Kenya is to embark on the construction of three industrial megaparks in an effort to attract investors and spur growth in the country’s struggling manufacturing sector.

The East African nation, which has lost its manufacturing competitive edge to Ethiopia, plans to build the megaparks as part of the Kenya Industrial Transformation Programme (KITP), which is aimed at ensuring that manufacturing drives economic growth, in line with the country’s ambition to become an industrialised and middle-income nation by 2030.

Kenya’s manufacturing sector is struggling, owing to the high cost of doing business, a lack of incentives and an influx of cheap imports. This has resulted in the sector’s contribution to gross domestic product (GDP) stagnating at less than 10%, while its growth remains depressed, averaging 4.7% a year over the past five years.

It is hoped that the KITP will boost the manufacturing sector’s contribution to GDP to 15% and result in the creation of one-million jobs over the next 15 years by attracting foreign direct investment.

The Kenya government has signed an agreement with Chinese company Guangdong New South Group for the construction of the first industrial park, the Eldoret Special Economic Zone, in the west of the country, at a cost of $1.9-billion. The park, located close to Eldoret International Airport, will be developed as a partnership between the Chinese company and Africa Economic Zone and will be focused on agroprocessing and value addition, mainly for the export market.

Besides the Eldoret park, Kenya is also investing $164-million in a leather industry park aimed at transforming the underdeveloped leather industry into a key economic contributor. The park will comprise 36 tanneries, 18 leather value-addition facilities and assorted facilities, with its economic impact expected to more than double from $140-million to $367-million within its first three years of operation.

Kenya, which boasts the third-largest livestock herd in Africa after Ethiopia and Tanzania, hopes that the leather park will be a major boost to the country’s leather industry, which is currently on its knees, owing to cheap imports.

The East African nation hopes to emulate Ethiopia, which has managed to build a vibrant leather industry that rakes in more than $500-million a year.

Meanwhile, State-owned power producer Kenya Electricity Generating Company (KenGen) has unveiled plans to build a textiles and apparel industrial park at its geothermal power generation hub in Naivasha, about 120 km from the capital, Nairobi.

KenGen hopes to develop the 453 ha park in partnership with private investors. The park will be connected to the proposed Nairobi–Naivasha standard-gauge railway line and supported with the necessary logistical installations, including a commercial data centre.

“The development of the industrial park will target the optimisation of KenGen’s business operations and also support government’s industrialisation strategy as a pillar for economic growth and development,” says KenGen in a notice inviting potential investors, who will be required to implement the project on a ‘build, own, operate and transfer’ basis.