Kenya to Promote Manufacturing to Boost Exports
Kenya plans to promote the manufacturing sector in order to boost exports, a government official said on Tuesday.
Chris Kiptoo, Principal Secretary in the Ministry of Trade and Industry, told journalists in Nairobi that the majority of global trade is in manufactured goods and not raw commodities.
"In order to promote exports, we must increase the capacity for the manufacturing sector by increasing its share of Gross Domestic Product from ten percent to twenty percent," Kiptoo said during a media briefing on the upcoming Kenya Trade Week that will take place from July 29 to Aug. 1.
The second edition of the Kenya Trade Week will showcase what Kenya has in stock for both the domestic and export market.
Kiptoo said that the manufacturing sector's share of GDP has stagnated in the past few years due to a number of challenges such as high cost of production.
He noted that the government is undertaking a number of reforms including lowering the cost of electricity in order to make Kenya a globally competitive manufacturing destination.
The Principal Secretary said that Kenya's traditional exports markets have been in the East African region. "However, local manufacturers are facing fierce competition which has reduced the share of Kenya exports," he added.
Kiptoo observed that Kenya is planning to take advantage of the numerous bilateral and multilateral trade agreements signed to diversify export markets.
"We also want to push more exports into lucrative markets such Ethiopia, Democratic Republic of Congo, Nigeria and Angola," he noted.
The government official said that Kenya is prioritizing manufacturing because of its ability to provide numerous employment opportunities.
He said the government has set a target to create over 1.3 million jobs manufacturing in the next five years through access to key strategic markets in Africa, Europe and the United States.
Peter Biwott, the CEO of the Export Promotion Council (EPC), said that the National Trade Policy will guide Kenya to transform into an export-led economy.
Biwott said that the policy will provide a vital nexus between the country's efforts for investment promotion and trade development.
Biwott said that Kenya's share of global trade is very low compared to its potential as exports are growing faster than imports.
The export agency said that the key to double digit growth of exports is value addition of raw materials that are readily available in Kenya especially in the agricultural and mineral sectors.
Biwott said that currently the Export Processing Zones provide the bulk of manufactured exports from the country.
"However, in order to expand exports even further, we are going to use Special Economic Zones to expand manufacturing capacity," he added.
He noted that Special Economic Zones provide infrastructure facilities required to attract foreign direct investments.