Discussion Paper No. 03 of 2000 on a Review of Kenya's Current Industrialization Policy

Abstract

Industrialization has been embraced by many developing countries as a means of achieving structural transformation of their economies. In Kenya, the goal of industrialization has long been held as a strategy for economic development. Recently it has received emphasis as the main strategy for addressing the principal challenges of development in Kenya—employment creation and poverty eradication. As such, a policy framework was developed in 1996 for achieving industrialization by the year 2020. The major departure from previous polices on industrialization is its emphasis on selective encouragement of specific industries through a broad array of support by the government over a 25-year period, by which time Kenya will have achieved newly industrializing country status. The present policy framework considers industry as the leading sector for addressing the development challenges faced by the country. It therefore proposes to provide “selected” industries, at various stages in the industrialization process, with the support that will enable them to grow and become exporters of their products. This review examines the major consistencies and inconsistencies in the present and past policies on industrialization. The apparent failure in the strategy is the absence of a holistic approach that considers and addresses the constraints, conflicts and trade-offs facing producers in all sectors of the economy.