Institute for Development Studies, University of Nairobi
Abstract
This paper attempts to assess to what extent growth of the manufacturing
sector in Kenya has contributed to a process of integrated and wide
spread economic development.
There are three sections. The first reviews the general arguments of
development theory to promote industrial development in the Third World
countries.
The second section deals with the pros and cons of the 'import-substitution'
policy, which was adopted to speed up growth of the manufacturing
sector. The last section brings together relevant research
findings concerning the effects of this policy on the structure of the
manufacturing sector, employment creation, income distribution and the
operations of multi-national firms in Kenya.
The conclusion is that the type of industrialization that occurred
has not led to 'a structural transformation' of the Kenyan economy.
Growth in the manufacturing sector, although fast in terms of output,
has been growth within existing types of industries. Few 'forwardand
backward linkages' were developed and the impact of the policy
on employment creation and income distribution can hardly be viewed
favourably. Resources have been concentrated on a small part of the
economy and to a large extent have neglected others, in particular
agriculture. Multinational firms in Kenya have been a hindrance to
the establishment of an integrated, balanced type of economic development.
Import-substitution did not lessen Kenya's external dependency,
but merely changed its nature. Consequently, the policy was not
effective in alleviating the balance of payments difficulties
