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Kenya --Industry
Kenya leads East Africa in industrialization. Considerable private-sector activity has contributed to its primacy, as has a comparatively well developed infrastructure that included extensive transport facilities. The expansion of industry proceeded rapidly after independence. The government's official policy had been to encourage import substitution. As a result, Kenya quickly developed a number of industries providing consumer goods like beverages and tobacco, textiles, food products, petroleum products, electrical appliances and machinery, printing, paper products, sugar and confectionery. Industry has grown at a slowed pace since the 1980's when manufacturing has typically contributed only 10% of GDP.

Government policy concerning industry has shifted from import substitution to trade liberalization and export promotion. Tariff groups have declined in number from 25 in 1988 to three in 1997; during this period, the highest tariff rate was reduced from 135% to 25%. However, liberalization of industry has failed in its goal to level the economic playing field for importers and manufacturers. This ambition has been hampered by fraudulent and undervalued imports.

Export-promotion businesses have flourished and replaced the industries that failed during liberalization. Kenya's government has redirected its export-oriented manufacturing strategy by establishing Export Processing Zones and in-bond manufacturing facilities at Nairobi, Mombasa, Kisumu, Eldoret, Nakuru, Nyeri and Thika.

Few useful national data on manufacturing exports exist for Kenya; however, records show an impressive rise in total dollar exports in 1993-96, from $1.2bn to $2.04bn. This rise has been attributed to increased manufacturing exports to regional markets. With a relatively well developed regional manufacturing base, Kenya is well placed to benefit from the East African Cooperation. As an example, Kenya breweries have steadily increased investment in Uganda and Tanzania since 1995.[1]

Industrial Production:

1992 1993 1994 1995 1996a
Sugar (000 tons) 372 385 304 384 389
Cigarettes (m) 7,031 7,266 7,319 7,931 6,393
Beer (m lit) 369 349 303 347 276
Mineral water (m lit) 133 132 131 122 140
Spirits (000 lit) 1,480 2,259 1,674 2,262 2,888
Maize meal (000 tons) 120 168 233 314 267
Wheat flour (000 tons) 222 143 191 237 227
Petroleum prod. (000 m.t) 2,231 2,092 2,058 1,827 1,761
Cement (000 m.t) 1,507 1,416 1,452 1,566 1,816
Industrial output index % 1 245.4 249.9 254.6 263.9 273.6
% change 1.3 1.8 1.9 3.7 3.7

1: 1976=100
a: Provisional

Source: Ministry of Planning and National Development, Economic Survey.
[1] The Economist Intelligence Unit, 1998, Country Profile. Kenya, The Unit: London, pp. 25-26.

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