Tough action to foster industrialisation

November 4, 2010
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, NAIROBI, Kenya, Nov 4 – The government has acknowledged that tough decisions will have to be made to unlock the potential that exist in the industrial sector.

Industrialisation Permanent Secretary Eng Karanja Kibicho said on Thursday that the country has to aggressively begin to implement reform measures that will spur the growth of the sector whose contribution to the GDP has been less than 10 percent for the last three decades.

“There’s no country in the world that has developed without throwing some caution to the wind and decided that we are going to implement these bold steps because it is good for our country,” he stated.

For the country to become an industrialised state in the next two decades as spelt out in its development blue print Vision 2030, the PS pointed out that such measures would have to be made from the top political level 

“The Industrialisation process is a political decision and if we are to go anywhere, we must address that as a fact. Just like we put political pressure to have a new Constitution, we must put pressure to have industrialisation,” he emphasised.

For a long time, industrialisation issues which until recently they were handled in a department in the trade ministry have not been taken seriously and this has also been reflected in the allocation of resources to the sector.

The over reliance of imported goods and services, uncoordinated levies, high import duties and soaring energy and logistical costs have also contributed to the slow growth of the industry.

Manufacturing on which the industrial sector is anchored is one of the six industries that have been identified to drive the country towards the attainment of the Vision 2030 goals.

However, its growth has been curtailed by the country’s uncompetitiveness which has been characterised by high cost of doing business that has in turn resulted in the relocation of major corporations to neighbouring countries.

Sluggish growth has also been witnessed in other sub-sectors such as in mining and quarrying and processing. And while the construction sector has been registering positive growth, its growth is still hampered by the high cost of raw materials and energy.

To transform the fortunes of these areas, Eng Kibicho called for the formulation of policies that would address issues of value addition especially in the iron and steel industries which are the main drivers of manufacturing activities.

Efforts must also be made to create job opportunities, support small enterprises to graduate into large firms and also increase the market share of the exported goods into the regional market from seven percent to 20 percent.

The official spoke during a stakeholders’ workshop on the draft National Industrialization Policy which has been formulated to promote equitable industrial development in the country.

Industrialisation Assistant Minister Nderitu Muriithi said the policy has been structured into seven chapters which outline the different priority areas that can transform the Kenya into a newly industrialised country through high value addition manufacturing industries, the increase in exports of manufactured products, increase in employment and product diversification.

The policy he said, also stresses strong linkages between industries and the key sectors of the Kenyan economy like infrastructure, energy, agriculture and construction.

Mr Muriithi said the ministry hoped to finalise the policy soon after input from key stakeholders after which it would be tabled in Parliament.

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