INNOVATION

Local manufacturers urged to capture Kenyan market

Kenya has been heavily depending on imports from China.

In Summary

•About 57 per cent of manufacturers have been forced to outsource inputs from other countries as a way of coping with the disruption of supply chain from China.

•Uhuru’s administration has been keen to enhance manufacturing from 9.2 per cent to 20 per cent of GDP by 2022.

Trade CS Betty Maina.
Trade CS Betty Maina.
Image: COURTESY

Kenyan manufacturers should identify current market needs and strive to meet the demand, Industrialization, Trade, and Enterprise Development Betty Maina has said.

This comes in the wake of shifting trade patterns between Kenya and international markets.

Imports from China, Kenya’s biggest trading partner plunged by at least Sh58.64 billion in the first two months of the year as the coronavirus outbreak disrupted the supply chain.

About 57 per cent of manufacturers have been forced to outsource inputs from other countries to bridge the disruption of the supply chain from China.

 
 

Kenyan imports from China are valued at approximately Sh371 billion while exports to China stand at Sh11 billion (Economic Survey, 2019).

A survey by the Kenya Association of Manufacturers (KAM) shows about 82 per cent source their inputs or export to China, hence faced a direct risk of supply chain disruption.

China alone accounts for about 21 per cent of Kenya’s imports, meaning more than Sh200 billion worth of products may need to be sourced elsewhere or substituted by local production.

“People should be able to identify new business opportunities. There is no reason why we should not take advantage of that,” CS Maina told the Star in a telephone interview yesterday.

The country has already ventured into the manufacture of masks and ventilators and the processing of sanitiser in the wake of the virus.

“There are other sectors to look at including online meetings apps which are currently highly used. We can also grow our e-commerce, in short there is a lot of opportunities now and post Covid-19,"Maina said.

Apart from China, Kenya also heavily depends on imports from India, UAE, Saudi Arabia and South Africa.

 

Other markets are Japan, UK, US, Germany, Netherlands, and France, which are major import sources for Kenya.

Top imports from China,  include electrical machinery and equipment, mechanical appliances, nuclear reactors, railway or tramway locomotives, iron and steel, furniture, and textile.

With disruption on the Kenya supply line, local businesses have been seeking alternative markets among them Turkey and India, CS Maina said.

Her call comes at a time when the Kenya Private Sector Alliance is also pushing for growth of local industries and intra-africa trade.

“This may be an opportunity for Kenya to harness and grow local industries, supporting existing ones to expand their capacity or incentivizing the creation of new industries for import substation as well as leverage on the regional market such as EAC and Afcfta,” Kepsa notes.

The government and private sector have been pushing for the uptake of local content through the ‘Buy Kenya, Build Kenya’ initiative, with manufacturing as one of the four pillars of President Uhuru Kenyatta’s ‘Big Four Agenda’.

Uhuru’s administration has been keen to raise manufacturing from 9.2 per cent to 20 per cent of GDP by 2022.

Targeted sectors include textile, leather, agro-processing, construction material, oil, mining and gas, iron and steel, ICT and fish processing.

These, the government believe can create at least 600,000 new jobs with 100,000 being in the apparel sub-sector.