Economic Transformation is only Possible Through Local Industry

By Phyllis Wakiaga

We are Standing at the Precipice of Profound Change

And to experience this change as a country we must reaffirm our commitment to building, creating, adding value and taking pride in the products that we make. In bolstering manufacturing, we will realize that we cannot continue to speak of innovation and development without basing it heavily on industrialization for our own sustainability. Our change will come from perceiving manufacturing not as individual companies and factories in urban and peri-urban areas; but as the solution for our food crises, the answer to durable infrastructure and productive jobs, the cultivator of human capital and the only way to secure future economies.

Manufacturing, in addition to being the backbone for strong economies all over the world, makes it possible for countries to create opportunities for social change including robust growth and sustenance for agrarian communities, as well as broadening existing education curricular to achieve inclusivity. The Equitable Innovations Economic Initiative in America, released a report earlier this year that emphasized the necessity to create a manufacturing base that will nurture a ‘new breed of makers’. This was in reference to their statement that cities’ problems can be solved by an intentional and firm drive for industrialization. The term ‘new breed of makers’ references the use of highly qualified, locally-based human capital to steer industry to address challenges through the use of locally found resource and technology.

Over the course of last week when Kenya hosted it’s first-ever Manufacturing Summit and Expo, this ‘new breed of makers’ remarkably presented wares, products, food stuff, textile and apparel of top-notch quality, some even with global recognition, all made from locally sourced raw material and even better, all processed locally. Kevian Kenya for example buys fruit from local smallholder farmers, uses cutting edge technology installed at its Thika plant to process them, and, in adherence with the standards set by the Kenya Bureau of Standards and Global market standards, distribute their products beyond our borders and the region. This has profound effects in terms of building capacity for local fruit farmers to supply quality fruit whose concentrate is competitive in a global market. It means that the company invests in soil experts, information on appropriate farming methods, training farmers on how to keep up with changing climate conditions in order to continue to supply their fruit etc. All this just from one company.

But it is not just ‘well-established’ companies that demonstrate the existence of the ‘new breed of makers’. SMEs, especially, are shaking up perceptions and means of industrialization through their innovation and ability to use technology to thrive. Akinyi Odongo a Kenyan designer, and owner of MEFA creations did not let the fact that she does not have the capacity to produce apparel on her own, deter her from expanding her services beyond our borders. Akinyi uses material sourced from all over the world to create fashionable clothes for a diverse clientele, and then subcontracts the production to a local enterprise, Bedi Investments. Subcontracting is a major way to grow local manufacturing and as much as many success stories feature ‘big’ companies subcontracting to SMEs, Akinyi’s story which works vice-versa highlights the importance of investing in local facilities to enable them to, in turn, support the growth of SMEs through the expansion of their markets.

It is important to note that contrary to common perceptions, manufacturing is not ‘competing’ with other industries, such as the services sector, but rather is an ‘enabler’ for productivity for all other sectors. The United Nations Economic Commission for Africa has stated that manufacturing is especially important in advancing technologies in many societies due to ‘Its leading role in diffusing technological progresses’. So it ceases to be a question of Manufacturing vs Services or other sectors, it becomes evident that you must grow the manufacturing sector in order for the other sectors to do well.

So creating opportunities to industrialize and to break the poverty cycle in our country is the only way to go. There is no reason that our country, in fact our entire continent should, for example, import food, yet we own two thirds of the world’s future arable lands. There is no excuse for poor productivity and high unemployment rates when the continent’s population is expected to double to 2.5 billion in 2050 a huge percentage of which will be young people of between 16 to 40 years according to the World Bank.

Indeed, local manufacturers were impressive in their display of locally made products but these have only succeeded after crossing a lot of hurdles and despite lack of sufficient investment in value addition. Structural transformation which is broad-based and inclusive is within reach but we need to be deliberate in centering manufacturing as its anchor and engine.

The writer is the CEO of the Kenya Association of Manufacturers and the local representative for Global Compact Network in Kenya. She can be reached on ceo@kam.co.ke.