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Industry-led growth strategies need State backing to succeed


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Industry-led growth strategies need State backing to succeed


A man at work at Rivatex East Africa Limited in Eldoret town, Uasin Gishu County during a visit by Industry Principal Secretary Dr Juma Mukhwana at the factory on January 13, 2023. PHOTO | JARED NYATAYA | NMG

The manufacturing sector’s contribution to Kenya’s GDP tumbled from 9.3 percent to 7.2 percent in the five-year period between 2016-2021, according to the Kenya National Bureau of Statistics.

This is way below the 20 percent target the sector is aiming to achieve by 2030.

We therefore urgently need to re-think our industrial model and adopt strategies that will make the sector the engine of the country’s transformation into a middle-income economy.

To make Kenya a serious industrial hub requires strategic thinking.

Even as we push the government to address concerns raised by manufacturers, notably, reduced cost of power, tax incentives for investment, and a predictable regulatory environment, we must quickly explore ways of enhancing Kenya’s industrial output and efficiency.

Fortunately, a lot is happening globally and I have in mind three mega-trends that are changing the world of industrial operations.

The first is the optimisation of industrial processes using innovative technologies like Artificial Intelligence to create ‘intelligent factories’ of the future.

Here, we are talking of not just the automation of industries but also the use of innovative technologies like data analytics to achieve higher levels of throughput and yield while reducing costs.

As a sector, we cannot escape the disruptive impact of technology. Where does the government come in to support such industry-led initiatives?

Investing in new advanced technology is, of course, not cheap but developing nations like Kenya that harbour industrial dreams must be willing to make the technological leap of faith.

A key reason the so-called Asian Tigers were able to develop into industrial giants was their willingness to embrace advanced technologies despite being relatively poor economies at the time they made this important decision.

The second mega-trend is re-skilling and upskilling the local industrial workforce with new technical and knowledge capabilities for the fast-changing global industrial workplace.

To work with new technology, workers need digital among other skills as a basic labour parameter.

We also need to invest heavily in STEM in our schools and in addition, equip our learners with ‘soft skills’ like emotional intelligence, critical thinking, communication, creative thinking and leadership, that prepare them for a competitive industrial environment.

The third mega-trend is building a sustainable manufacturing value chain that is capable of withstanding short and long-term shocks.

The aftershocks of the global pandemic and the war in Ukraine have forced manufacturers to focus more on strengthening supply chain resilience.

Hence the need for the local industry to plan better for unpredictable events including climate-change-related disruptions as a short and long-term growth strategy.

Also, manufacturers are under pressure to meet higher consumer demands and deliver products at a price that meets their expectations.

This means going beyond just producing quality products to focusing more on how such products add value to the customer’s aspirations and daily life experiences.

Malde is the commercial director of Pwani Oil Products.

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