News

Treasury, October 29, 2015: By Joseph Kipkoech
The Economic Report on Africa 2015 takes cognisance of the fact that Africa has the potential to experience growth greater than the East Asian countries through industrialization.
The recent launch of Kenya’s 10-year Industrial Transformation Programme informs the stance by the Government in pulling out all stops towards industrialising the country.


Industrial development remains inextricably linked to generating impetus in transforming the Kenyan economy to middle income status by 2030. The vision, to move manufacturing back to Africa due to high production costs in other traditional markets such as Asia and Europe, as well as volatile commodity prices, is achievable.
Trade-induced industrialisation is poised to yield structural transformation in Kenya through inclusive growth, efficient utilisation of resources and economic diversification. This transformation will provide unique opportunities to generate direct and indirect employment, foster strong forward and backward cross-sectoral linkages and sustain economic growth.
The statistics by the Kenya National Bureau of Statistics indicate a favourable economic outlook for the country. This is supported by a relatively broad-based growth, with oil discovery, infrastructure development, agriculture, services and domestic demand as the main drivers. Medium-term prospects indicate risks and uncertainties for the country, with fragile recovery of the tourism industry amid declining foreign exchange, an unsustainable current account deficit and tapering of global commodity prices boom.
It has been recognized widely that Kenya, like many Africa countries, needs to correct large trade deficits, innovatively create employment for the working age population, and consciously design trade policies that will favourably contribute to industrialisation in the years ahead.
At the heart of a country that is gearing towards middle income status by the year 2030, the Industrial Transformation Programme has prioritised 10 flagship projects in sectors the country has a competitive advantage. However, agro-processing, fisheries, textiles and apparel leather, oil, gas and mining services will be important in leading the country to a trade induced industrialisation.  
The IMF’s September 2015 review of the Kenyan economy under the 12-month standby arrangement (SBA) and an arrangement under standby credit facility (SCF) approved this year are testimonies that our economy is performing well and the international community and development partners share the same view.
However, it should be noted that despite the global headlines and local shocks such as insecurity that economy like tourism, our development partners including IMF acknowledge that the economy is largely on the right track.
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