The Key to Our Competitive Edge: Sustainable Industrialization

The Significance of Sustainable Industrialisation in Kenya

This year’s Africa Industrialisation Day, observed on November 20, focuses on the themes of Sustainable Industrialisation, Regional Integration, and Innovation. For Kenya, this day presents an opportunity to reflect on how the strategic implementation of sustainable practices can drive sustainable industrial growth. At a critical juncture, sustainable industrialisation is no longer just an aspiration—it is essential for maintaining global competitiveness.

A crucial factor in achieving industrial growth is the development of sustainable energy infrastructure. According to the Energy and Petroleum Statistics Report for the Financial Year ending June 30, 2025, issued by the Energy & Petroleum Regulation Authority (Epra), renewable power accounted for 80.17% of total power generated that year. This breakdown includes:

• Geothermal energy at 39.51%
• Hydropower at 24.21%
• Wind power at 13.18%
• Utility-scale solar installations contributing 3.27%

To further strengthen this, the government has set a goal to generate 100% of electrical energy from renewable sources by 2030. This commitment underscores the importance of clean energy in supporting industrial growth.

Manufacturing plays a significant role in industrialisation, as it is a major consumer of energy and a key driver of economic activity through trade facilitation. As of 2024, Kenya’s manufacturing sector contributes approximately 7.3% to the GDP. However, this figure has declined from 11.3% in 2010, according to the Kenya Association of Manufacturers. A stable, predictable, and innovation-friendly regulatory environment is vital to unlocking the sector’s potential and protecting it from threats such as illicit trade.

Addressing systemic constraints like infrastructure gaps, access to industrial financing, and regulatory streamlining is essential for the country's growing private sector. These challenges must be tackled to ensure that sustainable energy access is achievable and that the manufacturing sector can thrive.

Regional integration, particularly through the African Continental Free Trade Area (AfCTA), raises the stakes for industrial competitiveness. Access to a larger market enables specialisation and allows Kenyan manufacturers to benefit from scale economies, which may not be feasible in smaller or fragmented markets.

Kenya’s diversified economy, supported by its renewable energy resources, is well-positioned to attract firms seeking stable production platforms with continental reach. Manufacturing driven by technology, innovation, and infrastructure requires dependable energy and technical expertise. This integrated approach ensures efficient value addition while building inclusive technical capacity.

In response to these challenges, Kenya is investing in both renewable infrastructure and Science, Technology, Engineering, and Mathematics (STEM) education. One notable initiative is the KOICA-GIZ TVET Project, a collaboration between Kenya’s Ministry of Education, the Korea International Corporation Agency, and GIZ. This project aims to equip Kenyan youth with future-ready skills in areas such as manufacturing and renewable energy, paving the way for an inclusive and sustainable future.

A predictable fiscal and regulatory environment is also crucial for sustainable industrialisation. It enables medium and long-term planning, which is necessary for the growth of industries. Illicit trade remains a significant threat, with illegal tax-evaded cigarettes accounting for approximately 37% of the tobacco market. Counterfeits in the alcohol, cosmetics, and electronics industries are also on the rise, posing existential risks to legitimate businesses.

Tackling these issues requires a whole-of-society approach to protect legitimate industry and the livelihoods of Kenyan supply chains. Moreover, for industrialisation to be fully sustainable, it must be anchored in innovation. Utilising science and modern technology in product design ensures that business solutions remain relevant and responsive to evolving consumer needs. Regulatory frameworks must align with the rapidly changing marketplace and, ideally, stay ahead through proactive engagement with the private sector.

Realising Vision 2030 demands treating industrialisation as a national priority, grounded in renewable energy, skilled talent, and a collective commitment to safeguarding legitimate industry. While services alone cannot generate growth at this magnitude or provide broad-based employment, manufacturing creates formal jobs with competitive wages, develops transferable technical capabilities, and establishes production competencies that compound over time.

As Africa Industrialisation Day highlights the central role of sustainable industrialisation in economic transformation, the synergies between renewable energy, innovation, and regional integration are evident. It is time to accelerate efforts to achieve sustained and sustainable industrialisation and socio-economic development for the prosperity of all.