The manufacturing sector in Kenya is dying. Its contribution to GDP has decelerated from a high of 13.5 percent in the early 90s to 7.74 percent in 2018.
Several manufacturers have either closed down or shifted their focus to offshore production. Their main reason is the unprecedented influx of unchecked cheap imports, reduction in custom duties for imported goods under the EAC Common External Tariff, importation of counterfeits, arbitrary taxation and high wages in Kenya.
Some of the largest manufacturers, including multinationals, have moved out of the country, only retaining their marketing and distribution departments to distribute their products manufactured in neighboring countries.
Dairy farmers and milk processors too are on the death row over cheap milk imports at the time supply is at an all-time high.
Bakeries too are taking a flight to neighboring countries. The consequences of losing the manufacturing sector are serious. Kenya will more than likely lose the opportunity to take advantage of the rising consumer expenditure in African which the Brooking Institute estimates will have grown from $1.4 trillion in 2015 to $2.1 trillion in 2025 and $2.5 trillion in 2030.
The World Development Report 2020, Trading for Development in the Age of Global Value Chains, shows that incomes grow most when countries break into simple manufacturing. Read more>>