Kenya has ranked position 115 out of 152 in the Competitive Industrial Performance (CIP) Index Report, 2020.
This rank puts the country lower than other competitor African countries but high compared to its East African counterparts. Egypt and South Africa rank at position 64 and 52 respectively whereas Tanzania is 123 and Uganda is position 128.
The Report benchmarks the ability of countries to produce and export manufactured goods competitively. It provides a yardstick against which Kenya can compare its manufacturing competitiveness on a global level.
It further indicates that China, which is ranked second in the CIP Index report, is very strong in manufacturing due to the use of high technology which is applied by 30.6% of its manufacturers whereas only 9.3% are resource-based manufacturers.
Comparatively, Kenya’s manufacturing sector export structure is dependent on resource-based manufacturers at 42.9% with high tech manufactures only accounting to 5.5%.
Speaking at the virtual launch of the CIP Report, Principal Secretary Ministry of Industrialization, Dr. Francis Owino highlighted the importance of driving the competitiveness of the manufacturing sector, noting the need to improve our overall performance to boost trade and investment.
“This report shows Kenya is at position 115 out of 152. This is far from our expectations and calls for urgent need to collaborate to achieve faster growth in the sector. We will continue to collaborate with various stakeholders to achieve targets in the policy making formula to get Kenya in the global competitiveness map,” said Dr Owino.
Also at the launch, Principal Secretary for National Treasury, Dr Julius Muia noted, “Competitiveness is very key to our industrialization. With robust industrialization, we can create employment for our people, get more taxes and provide more tax incentives and waivers. Quantifying the competitiveness of the manufacturing sector provides an evidence-based basis to which we can make policies.”
Kenya Association of Manufacturers (KAM) Chairman, Mr Mucai Kunyiha highlighted that Kenya’s competitive performance needs to be improved to spur productivity, growth and development. He further noted that though Kenya continues to progress in the Ease of doing Business Index, there is need to look into our ability to sustainably produce goods and services.
“Ease of Doing Business is a ‘necessary but not sufficient’ condition to improve growth and prosperity. We must also look at our ability to produce goods for which there is a market at a price and quality that their market is willing to pay for. Whilst Kenya ranks top position within EAC countries in this CIP Index, a lot still needs to be done in order to be competitive at a global scale,” added Mr Mucai.
Ms. Kawira Bucyana, United Nations Industrial Development Organization (UNIDO) representative to Kenya concluded the virtual launch by stating, “UNIDO is cognisant of the importance of a competitive manufacturing sector to facilitate trade. By promoting competitive we can prioritize economic resources for greater prosperity. We reaffirm that we will continue to support all stakeholders to improve Kenyans industrial performance and hope to see improvement of Kenya’s ranking in the next 2 years.”
The Competitive Industrial Performance (CIP) Index – Kenya Report is a UNIDO publication launched this morning in partnership with KAM.