The Kenyan economy has continued to register a positive GDP growth rate from 2003 achieving the highest growth rate of 7% in 2007. However, for the country to become a globally competitive and prosperous nation, an average Gross Domestic Product (GDP) growth rate of 10 per cent per annum should be achieved over the next 18 years. This requires restructuring the economy through industrialization. This sessional paper therefore sets the base for increasing growth rates, generation of sufficient employment opportunities, and fostering Kenya’s integration into the global economy.
This National Industrialization policy framework has been developed through a consultative process involving the public sector, private sector, civil society, development partners and non-governmental stakeholders. It takes into cognizance the Vision 2030 aspirations; current status of the Kenyan economy; changes and development in the global economy; challenges of the industrial sector; and opportunities arising therefrom. It also takes into account some of the lessons learnt and best practices from Newly Industrialized Countries (NICs).
This policy is aligned to the Kenya Vision 2030 which aspires to transform Kenya into a middle income rapidly-industrializing country, “a globally competitive and prosperous nation, offering a high quality of life to all its citizens” in a secure and healthy environment.
This policy framework focuses on value addition for both primary and high valued goods; and linkages between industrial sub-sectors and other productive sectors to drive the industrialization process and aims at providing strategic direction for the sector growth and development. The overarching policy objective is to enable the industrial sector to attain and sustain annual sector growth rate of 15% and make Kenya the most competitive and preferred location for industrial investment in Africa leading to high employment levels and wealth creation.
The approach to be used in this policy framework is dual as it encourages and export oriented approach with import substitution for identified strategic industries. The broad policy interventions include priopritizing the development of industrial sectors into three broad categories namely:
- Labour intensive sectors (Agro-processing; textiles & clothing; Leather & leather goods);
- Medium to high technology sectors (Iron & Steel; Machine tool & spares; Agro-Machinery & farm implements; and pharmaceuticals); and
- Advanced manufacturing technologies (Biotechnology & Nanotechnology).
The policy provides for a broader engagement framework within which all stakeholders, including the public and private sector; civil society and development partners will contribute and play their respective roles in industrial development through the National Industrial Development Commission (NIDC). The membership of the commission comprises representatives from both public and private sectors thereby embracing the principle of public-private partnership in industrial development.
This policy framework also recognizes that accessibility and affordability of financial services is most critical to the acceleration of industrial growth. To facilitate financial access, the policy recommends the establishment of an Industrial Development Fund (IDF).
Finally, I would like to thank all those who participated in the process of developing this Sessional Paper. I urge all stakeholders to strive towards the full implementation of this policy that will spearhead the realization of Vision 2030.
Hon. Henry Kosgey, EGH, MP
MINISTER FOR INDUSTRIALIZATION