Ethiopia a threat to Kenya producers, says Planning PS
The Kenyan market will be flooded with goods made in Ethiopia because of lack of a clear industrialisation policy, planning Principal secretary Saitoti Torome has warned.
The PS said Kenya must position itself strategically to benefit from a trade deal signed between the two countries. Ethiopia’s growing manufacturing sector is increasingly attracting new investors, while in Kenya high production costs have pushed a number of producers to close shop.
Torome said Ethiopia’s industrialisation policy has helped grow its manufacturing sector. “If not careful our market will be flooded with goods from Ethiopia. Kenya must improve the industrial sector,” Torome said on Wednesday, during the Kenya Economic Report launch in Nairobi.
The 2016 report by the Kenya Institute for Public Policy Research and Analysis indicates that while the manufacturing sector value grew to Sh425.5 billion in 2014-15 compared to Sh417.7 billion in 2013-14, its contributions to Gross Domestic Product and employment are marginally declining.
“Key challenges include high production costs and competition from cheap imports especially from China and India, among other challenges,” the economic report states.
Kenya and Ethiopia are putting up infrastructure including a Sh843 million one-stop border post at Moyale to ease movement of goods and people.
The OSBP on the Ethiopian side is 42 per cent complete and is expected to be fully functioning by March 2017, according to the Ethiopia government, which expects to complete a 500 kilometres road linking Addis Ababa with Kenya at Moyale by September 2018.
On the Kenya side, the 513-kilometre Isiolo-Moyale road is 95 per cent complete, according to transport Principal secretary Irungu Nyakera.
“This is the first time a real connection between Kenya and Ethiopia is being realised for the purpose of trade,” Nyakera said.
Kenya and Ethiopia signed a bilateral agreement in 2011 to develop the joint corridor and road to enhance cross-border trade.