This archive report was first published on 20 August 2019.
As Kenya prepares to welcome a global textile manufacturing firm to its Export Processing Zone, the government should not overlook the reality that relying on foreign investors to create jobs is a flawed strategy. President Uhuru Kenyatta's efforts to create 500,000 jobs in the cotton industry, for instance, may not materialize unless the State sets up the necessary industries.
Reports that a Sri Lankan firm will invest Sh1.5 billion to become the largest apparel and textile manufacturing company in Kenya demonstrate that lack of funds should not be an insurmountable problem. The Treasury's habit of disbursing huge sums to support ailing State firms and inflated projects suggests that it has the resources to invest in industries with a ready export market.
It would be logical for the Treasury to redirect these funds towards investments that can generate returns, such as special bonds raised from the public and local money markets. The success of infrastructure bonds in the past, which were heavily over-subscribed, provides a precedent for this approach.
The Trade, Industrialisation and Cooperatives Minister may also consider raising funds from the country's co-operative movement, which has the potential to develop the country. Co-operative Bank, which has risen from the ashes of the terrorist bombing of the US Embassy, is a testament to the co-operative movement's capabilities.
Kenya should stop relying on foreign investors to create jobs, as they can leave the country worse off. The government needs to invest in its own industries to achieve Vision 2030 and create sustainable employment opportunities.
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