Kenya’s economy has shown promise for years with Kenya’s real Gross Domestic Product (GDP) growing by 7.6%, 4.9%,5.7% ,4.7% in in 2021, 2022,2023 and 2024 respectively as per KNBS 2025 survey, averaging to a growth of 5.7% in the post Covid – 19 era with notable growths in agricultural, financial , transport and real estate sectors registering growths of 4.6%, 7.6%, 4.4 % and 5.3% respectively in 2024 .But despite all these rosy text book pictures, the country still faces high unemployment, a stubbornly large informal sector, and rising inequality. One therefore can’t help but ask the burning question, what’s holding us back?
In his book The Quest for Prosperity, Lin argues that many developing countries, Kenya included, have followed the wrong playbook. Instead of building on what we already have like abundant labour and natural resources, we’ve too often chased big industrial dreams that don’t fit our current reality. We’ve tried to leapfrog into capital intensive projects without first laying the foundation. Take for instance such as the Standard Gauge Railway (SGR), costing USD 3.6 billion built to boost manufacturing and trade logistics which has unfortunately not delivered proportional economic returns. Instead of pouring our resources into such we could have first promoted industries like tourism and agriculture
Lin goes ahead to point to examples from around the world where heavy state investments in industries that weren’t aligned with a country’s comparative advantage like steel mills or car manufacturing collapsed once government subsidies dried up in Indonesia and Ghana. These projects looked impressive on paper but didn’t match the local skills, resources, or demand.
Way out?
First, focus on industries where we have a natural edge, Law of Comparative advantage! Agriculture is an obvious one not just raw export, but value-added processing of tea, coffee and other Kenyan products. Tourism is another! Rather than trying to be everything at once, Let’s start from somewhere, starting where we’re strongest and letting growth build from there.
Second, the government still has a vital role to play not by trying to run industries itself, but by supporting promising sectors. That means building roads, improving energy reliability, fixing trade bottlenecks, and helping small businesses access credit through favorable fiscal and monetary policies. These are the basics that allow competitive firms to thrive
The advice is clear, we do not have to copy what the West did decades ago or follow every new development fad. Instead, we should understand our own economic strengths, support industries that fit those strengths, and build gradually. Let’s start with reviving our agricultural sector, Bring back the sugar, coffee and textile industries on foot. Yes! The journey won’t happen overnight. But with the right strategy, and by following a path that plays to our comparative advantage, real economic prosperity will be within reach.
