Kenya must replicate the kind of technological and productivity transformation that turned its flower industry into a global competitor if it is to make the giant leap from its current income levels towards Singapore’s, economist Hiroyuki Hino has said.
- •Hino said Kenya could not reach Singapore’s current income level through incremental economic reforms alone, warning that the country would need a “quantum leap” in its growth trajectory to raise income per person from just over $2,000 to more than $80,000.
- •He pointed to Kenya’s flower industry as an example of the type of transformation needed across the wider economy.
- •Hino, a Japanese national who joined the IMF in 1975 and later served as an economic advisor to both Raila Odinga and William Ruto, also warned that Kenya risks falling into the middle-income trap, in which countries struggle to move from middle-income status into high-income economies.
By adopting new horticultural technologies and taking advantage of faster global transport networks, the flower industry became highly competitive internationally and achieved rapid growth in revenues, Hino said.
“Kenya needs similar transformative changes throughout its economy and society,” he said in a speech at the launch of the Vision 2060 national consultation.
The comparison highlights the scale of the challenge facing Kenya. Singapore’s income per person exceeded US$80,000 last year, against slightly more than US$2,000 in Kenya, making the target more than 30 times the country’s current level.
Hino said reaching Singapore’s present level of development within the next 30 to 40 years would be difficult, particularly on income.
Raising income per person to Singapore’s current level by 2063 would require growth of more than 10 percent every year for 35 years, a pace he described as “a very tall order”. Kenya would first need to strengthen the foundations of growth by tightening fiscal policy, controlling public debt, investing in essential infrastructure and services and continuing to support private enterprise.
But Hino warned that even these measures would not be enough.
Kenya could sustain per-capita income growth of about 5 percent a year under favourable conditions, he said. With population growth of about 1.4 percent, that would translate into GDP growth of roughly 6.5 percent annually.
That would be a strong performance, but still leave Kenya well short of the growth required to reach Singapore’s current income level.
“Kenya needs a quantum jump to a substantially higher growth trajectory,” Hino said.
The flower industry, he argued, shows what such a jump could look like.
Rather than relying solely on higher public spending or conventional investment, Kenya would need productivity-enhancing changes capable of creating entirely new levels of competitiveness.
Hino identified artificial intelligence as one potential source of such transformation, although he said the full impact of the technology on economies and societies remains uncertain.
Education would also need to change to produce a workforce capable of driving faster productivity growth. He called for Kenya’s education system to go beyond cognitive skills and strengthen broader capabilities needed for entrepreneurship, employment and productivity.
