A brief overview of the industrial manufacturing sector
in Kenya
Kenya has a large manufacturing sector serving both the local market and exports
to the East African region. The sector, which is dominated by subsidiaries of
multi-national corporations, contributed approximately 13% of the Gross Domestic
Product (GDP) in 2004. Improved power supply, increased supply of agricultural
products for agro processing, favourable tax reforms and tax incentives, more
vigorous export promotion and liberal trade incentives to take advantage of
the expanded market outlets through AGOA, COMESA and East African Community
(EAC) arrangements, have all resulted in a modest expansion in the sector of
1.4 % per cent in 2004 as compared to 1.2% in 2003.
The rising levels of poverty coupled with the general slowdown of the economy
has continued to inhibit growth in the demand of locally manufactured goods,
as effective demand continues to shift more in favour of relatively cheaper
imported manufactured items. In addition, the high cost of inputs as a result
of poor infrastructure has led to high prices of locally manufactured products
thereby limiting their competitiveness in the regional markets and hampering
the sector's capacity utilisation. However, the recent introduction of the EAC
Customs Union provides Kenya’s manufacturing sector, the most developed
within the region, a greater opportunity for growth by taking advantage of the
enlarged market size, economies of scale, and increased intraregional trade.
PricewaterhouseCoopers has unsurpassed experience serving the major enterprises
in the manufacturing sector in the East African region. We are also at the forefront
of developments within the manufacturing sector through our close partnership
and membership of the Kenya Association of Manufacturers.
