Manufacturers need to diversify export products for Big Four to succeed
A thin export product portfolio is among the major hurdles facing Kenya in its quest to become a manufacturing hub.
The country has recently embarked on a grand plan that is expected to see the manufacturing sector grow substantially over the next four years.
This is a central pillar in the Government’s Big Four Agenda.
According to the Kenya Association of Manufacturers (KAM), the country needs to diversify its export products if it plans to emerge as a key manufacturing and export hub.
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Kenyan exports are largely made up of clothing and horticultural produce.
The handful of export products are despite huge access to the American and European markets that have been necessitated by different agreements with Kenya has with the two regions.
“The market is huge but we have to contend with certain realities. One of these is that our exports have to be diversified. If you look at our exports to the US, 60 per cent of the exports are apparels, yet there are numerous other products that we can export to America under African Growth and Opportunity Act (Agoa),” said Simon Githuku of KAM.
“Same with Europe were under the Economic Partnership Agreements (EPAs, we can export almost everything that we produce in Kenya. We need to have our products competitively priced and scale up the value chain in terms of skill and value.”
Githuku spoke yesterday at a forum on Big Four Agenda organised by the Institute of Economic Affairs Kenya.
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The challenge of a few products, he noted is in addition to the traditional hurdles of cheap imports from countries such as China that have flooded Kenya and other markets that local manufacturers could be eyeing.
“There are hurdles such as competition from China that exports everywhere and the fact that Kenyan exports to the East African Community have been declining either due to barriers access markets like Tanzania or our neighbours have been growing their manufacturing industries,” he said.
“There are also a lot of imports to Kenya and the markets that we are targeting from Comesa... there will be competition from countries like South Africa and Egypt being.”
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Big Four AgendaKenya Association of ManufacturersManufacturing Industry