NAMA negotiations: Further de-industrialization of Kenya?

Nairobi, November 2005

Local industries in Kenya suffered severe blows during past episodes of liberalisation. Many domestic industries collapsed following trade liberalisation and economic reforms enforced by the IMF and World Bank under the Structural Adjustment Programs starting from the mid 1980s. Kenya had developed a diverse industrial base after independence, including textiles, pharmaceuticals, processed plastics, vehicle assembly, leather and food processing. The manufacturing sector was growing at a rapid pace (10% per year). This was all reversed through the onslaught of trade liberalization. Local industries, which were still vulnerable, could not compete with the influx of cheaper imports and went down. In the foot steps followed job losses and increased poverty in areas with few alternative livelihoods. In 1988, 78% of the Kenyan population was in formal wage employment and 20% in the informal sector. In 2000 the situation had entirely reversed with only 28% of Kenyans in formal wage employment and 70% in the informal sector