EXPORT PROPENSITY AND INTENSITY OF MANUFACTURED EXPORTS IN KENYA
DANIEL OKADO ABALA
SCHOOL OF ECONOMICS, UNIVERSITY OF NAIROBI
A distinctive feature of the manufacturing sector in Kenya is the co-existence of the modern sector alongside a rapidly expanding informal sector. While the formal sector comprises mainly small, medium, and large-scale enterprises (i.e., firms employing more than 100 workers), the informal sector consists of numerous open-air small and micro-scale productive activities in towns and rural trading centres, usually employing less than five workers. Traditional artisan production in the informal sector is dominated by small undertakings employing less than 5 workers. A large proportion of these firms’ output is directed towards satisfying needs of consumer goods and services domestically. These include items such as clothing, furniture, foodstuffs and motor vehicle repairs. While data on this sub-sector is not easy to come by, there is little doubt from casual empiricism that it is one of the fastest growing sectors, and a major source of employment in the country (Ikiara, 1991, Republic of Kenya, 2007). It is equally clear that this sector has little or no impact on Kenyan manufactured exports, due mainly to the low quality of their products.
Some of the industrial products manufactured in Kenya include textiles, foodstuffs, leather and footwear, plastics, pharmaceuticals, steel products, rubber, electric cables, paper, industrial gases, ceramics and batteries, among others. Although the Kenyan economy remains predominantly agricultural, industrialization has been an integral part of the country’s development strategies both in the colonial and post-colonial periods. Industrialization has been a mechanism of diversifying the economy as well as a dynamic engine for sustained and accelerated growth especially in the post-colonial period. Kenya, it might be noted, inherited a relatively well established industrial sector in the East African region.