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(i) Low technology in production hence small quantities of goods.
(ii) Stiff competition from more developed and industrialized countries.
(iii) Lack of strategic raw materials necessary for industrial expansion like petroleum.
(iv) Lack of adequate finances to support industrial development and enterprises.
(v) Low domestic market due to low purchasing power of most people owing to poverty.
(vi) Mismanagement and corruption in most industries leading to collapse like Old Kenya Cooperative Creameries(KCC) and The Kenya Meat Commission(KMC).
(vii) Importation of raw materials by many key industries denying local producers' market.
(viii) Location of major industries in urban centres which deny rural areas a chance for development and growth.
(ix) Repatriation of capital to their countries by many multinational corporations denying Kenya revenue.
(x) Unfriendly policies in multinational companies since the key managerial positions are held by foreigners,thus denying host country a chance in managing them.
OR
(a) Shortage of capital.
Many industrial establishments particurlaly in developing countries are faced with the problem of inadequate capital. These countries are therefore forced to acquire loans from both local and international financial institutions. The interest rates on these loans are usually very high and sometimes the loans from international leading institutions come with conditions.
(b) Shortage of raw materials.
Fluctuation of agricultural output affects industries as they are unable to get a constant supply of raw materials. Industries that depend on imported raw materials may experience shortages when strict foreign exchange controls are put in place.
(c) Shortage of skilled labour.
Many industrialists are faced with shortage of skilled labour force particularly at managerial levels. Some industries have closed down because of poor management while others have hired foreign expatriates.
(d) Competition
Locally produced goods have to compete with imported goods. Although import restrictions have been imposed on some products, they still find their way into the country. This creates stiff competition between the locally manufactured products and the imported ones.
(e) High cost of energy.
Kenya lacks deposits of fossil fuels such as petroleum, coal and natural gas. This has been a great hindrance to industrial development because oil used in the industries has to be imported at a very high cost. Since fuel is such a major component of industrial activities, the production costs increase tremendously whenever oil prices rise.
maurice.mutuku answered the question on May 26, 2017 at 06:16
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