Kenya must build resilient industries post-Covid to drive recovery

Manufacturing continues to play a critical role in post-Covid economic recovery strategies of many countries.

In a post-pandemic world, the focus will increasingly shift to creating competitive, resilient, inclusive and sustainable industries. This shift is crucial to unlocking the true economic value of manufacturing in the form of creating jobs, fostering innovation and generally enhancing the quality of life for consumers.

The New Year is, therefore, an opportune moment for local manufacturers to reflect on the lessons learnt from the pandemic but more importantly, focus on ways to build industries that are capable of withstanding future disruptions.

This requires industrial reinvention on an unprecedented scale. First, competitive manufacturing will be increasingly anchored on new technologies.

Covid-19 has especially amplified the importance of smart manufacturing. This involves the use of intelligent digital systems that use data to enhance industrial efficiency and productivity. Industry 4.0, involving the transformation of traditional manufacturing using modern, smart technology, is already underway globally.

Kenya can borrow a leaf from countries like Malaysia that are investing heavily in smart manufacturing as a vehicle for achieving and sustaining industrial growth.

However, adoption of technology does not necessarily mean a loss of jobs.

First, there is an opportunity to equip existing employees with new skills for digital manufacturing and the youth to play a greater role in industrial innovation. Second, resilient manufacturing requires rebooting of value chains to make them adaptable to unexpected shocks.

The pandemic has exposed weaknesses in supply chains, with manufacturers unable to access crucial inputs, especially those who rely on complex global supply chains due to lockdown measures to contain the virus. Strengthening domestic supply chains will not only create jobs and business opportunities in value addition but also boost backward linkages to key sectors like agriculture that provide raw materials for factories. The multiplier effect through employment and livelihoods is enormous.

Third, an inclusive industrial sector should primarily focus on supporting small and medium enterprises (SMEs), which constitute the majority of manufacturing enterprises in Kenya.

SMEs also play a crucial role in manufacturing supply chains hence require massive support, especially in the prevailing challenging economic environment. 

To promote the growth of SMEs in manufacturing, the government should enact friendlier policies and regulation that make it easier to establish small industries while improving access to finance and markets.  

Fortunately, the Kenya Association of Manufacturers (KAM) is working closely with the government to develop the Manufacturing SME Hub, whose main goal is to address challenges facing small industries. Such public-private partnerships are key to ensuring SMEs can play their rightful role in transforming Kenya into a competitive, industrial economy as espoused in the Vision 2030.

Fourth, sustainable manufacturing recognises the need to protect the planet from harmful industrial practices such as pollution and wasteful consumption of scare resources.

Green manufacturing is growing in significance as consumers and investors increasingly choose to engage only with environmentally-conscious businesses.

Local manufacturers should invest in recycling and other processes that reduce the impact of their operations on the planet. In a nutshell, for Kenya to develop a competitive, resilient, inclusive and sustainable manufacturing sector, it requires more than short-term interventions.

- The writer is the commercial director, Pwani Oil Products. rajul.malde@pwani.net