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How green industrial policy can resurrect manufacturing sector
While adaptive mitigation is gaining traction, Kenya should focus on sustainability given its comparative and competitive edge on the green sources of energy.
The exuberance of Kenya becoming a newly industrialised middle-income country as Vision 2030 envisages has been gradually diming and seemingly unattainable.
Retrospectively, the inability of the manufacturing sector to sustain sufficient growth momentum has aborted this noble goal. This forfeit notwithstanding, a policy focus on sustainability of internalising the external cost associated with climate change could rekindle the buoyance by embracing the green revolution.
Succinctly, the climate change phenomena is an externality problem caused by industrial pollution, mainly from developed countries.
Like African countries, Kenya bears disproportionately a heavy burden of pollution despite its negligible contribution to climate change.
The existing international framework lacks legal enforcement penetration that would force the developed countries to internalise the external costs they create. Consequently, developing countries are stuck with developed countries-driven adaptive mitigation measures at their additional cost.
Other measures like the carbon credit framework have been introduced, but implementation is skewed against the developing countries.
While adaptive mitigation is gaining traction, Kenya should focus on sustainability given its comparative and competitive edge on the green sources of energy.
It has turned out that Kenya has all the fundamentals to be one of the most cost-competitive green industrial hubs for the world, greening what we all consume, and removing carbon at scale.
Conservatively, it has a supply capacity of astronomical figure 100 gigawatts (GW) lock in the untapped sources like solar, wind, geothermal with calculated potential of 24,170, 19,192 and 83 terawatts hour per year, respectively, Comparatively Kenya produces a mere 3GW not even sufficient to lighting houses let alone supporting the manufacturing sector.
Evidently the Achilles heel of the manufacturing sector is the electricity costs, which is among the highest in sub-Saharan Africa. Granted the vast energy potential unexploited energy sources revitalisation manufacturing sector hold key to the promise land of high quality of life to all citizen in clean and secure environment.
Green industrial growth can lift Kenya to upper middle-income status and beyond. With economic growth driven by climate action, Kenya will be able to address energy poverty, strengthen stability and secure dignified livelihoods and a viable future for all.
Key priorities need to be market access to deliver low-embedded emission products and services, and industrial policy geared towards realising the opportunities for green industrial growth, and measures to increase and optimise global capital allocation to the most viable economic and climate returns, including efforts to reduce cost of capital.
In nutshell, Kenya must pursue an aggressive manufacturing demand-drive strategy to retrace its path of becoming a highly industrialized country by first establishing green industrial hubs.
Moreover, while Kenya might not have adequate reserves for all critical minerals to sufficiently sparks the demand, 90 percent of these from neighboring countries are exported through Mombasa and Lamu ports. Its strategic geographical location within the East Africa region makes attractive for pooling raw material for processing.
