Kenya is sitting on a goldmine worth over KES 670 billion, but we have left the shovel at home. While the country grapples with a widening trade deficit and a shilling that fights for every inch of ground, a staggering amount of export potential is evaporating annually because local industries simply cannot compete with the cost of doing business.

This is the sobering conclusion of the latest Exports Competitiveness Study released this week by the Kenya Association of Manufacturers (KAM) in partnership with GIZ Kenya. The report puts a price tag on our inefficiencies: USD 5.3 billion (approx. KES 684 billion). That is money that could be circulating in the Kenyan economy, creating jobs and stabilizing the currency. Instead, it remains a theoretical figure, lost to high electricity tariffs, logistical nightmares, and policy flip-flops.

The High Cost of Keeping the Lights On

The elephant in the room remains the cost of power. For a Kenyan manufacturer, electricity is not just a utility; it is a survival threat. The report highlights that Kenyan factories are paying significantly more per kilowatt-hour compared to competitors in Egypt and Ethiopia. When a factory in Cairo pays half of what a factory in Industrial Area pays for power, the Kenyan product is dead on arrival in the price-sensitive global market.

"Kenya’s markets exist, demand exists, but we must strengthen our competitiveness to seize our share," noted Miriam Bomett, KAM’s Head of Policy and Regulatory Advocacy. Her warning is clear: we cannot export our way to prosperity with one hand tied behind our back. The study indicates that energy-intensive sectors like steel, paper, and cement are taking the hardest hit, effectively subsidizing the competition by being too expensive to produce locally.

Tangled in Red Tape

Beyond the factory floor, the road to the port is paved with bureaucracy. The report cites "overlapping mandates" and regulatory delays as major bottlenecks. A container meant for export can languish for days waiting for clearance from multiple agencies that do not talk to each other. In the fast-moving world of global trade, time is not just money; it is the difference between a signed contract and a lost client.

• Logistics Lag: Inefficiencies at the Port of Mombasa and the Northern Corridor are adding hidden costs to every container.
• Tax Unpredictability: Frequent changes in tax regimes make it impossible for investors to plan long-term.
• The Asian Wave: Cheap imports from Asia are flooding the local market, undercutting manufacturers who are already struggling with high input costs.

The Sectors We Are Ignoring

The tragedy is that the demand is right next door. The study identifies the East African Community (EAC) and COMESA regions as the "low-hanging fruit" that Kenya is failing to pick. We are missing massive opportunities in sectors that should be our bread and butter:

• Processed Foods & Beverages: Value addition is low; we export raw and import processed.
• Pharmaceuticals: A sector ripe for growth but stifled by regulation.
• Construction Inputs: High demand in a growing region, but local production costs are prohibitive.

Peter Njoroge, Director of External Trade, acknowledged the gaps, stating the government is committed to "digitizing approvals" and upgrading infrastructure. But for the factory owner in Nairobi watching orders go to Tanzania or Egypt, promises of future reforms do not pay today's salaries.

As the global economy tightens, Kenya can no longer afford to treat manufacturing as a cash cow for tax revenues while starving it of the environment it needs to grow. As Bomett aptly put it, "With predictable regulation... we can narrow the export deficit." Until then, that KES 670 billion remains a ghost figure—wealth that could have been ours, but isn't.