What Kenya must do to spur manufacturing

A modern spinning machine at Rift Valley Textile in Eldoret. [File, Standard]

Like many observers of Kenya, I have puzzled over the disconnect between the plainly great economic potential of the country and the reality of slow growth, especially in manufacturing. Some apologists say an average annual growth rate of 5 per cent over the past 10 years is not bad.

I say Kenya can and should grow at 7 per cent to 8 per cent per year or more. That seemingly modest difference is deceptive. With the population growing at about 2.6 per cent per year, 5 per cent growth in economy means only 2.4 per cent growth in per capita income. At that rate, it will take nearly 30 years to double the income level. If Kenya can raise its growth rate to 7 per cent, the per capita income level will double in less than 16 years. That is big. So, what explains the persistently weak growth and stagnation of manufacturing? Recently, I had a Eureka moment.