By Tobias Alando
The economic development of any country is highly dependent on good leadership. This is particularly so because the core values of a nation are directly linked to equality and equal distribution of resources.
Leadership plays a key role in sustainable economic growth as it involves providing opportunities for growth and progressive developments. Therefore, good leadership becomes a visible aspect through, for instance well developed infrastructure and the ability to a country to provide basic amenities especially to the most vulnerable.
According to Michael Schuman in The Miracle – The Epic Story of Asia’s Quest for Wealth, Asia’s phenomenal economic growth is attributed to inspiring leaders who were the backbone of the early stages of each Asian economy.
China, the second largest economy in the world transformed itself from a centrally-planned closed economy in the 1970s to a manufacturing and exporting hub over the years. Deng Xiaoping, the leader of the People’s Republic of China (1978-1989) catalyzed the country’s economic transformation by developing economic reforms that allowed China to revamp its private sector, and attract foreign investors. This transformational move led to a more open and economic focused nation, with an annual GDP growth of 10 per cent. It also lifted almost half of its population out of poverty, shifting them from middle income to a high income status.
The Asian Tigers were the early starters of a mature industrial economy owing largely to the commitment of their leadership to drive this agenda. The growth of the economies was based on the expansion of the manufacturing industry and growth of exports. They had established ports, rapidly developing economies, an educated population and robust infrastructure. They relied heavily on exports of manufactured goods by highly competitive industries, and therefore quick to explore international markets.
How can we leverage good leadership for economic growth?
President Uhuru Kenyatta’s action plan for the next five years highlights the manufacturing sector as a priority sector in transforming the lives of Kenyans through job and wealth creation.
Kenya’s manufacturing sector has stagnated at 10 percent of the country’s GDP for at least 10 years, yet we aim to contribute 15 per cent to the economy with the hope of creating more jobs for our youths.
KAM’s 10 Point Agenda is echoed in the government’s action plan for the manufacturing sector. This agenda was presented to all political parties during the development of their manifestos in order to centralize issue based politics in their campaigns.
The agenda highlights the need to double jobs, double exports, increase foreign exchange earnings and raise manufacturing share of GDP to 15 percent by 2020. It is the kind of intervention needed to call attention to the potential that lies in this sector, which outlines quick, easily attainable actions that can be utilized by Government, Industry and other stakeholders to realize tangible results in inclusive growth and development within the next five years.
Furthermore, it focuses on sectoral priorities such as: creating a massive export push, raising productivity to world class standards, promoting and leveraging ‘Buy Kenya Build Kenya’, tackling uncustomed goods and counterfeits, and developing a stable policy environment. Additionally, it makes proposals on job creation through the revamping of TVET curriculum in the country and offering apprenticeship, and aims to improve livelihoods of all citizens through social housing, value addition in agriculture and value chain creation.
In order to successfully transform the lives of Kenyans, we need dedicated leaders at both national and county level, who are committed to jumpstarting their counties economic renaissance setting aside personal ambitions.
Besides formulation of policies that are favorable to the manufacturing sector, we need selfless leaders who believe in driving industrialization towards achieving equality and equity for our nation.
Kenya’s early years of independence pursued an industrialization strategy that relied on an import substitution strategy in which the government provided both direct support and tariff protection for the industry. ‘The scoping paper on the manufacturing sector’ indicates that the country enjoyed a significantly high rate of industrial growth during the first decade of independence, with an average growth rate of 8 per cent and was second only to agriculture in employment creation. The Economic Survey 2017 suggests that presently, the sector directly employs 300,900 people. With a multiplying effect of 1:4, meaning that manufacturing employs about 1,200,000 million indirectly.
But there are factors that have impeded the growth of the manufacturing sector, one which is corruption. A 2016 survey on Global Economic Crimes indicated that Kenya’s corruption levels rose from 17 percent in 2014 to 61 percent in 2016, which also included procurement fraud at 37 percent.
The enactment of the Bribery Act 2017 was a great step in the willingness to fight corruption, placing obligations on public and private entities to put in place procedures that are appropriate to their size, scale and nature of operations, for prevention of bribery and corruption.
However, the war on corruption needs more than just ‘willingness’ to actualize these kinds of policies. We need to strengthen our institutions, to enable them to investigate corruption claims and empower them to arrest and prosecute perpetrators of such acts. These institutions will need to act swiftly to administer justice and curtail the culture of impunity.
This will lead to increased investor trust at both the local and international level. Transparency and accountability will raise the profile of our country and lead to improved economic growth, expansion of businesses, growth of linkages for our SMEs and consequently increased job creation.
The proclamation of government to prioritize the manufacturing sector in its 5 years plan is the first step towards achieving our vision 2030. However, to turn the proclamation into action, leaders at all levels of government and policy making have to centralize discussions on development around industrialization.
The writer is the Head of Membership at Kenya Association of Manufacturers