The Kenyan government on Tuesday called for an urgent need to collaborate to achieve faster growth in the manufacturing sector which is crucial in improving productivity.
Francis Owino, principal secretary, Ministry of Industrialization stressed the importance of driving the competitiveness of the manufacturing sector to help improve the country’s overall performance and thus boost trade and investment.
“We will continue to collaborate with various stakeholders to achieve targets in the policy-making formula to get Kenya in the global competitiveness map,” Owino said in Nairobi during the virtual launch of the UN-backed Competitive Industrial Performance (CIP) Index Report, 2020.
The report by the UN Industrial Development Organization (UNIDO) draws a picture of a global manufacturing sector recovering in strength in the context of a macro environment that has been shaking by economic and political insecurity and reduced trust in the benefits of globalization.
The report shows Kenya is at position 115 out of 152. “This is far from our expectations and calls for an urgent need to collaborate to achieve faster growth in the sector,” said Owino.
The rank puts the country lower than other competitor African countries but high compared to its east African counterparts.
Egypt and South Africa rank at position 64 and 52 respectively whereas Tanzania is 123 and Uganda is position 128.
Julius Muia, Principal Secretary for National Treasury, said competitiveness is very key to Kenya’s industrialization.
“With robust industrialization, we can create employment for our people, get more taxes and provide more tax incentives and waivers. Quantifying the competitiveness of the manufacturing sector provides an evidence-based basis to which we can make policies,” said Muia.
The report which benchmarks the ability of countries to produce and export manufactured goods competitively provides a yardstick against which Kenya can compare its manufacturing competitiveness on a global level.
The report indicates that China, which is ranked second in the CIP Index report, is very strong in manufacturing due to the use of high technology which is applied by 30.6 percent of its manufacturers whereas only 9.3 percent are resource-based manufacturers.
Comparatively, Kenya’s manufacturing sector export structure is dependent on resource-based manufacturers at 42.9 percent with high tech manufacturers only accounting to 5.5 percent, says the report.
Mucai Kunyiha, chairman of the Kenya Association of Manufacturers (KAM), said Kenya’s competitive performance needs to be improved to spur productivity, growth and development.
He further noted that though Kenya continues to progress in the Ease of Doing Business Index, there is a need to look into the country’s ability to sustainably produce goods and services.
“We must also look at our ability to produce goods for which there is a market at a price and quality that their market is willing to pay for. Whilst Kenya ranks top position within EAC countries in this CIP Index, a lot still needs to be done in order to be competitive at a global scale,” Mucai said.
Kawira Bucyana, UNIDO representative to Kenya, said the UN agency is cognizant of the importance of a competitive manufacturing sector to facilitate trade.
“By promoting competition we can prioritize economic resources for greater prosperity. We reaffirm that we will continue to support all stakeholders to improve Kenyans industrial performance and hope to see improvement of Kenya’s ranking in the next two years,” said Bucyana.