Kenya should industrialise to avoid economic decline

This story has significance for readers across Kenya and beyond.

There is one question every Kenyan should ask before the next general election: How will Kenya create millions of decent jobs for its young people? Closely linked to that is an even bigger question: How does a nation become rich?

History provides only one convincing answer. Nations become prosperous by producing more than they consume, manufacturing more than they import, exporting more than they buy, and creating wealth through productive enterprise. In short, they industrialise.

Large-scale industrialisation is the only proven path to sustainable wealth creation and mass employment. Every country that has successfully escaped poverty has done so by building a strong manufacturing base.

Industrialisation creates millions of factory jobs, but its impact extends far beyond the factory. Every manufacturing job supports many others in agriculture, transport, logistics, construction, engineering, finance, technology, education and professional services. A single textile factory creates demand for cotton farmers, truck drivers, warehouse operators, machine technicians, accountants, software developers, security firms, restaurants and countless small businesses. Manufacturing is the engine that pulls the entire economy.

The first duty of any government is to create conditions in which its citizens can find productive work and earn dignified livelihoods. Yet for decades, successive Kenyan governments have effectively accepted that the majority of young people will survive in the informal economy. Today, an estimated 85 per cent of young Kenyans are trapped in unemployment, underemployment or insecure informal work. That is not simply an economic challenge. It is a failure of national leadership.

It also explains why thousands of talented young Kenyans are leaving the country every year in search of opportunities abroad. They are not abandoning Kenya because they lack patriotism. They are leaving because their own economy has failed to offer them hope. No country should accept the export of its brightest and most energetic generation as a normal feature of national life.

Governments have responded with youth empowerment funds, cash grants, subsidised loans and temporary public works programmes. While these initiatives may generate political headlines, they cannot solve structural unemployment. No government can directly employ millions of people. No public works programme can absorb an entire generation. No financial handout can substitute for permanent, productive employment created by a growing private sector.

Former President Mwai Kibaki understood this reality. Through Vision 2030, he set Kenya on the path towards becoming "a newly industrialising, middle-income country." His vision recognised that national prosperity would not be built on consumption, speculation or government spending alone, but on production, exports and manufacturing.

Unfortunately, the succeeding governments gradually abandoned that industrialisation agenda. Long-term economic transformation gave way to short-term political priorities. Vision 2030 was increasingly replaced by fragmented flagship projects, many of which had little or no connection to building Kenya's productive capacity. The consequences are visible across the economy.

Kenya has invested hundreds of billions of shillings in roads, railways, ports and other infrastructure, much of it financed through borrowing. Infrastructure is important, but infrastructure alone does not create prosperity. Roads, ports and railways only generate lasting economic returns when they serve thriving factories producing goods for domestic and international markets. Infrastructure without industrialisation is like constructing highways that lead nowhere.

The tragedy is that while Kenya accumulated debt to finance infrastructure, it failed to create the productive industries capable of generating the jobs, exports and tax revenues needed to repay those investments. Instead, millions of young people remain confined to low-productivity informal employment.

The country’s top leadership must resist the temptation to pursue politically attractive mega-projects that do little to strengthen the productive economy. Every major public investment should be evaluated against one simple question: Does it directly support Kenya's industrialisation? If the answer is no, it should not become a national priority.

History leaves little room for debate. Britain transformed itself through the Industrial Revolution. Japan rebuilt after the Second World War by becoming a manufacturing powerhouse. South Korea, Singapore and Taiwan followed similar paths. China lifted hundreds of millions out of poverty through industrial expansion. More recently, Vietnam and Bangladesh have demonstrated that developing countries can transform themselves within a single generation by making manufacturing the centrepiece of national policy.

No country has become wealthy simply by consuming what others produce. Yet Kenya increasingly imports products that it has the skills and resources to manufacture itself. We import textiles, garments, pharmaceuticals, electronics, machinery, furniture, processed foods and countless consumer goods. Every imported product that could have been manufactured locally represents jobs exported, factories never built, businesses never established and opportunities permanently lost. Our growing dependence on imports is not merely a trade deficit; it is evidence of a deeper failure to build a productive economy.

Industrialisation must be at the very centre of Kenya's national renewal. This will require more than political goodwill. It demands technical competence and the courage to confront the structural barriers that have frustrated industrial development for decades. The high cost of electricity, expensive credit, inconsistent government policies, bureaucratic inefficiency and the enormous burden of corruption must all be addressed if Kenya is to compete with successful manufacturing economies.

But policy reforms alone will not be enough. Industrialisation must become a permanent national commitment rather than the policy preference of whichever administration occupies State House. Like President Kibaki, I believe Kenya should adopt a 25- to 30-year industrial transformation programme that survives changes in political leadership. Such a programme cannot succeed if every new president abandons it in favour of personal legacy projects.

Kenya therefore requires a constitutional and institutional framework that protects long-term Industrialisation Master Plans from electoral politics.

We industrialise—or we continue to decline. We must industrialise at scale; there is no other way to grow and to create mass employment.

Mr Shollei is a Nairobi-based business consultant

Reporting originally appeared via Nation Africa. Read the full source for additional context.