Converting crisis to boom for Kenyan foundries and metal engineering industries: technical possibilities versus political and bureaucratic obstacles

Abstract

The present foreign exchange crisis in Kenya could occasion a boom in our foundries and metal engineering workshops if the government adopts policies to vigorously encourage - instead of hampering - these key industries. Their plant and equipment, skilled workers, and supervisors are massively underuti1izea principally due to a lack of planned development for these industries. But now given that existing capacity, a boom in the foundries and metal engineering industries could be created by: drastically limiting the number of models of cars, trucks and various products, eliminating imports of domestically producible items, selectively improving the capacities and quality controls in these industries, lowering the inflated prices that wholesalers charge for specialty steels, reducing the over-reliance upon and cost of licensing agreements, restricting patent protection, and discriminatorily favouring the allocation of foreign exchange to foundries and the engineering industries. Also the government's huge railway workshops should be put to work to make components for many products (i.e. pumps). The implementation of these policies would create thousands of jobs through backward and forward linkages (e.g. for plastic components; assembly of the products, and from usage in agriculture) and would decrease import dependence. But the adoption of these policies to increase domestic production in these industries would encounter strong opposition from importers and multi-national assemblers of imported components.

These conclusions were drawn from visits to 91 metal engineering workshops and 19 foundries in Nairobi, Kisumu, Thika, Magadi, Mombasa and elsewhere.