Three major policy regimes, namely import substitution, market liberalization and export promotion have greatly influenced Kenyan industrialization since independence in 1963. Overall, import substitution strategy was successful in establishing some primary industries but led to reduced domestic competition and low capacity utilization. Market liberalization policies in 1980 failed as local industries were unable to compete with imports. The export orientation strategy in the 1990s was unsuccessful due to poor implementation of fiscal initiatives and macro-economic mismanagement. Reforms since 2003 have stabilized industrial production but challenges remain in infrastructure, energy and market access. The future of Kenyan industry lies in high-value production.
industrial policy productivity reforms structure of industry