Blueprint to revive industrial, manufacturing sectors

September 17, 2015
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"As an emerging economy, moving from agriculture based, low income economy to an industrial, middle income economy, it is paramount that the manufacturing share to GDP increases," Mohamed said.
“As an emerging economy, moving from agriculture based, low income economy to an industrial, middle income economy, it is paramount that the manufacturing share to GDP increases,” Mohamed said.

, NAIROBI, Kenya, Sep 16 – Kenya has unveiled its first-ever blueprint to revive the manufacturing and industrial exports sector.

The decade-long plan, aptly christened Kenya’s Industrial Transformation Programme (KITP) looks beyond import-substitution and export-led policy regime to develop its industries, stimulating Kenya’s ambitions as Africa’s next industrial power.

Anchored on a five-point strategy, prioritising leveraging Kenya’s comparative advantages, the plan aims at growing the manufacturing sector to levels above 15 percent of Gross Domestic Product (GDP) from a static 11 percent over the past decade.

According to Industrialisation Cabinet Secretary Adan Mohamed, Kenya has identified 10 opportunities within the key strategies that will increase manufacturing sector jobs to an additional 435,000 in the next five years and add Sh200bn to 300billion to the GDP.

“As an emerging economy, moving from agriculture based, low income economy to an industrial, middle income economy, it is paramount that the manufacturing share to GDP increases,” Mohamed said.

Under the plan, Kenya will build and innovate on its export engines and continue to support them.

“To boost production and exports, Kenya will work to ease regulations on the sale of the exports while looking to attract a 50 to 100 percent price premium by marketing tea and coffee as a ‘Made in Kenya’ brand internationally,” the Cabinet Secretary said.

“We also plan to offer incentives for local value addition for multinational companies to consider creating opportunities for SME’s by investing in group packaging,” he said adding these efforts will attract Sh20 billion to Sh24 billion in value addition and 10,000 jobs.

Kenya is also eyeing on capitalizing on agro-processing’s global market worth Sh1.47 trillion ($14.7 billion), which Mohamed said the government “is working on attracting investors to develop three to five large integrated value chain ‘Agropolis’ projects with potential to yield Sh30 billion (USD 300 million) in GDP and create up to 60,000 jobs.”

Under the plan, Mohamed said the government plans to enforce the ‘Buy Kenyan, Build Kenya’ policy to nip Kenya’s huge Sh82 billion textile and apparel import bill.

Other efforts will include marketing Kenya leather products abroad and securing international sourcing contracts for leather products.

Mohamed said the blueprint commits to work build on capacity of local firms to profit from Kenya’s infrastructure and investments boom. Infrastructure, Residential and Commercial Construction and oil and gas and mining services have witnessed a massive boom with local firms missing out due to scale and expertise.

“Despite the healthy contribution to GDP and employment, only 8percent of the 6 trillion regional infrastructure construction market is served by domestic firms. The Government has legislated local content rules such that projects worth Sh1 billion are awarded to domestic companies,” Mohamed said.

According to KAM CEO Phyllis Wakiaga, building capacity of Kenya’s local construction companies could yield Sh10bn to 20 billion in GDP and create 30,000 jobs from the bludgeoning industry.

“Kenya stands to make 35 percent of estimated Sh100 billion mining value at stake annually. The Eastern African Oil and Gas Services market could grow rapidly at around 26 percent over the next few years to reach $3.5 billion by 2020,” KEPSA’s CEO, Carole Kariuki said.

Further, industrial parks along major infrastructure corridors including the SGR and LAPSSET Corridor will be created.

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