restoration of RIVATEX, the textile company based in Eldoret, is expected to create over 3000 new jobs, something the youth in Trans Nzoia will greatly benefit from.

It therefore goes without saying that investment in local industries is imperative, if we want to achieve the Big 4 agenda and other developmental plans. As much as we can, let us maintain an appropriate balance of trade. Reduce imports. Increase exports.

It is time we supported our local industries and encouraged them to flourish. As for the local industry and business owners, be agile. Continuously innovate and work towards delivering goods that are of international standards. That is the only way we can compete with the global ‘bigwigs’ and out Kenya on the map.

Allan Chesang is a commentator on socio-political issues and founder of the Allan Chesang Foundation

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