Despite the pandemic, many emerging economies are steadily recovering thanks to the strength of their manufacturing sectors. In order to ensure that this economic recovery and growth is not accompanied by increased industrial pollution, initiatives and technologies that prevent pollution at their source are critical. But despite clear evidence1 that low-pollution manufacturing can make a significant contribution towards sustainability transitions, realities on the ground continue to present serious challenges.
UNCTAD2 has mapped pollution from some manufacturing industries in sub-Saharan Africa and South Asia, highlighting the importance of focusing on preventing pollution at its source. Likewise, discussions at the 5th United Nations Environment Assembly (UNEA-5), initiated in mid-2021, have evolved from prioritizing remediation measures to directly addressing the sources of pollution. The vision heralded by multilateral agencies to promote cleaner manufacturing across countries is only feasible if national producers have access to the goods and services they need to retrofit their production systems. In other words, any policy action aiming to achieve cleaner manufacturing must take availability of technology and process solutions from either local suppliers or other trade channels into consideration.
The cases of Kenya and Uganda
Kenya’s and Uganda’s economies grew by more than 5 per cent annually (pre-COVID-19 pandemic). Primary activities accounted for a significant part of this growth, with the share of manufacturing value added representing 10 per cent and 20 per cent of gross domestic product (GDP) in Kenya and Uganda, respectively. These figures are likely to increase as the countries’ productive capacities expand and add more value to their production3.
The development potential of Kenya’s and Uganda’s manufacturing sector is enormous, but the sector’s expected future growth—based on business-as-usual—may risk compounding pollution and environmental degradation. Despite the major potential for economic growth, without sound environmental management industrial and manufacturing activities often also have an impact on health through diseases linked to air, water and soil pollution, with far-reaching consequences for society. Stakeholders must prudently manage industrial growth and the associated impacts of pollution to protect social welfare.
While the adoption of pollution control solutions is a multidimensional challenge for countries such as Kenya and Uganda, some priority areas for action can be inferred using network analysis tools to identify linkage vectors between source-pollutant-solutions based on surveys. The network analysis links critical pollution streams from Kenyan and Ugandan manufacturing industries with potential private sector solutions, thereby narrowing the number of solutions to be prioritized in the two countries.
Methodology and results
Insights on solutions that could be implemented against pollution streams in Kenya and Uganda were collected from a literature review and 25 interviews with stakeholders in the two countries4. Pollutants from key manufacturing sectors were mapped and a list of potential solutions to address these and the corresponding solution providers was drawn up. We created a problem space of 12 manufacturing sectors, 39 sub-sectors, 25 pollutant types, and 31 potential private sector-based solutions. The sectors and sub-sectors identified are based on the International Standard Industrial Classification of all Economic Activities (ISIC) & Kenya Association of Manufacturers (KAM) classifications.
Of the 31 potential solutions surveyed, a total of 29 solutions can be provided by domestic suppliers; 18 solutions were found to be available both domestically and abroad and only 6 (including dust collectors/suppressors for plastic packaging waste, cement and construction materials, metal oxide sensors, photoionization detectors and zero liquid discharge wastewater treatment systems) can be provided exclusively by suppliers located outside of Kenya’s and Uganda’s borders. Some important pollution mitigation solutions (e.g. wastewater treatment via dissolved air flotation and via chemicals and metals precipitation) were among those that can only be provided by international suppliers. This highlights the importance of facilitating trade flows in environmental goods and services, especially since some of the solutions that are not available domestically—including various types of dust collectors and zero discharge wastewater treatment systems—have been linked to pollution streams from multiple industries in Kenya and Uganda (see figure below). The size of the pollution nodes relates to the number of connections they have in the network, including both backward connections to sub-sectors and forward connections to private solutions. This is known as degree centrality5.
