The International Monetary Fund (IMF), in its recent regional economic outlook, raised concerns about Kenya’s private sector and its ability to drive job creation, particularly among the youth.
It stressed that without major reforms, Kenya could face persistent unemployment. Strengthening the private sector is crucial to unlocking economic growth and creating job opportunities.
The frustration among Kenya’s youth has been evident, especially following the recent Gen-Z -led protests. Many young people have expressed their disillusionment with the government’s inability to generate adequate job opportunities.
A major concern highlighted by the youth is the unpredictable taxation system, which discourages investors from entering the Kenyan market. Without addressing these concerns, Kenya risks worsening its unemployment crisis.
Roll out of industrial zones concept by the Kenya Kwanza administration promises to partly address the employment issue.
These industrial parks, if successfully executed, could play a key role in revitalising Kenya’s economy by stimulating growth, creating jobs, and attracting both local and foreign investments.Industrial parks and Special Economic Zones (SEZs) have proven successful in various countries, promoting manufacturing, services, and innovation.
However, the rollout of industrial parks and SEZs has faced challenges.
Kenya’s push to establish industrial parks aligns with the goals of the Forum on China-Africa Cooperation (FOCAC), which focuses on industrialisation and development across Africa.
Attracting Chinese investment in value-added production could provide significant economic growth, create jobs, and open new markets for local products.
China has committed to providing 60,000 training opportunities for youth and women, which is part of its broader commitment to African development. These initiatives and technology transfers could help Kenyan entrepreneurs enhance their skills and improve their competitiveness in the global market.
At the 9th FOCAC summit in September 2023, Chinese President Xi Jinping reaffirmed China’s commitment to supporting Africa’s growth through financial assistance, expertise, and infrastructure projects.
Kenya could greatly benefit from this collaboration, particularly in rolling out industrial parks that would attract investments and foster job creation.
Despite challenges such as budget cuts and logistical hurdles, FOCAC remains a promising avenue for Kenya to boost industrialization.
For Kenya’s industrial parks and SEZs to succeed, private investment is essential. The Kenyan government must prioritise creating a favourable environment for foreign investment, ensuring these projects are not politicised, especially with the upcoming 2027 elections.
Industrial parks should not become political tools but should focus on economic growth. Private investors have shown a strong willingness to invest in large-scale industrial projects across Africa.
Examples such as the Sino-Uganda Mbale Industrial Park and Ethiopia’s Hawassa Industrial Park show the potential of Chinese investment in Africa.
Kenya must also focus on developing a strong policy framework that supports investment in these parks. While tax holidays can attract foreign investment, they may not be sustainable in the long term. A more effective approach would be a fiscal policy that fosters business growth while maintaining fiscal discipline.
China’s experience in developing industrial parks offers valuable lessons for Kenya. These zones have boosted local manufacturing capacities, created jobs, and encouraged technology transfers in countries like China and other parts of Africa.
Kenya could benefit from Chinese expertise in areas such as agricultural product processing, infrastructure development, and improving trade logistics.
A 2021 study by the Institute of Development Studies noted that Chinese-sponsored Economic and Trade Cooperation Zones offer African countries new sources of investment, job creation, and skills transfer.
The study also emphasised the importance of improving trade facilitation—such as customs, tax policies, and inspection facilities—especially as the African Continental Free Trade Area (AfCFTA) becomes operational. China’s investment and expertise could significantly benefit Kenya in this regard.
The study also recommended that industrial parks integrate social infrastructure, such as housing, healthcare, and education, into their planning.
This would ensure sustainable communities, stronger value chains, and better relationships between industrial parks and local populations. By doing so, Kenya could create jobs and improve the living standards of surrounding communities.
Through initiatives like FOCAC and the Belt and Road Initiative (BRI), China has been a major contributor to Africa’s economic transformation.
China’s willingness to invest in large-scale infrastructure and industrial projects underscores its commitment to unlocking Africa’s economic potential.
The writer is a journalist and communication consultant
