The effects of import-substitution : the case of Kenya's manufacturing sector

This paper attempts to assess to what extent the growth of the manufacturing sector in Kenya has contributed to a process of integrated and widespread economic development. The first section reviews the general arguments of development theory to promote industrial development in Third World countries. The second section deals with the pros and cons of the 'import-substitution' policy, which was adopted to speed up the 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 multinational firms in Kenya. The conclusion is that the type of industrialisation that has occured has not led to 'a structural transformation' of the Kenyan economy. Import-substitution has not lessened Kenya's external dependency, but has merely changed its nature