Why the National Automotive Policy is a big win for industry 

By Job Wanjohi 

A country’s prosperity is driven by intentional actions to drive inclusive development where no citizen is left behind. It is driven by an economy that harnesses the ideas and talents of its people, and as a result, builds an enabling environment for all to flourish by empowering them to maximize their unique potential, and play their part in baking the national cake. 

Over the years, Kenya has carried out significant reforms geared towards improving the business environment and driving competitiveness. Some of these include active participation in negotiations for regional and bilateral trade agreements, as well as enactment and modernization of various business-related laws. The government has also undertaken trade-specific policy measures to boost productivity in the agriculture and manufacturing sectors.

Most recently, the Cabinet Secretary, Ministry of Industrialization, Trade and Enterprise Development approved the National Automotive Policy, which has been pending since 2018. The National Automotive Policy seeks to create an enabling environment for the automotive sector to realize its full potential and position the country as a major player in the industry. The policy aims at improving the local automotive assembly ecosystem to expand the local market size by promoting the manufacture of local parts.  

A shot in the arm for the local automotive sector, the policy provides for institutional frameworks through the establishment of the National Automotive Council to activate and creates a national platform for dialogue on automotive issues. Its role will be to facilitate the sector’s long-term growth and development. This shall be done by addressing all issues relating to the assembly and manufacture of motor vehicles, motorcycles, tractors, and automotive parts in Kenya. The Council Membership shall comprise of representatives from Government and automotive sector stakeholders. This mirrors best practices from countries that have an advanced automotive sector. 

It shall also harmonize regulations and standards affecting the motor vehicle industry. This will be achieved through identifying and filling gaps in standards and regulations; identifying the inadequate capacity to implement existing regulations and establishing mechanisms to develop such capacity and development of standards within the EAC region. 

The policy recognizes and complements existing policies and strategies on local content and product utilization. It provides opportunities for rewarding incremental uptake, collaboration and utilization of locally manufactured products that meet the standards and specifications of Original Equipment Manufacturers (OEMs). It also envisions supporting capacity building, to address mismatch between training and automotive industry skills by equipping automotive centres of excellence in the country. 

So far, to drive the automotive industry’s growth, government has gazetted new assembly regulations, reduced the importation age for commercial vehicles and given preference to locally produced items, which include vehicles, through the Public Procurement and Asset Disposal Act.

We remain optimistic that the policy will be fully implemented. In doing so, we shall see a reduction in the overreliance on imported second-hand vehicles. Kenya will realize her long-overdue dream to manufacture her own car, driven by enhanced innovation as well as research and development for local design and engineering to promote clean, safe, efficient and comfortable mobility products.  Automotive sector growth will also increase the manufacturing sector’s share to the country’s Gross Domestic Product (GDP).  We shall also see enhanced value addition through local manufacturing and joint ventures with global value chain players to produce affordable brands and models in Kenya. Finally, by scaling up local production, we shall expand our capacity to export. 

KAM remains committed to working with the Government to drive the competitiveness and productivity of local industry. We shall continue to collaborate in our endeavour to turn Kenya into an industrialized nation, with the capacity to produce for local, regional, and international markets. 

The writer is the Head of Policy, Research and Advocacy at Kenya Association of Manufacturers. He can be reached at info@kam.co.ke.