Kenya ranks low in manufacturing

Kenya has been placed in position 115 out of 152 in the Competitive Industrial Performance Index for 2020.

The research by the United Nations Industrial Development Organisation benchmarks countries’ ability to produce and export manufactured goods competitively. 

Although Kenya ranked higher than regional peers, (Tanzania 123, Uganda 128, Ethiopia 134 and Rwanda 142), Industrialisation Principal Secretary Francis Owino said it showed Kenya still had some way to go in manufacturing.

He highlighted the need to improve the local industry’s overall performance to boost trade and investment. 

The research, prepared by Valentin Todorov, Senior Management Information Officer at the Statistics Division of the United Nations Industrial Development Organization (UNIDO), benchmarks the ability of countries to produce and export manufactured goods competitively.

It provides a graphical summary capturing the competitive performance of each of the 152 countries and economies included in the 2020 CIP Index, relative to their performance in previous years and compared to that of the rest of the world.

The report shows that Kenya’s manufacturing sector export structure is dependent on resource-based manufacturers (at 42.9 per cent) with high tech manufactures only accounting to 5.5 per cent.

In contrast, top ranked Germany’s resource-based manufacturers take up 12.2 per cent, with medium tech manufacturers (52.7 per cent) and high tech manufacturers (21.2 per cent) contributing the bulk of their produce.

China, which is ranked second in the CIP Index report, is very strong in manufacturing due to the use of high technology which is applied by 30.6 per cent of its manufacturers whereas only 9.3 per cent are resource-based manufacturers. 

Kenya Association of Manufacturers (KAM) Chairman, Mucai Kunyiha, highlighted that Kenya’s competitive performance e needs to be improved to spur productivity, growth and development. He further noted that although Kenya continues to progress in the Ease of doing Business Index, there is need to look into its ability to sustainably produce goods and services.

“Ease of Doing Business is a ‘necessary but not sufficient’ condition to improve growth and prosperity. We must also look at our ability to produce goods for which there is a market at a price and quality that their market is willing to pay for. Whilst Kenya ranks top position within EAC countries in this CIP Index, a lot still needs to be done in order to be competitive at a global scale.”

Kawira Bucyana, United Nations Industrial Development Organization (UNIDO) represent ative to Kenya, said that UNIDO would be helping Kenya gain a competitive advantage.

“We reaffirm that we will continue to support all stakeholders to improve Kenyans industrial performance and hope to see improvement of Kenya’s ranking in the next 2 years.”

The Competitive Industrial Performance (CIP) Index - Kenya Report is a UNIDO publication was launched in partnership with KAM.