NAIROBI (Xinhua) --
The World Bank has warned that higher quality
imports are threatening locally manufactured products.
World Bank Group Finance and Private Sector Development
Specialists for East and Southern Africa Maria Mogollon told a
media briefing in Nairobi that leather and apparel imports have
already displaced the local market almost entirely.
"While Kenya has made headway in improving competitiveness of
the manufacturing sectors, there are some bottlenecks that need
to be addressed," Mogollon said during the launch of the
priority manufacturing sector value chain reports.
Mogollo said manufacturing has the potential to be a
cornerstone of the economy in terms of job and wealth creation.
"However, the government and the private sector needs to take
action to ensure its growth and development," he said.
Mogollon said in the furniture industry, imports are
expanding fast and already account for 13 percent of the market
She added that there is currently lack of sufficient push for
the development of the local furniture industry.
Mogollon said Kenya has all the key ingredients required to
develop a competitive furniture industry.
"It has a logistically advantageous geographic position that
provides easy access to regional and international markets," she
The World Bank official stated that East Africa’s largest
economy can promote exports of manufactured goods by increasing
awareness of Kenyan products through well coordinated branding
"It is approximately 30 percent more costly to produce a pair
of low-cost men’s leather shoes in Kenya than in Ethiopia," said
According to the Export Processing Zone (EPZ) Authority,
Kenya’s AGOA exports, employment, and investment in the past
four years (2010-2014) grew by 17 per cent, 12 per cent, and 21
per cent per year respectively, taking up a third of all apparel
exports from Sub- Saharan Africa to the U.S..
World Bank Kenya Country Director Diarietou Gaye said that
Kenya’s apparel exports to the U.S. under the Africa Growth and
Opportunity Act (AGOA) trade regime have grown by 17 per cent in
the past four years.
"Kenya’s textile and apparel sector has the potential to
grow, increase its contribution to GDP, and serve as a source of
gainful employment for its fast growing, young population," said
The furniture industry report finds that Kenya is both the
largest market for furniture and the largest producer of
furniture in East Africa.
Its market is expected to grow at an 8 per cent Compound
Annual Growth Rate (CAGR) between 2013 and 2018, driven by the
growing population, urbanization, and increasing purchasing
Cabinet Secretary in the Ministry of Industrialization and
Enterprise Development Adan Mohamed said Kenya has identified
four priority value chains it will pursue in the manufacturing
"Under Agro-processing value chain, where only 16 per cent of
agricultural exports are processed, we want to double this
amount in order to boost the agriculture sector," Mohamed said.
The value chain report provides is in tandem to the
realization of Kenya’s Industrial Transformation Program and
Kenya’s Vision 2030.
While Kenya has made some headway in the global apparel
market, there is need to focus towards addressing bottlenecks to
competitiveness, says the Apparel and Textile Industry report.
Mohamed disclosed that subsequent to the renewal of the AGOA
agreement for another 10 years, the textil-apparel sector
remains the country’s growth engine for industrial exports.
"We are uniquely positioned to grow and expand this sector
more than ten-fold beyond the current market share of 0.4 per
"We intend to enter new markets and expand our product range
into higher value and niche products," he said.
According to the Kenya Leather Industry report, Kenya is the
third largest livestock holder in Africa, but a number of
factors hinder the growth of its leather industry.
Amongst tanneries, a major difficulty is the lack of quality
effluent facilities, which increase the environmental and health
costs associated with processing finished leather.
In the handbag and travel ware sector, where target markets
are high-end international tourists and exports markets,
challenges include the high cost and low availability of quality
hides, scarce design and process skills, difficulties in
accessing and understanding export markets, and the insufficient
availability of growth capital.
"For the Leather value chain, we are aware that over 90
percent of our 94 million dollars leather exports are unfinished
wet blue leather.
"This state of affairs denies us the opportunity for over
35,000 jobs and up to 250 million dollars in GDP.
"We want to ensure that we fully take advantage of the
largest livestock base of 60 million," Mohamed said.