Some pollution management solutions can tackle multiple types of pollutants, such as biotreatment, membrane technologies, data-producing tools (sensors, analytics packages) and pyrolysis-based processes. Understanding the solutions that act as “horizontal improvers” across various industrial sectors is important to help target public and private investments, as well as development aid, to improve the supply and adoption of pollution mitigation solutions in sectors that can yield the highest gains for the local environment and human health.
The importance of unimpeded trade options
Private operators in the industrial sectors surveyed have the option to choose between either domestically or internationally supplied pollution control solutions. No corresponding local supplier could be identified for certain pollution control solutions, such as for zero-liquid waste discharge treatment systems. Yet such solutions are necessary to deal with the pollution streams from multiple industries, and the lack of domestic availability enhances the case for keeping import channels open and affordable.
Both Kenya and Uganda are members of the East Africa Community (EAC) and base their import tariffs on the EAC’s common external tariff schedule6. Hence, imports from some EAC members do not incur import tariffs – Kenya does not apply import tariffs to imports from Uganda and Tanzania, while Uganda exempts tariffs on imports from Kenya, Tanzania, Burundi and Rwanda7.
Tariffs on pollution mitigation solutions are fairly low, ranging from 0 to 10 per cent in most cases8. However, several other fees and non-tariff measures (NTMs) are found in both countries.
Although the majority of plant and machinery-related imported goods in Kenya are exempt from value added tax (VAT), a small number of pollution control imports incur a VAT of 16 per cent9. In addition, all imports in Kenya incur import declaration fees of 2 per cent and railway development levies of 1.5 per cent10. Similarly, some imports of pollution control equipment and goods in Uganda incur a VAT of 18 per cent, a withholding tax of 15 per cent and a 1.5 per cent infrastructure tax11.
Notable non-tariff measures (NTMs) reported by importers in Kenya12 include burdensome conformity assessment measures applied by the Kenya Bureau of Standards (KEBS), congestion at Kenyan ports and slow rate of import processing by the Kenya Revenue Authority (KRA) and KEBS, and KRA’s online Simba system used by importers to submit import declaration forms frequently breaks down.
Likewise, importers in Uganda reported the following NTMs13, namely difficulties with various conformity assessment requirements, such as Ugandan inspection and certification conditions, and difficulties with entry formalities, such as customs clearance procedures.
Conclusions
The uptake of pollution mitigation technologies in Kenya and Uganda has been limited due to financial, technical and regulatory barriers. Financial barriers such as high initial capital expenditure and lack of access to affordable local financing and supplier terms make it challenging for solution providers to demonstrate a strong business case to attract investment. This limits the expansion of pollution mitigation solutions to new markets and manufacturers’ priorities to invest in these technologies.
Technical barriers such as lack of market-relevant information about the solutions’ market potential and limited technical skills to commercialize and maintain these technologies further limit investors’ and manufacturers’ willingness to adopt such technologies. It also makes it more difficult for public authorities to identify which sectors to promote and/or subsidize. In addition, policy and regulatory environments in these markets are not always conducive to the adoption or financing of such technologies.
Most of the identified solutions—ranging from water treatment solutions, dust collectors and biotreatment of residues—are in early stages of adoption, but are indispensable for the long-term sustainability of Kenya’s and Uganda’s growing manufacturing capacities.
A network analysis has identified some pollution mitigation solutions that can tackle multiple types of pollutants in Kenya and Uganda. Better understanding solutions that act as “horizontal improvers” across various pollutants and industrial sectors is important to be able to prioritize public and private resources and regulatory attention, as well as development aid to those sectors that are likely to yield the highest gains for the local environment and human health.
While uptake is still limited, the majority of private solutions identified for the mapped pollution streams are available domestically in Kenya and Uganda. Six of the pollution control solutions are only available outside these markets, but import tariffs on these technologies are relatively low (0 per cent to 10 per cent, aligned across the EAC market). While tariffs do not seem to constitute a major barrier, several NTMs related to such technologies were reported in both markets, a point which should be addressed to give local manufacturers an import option to retrofit their facilities for more sustainable manufacturing, make them compatible with SDG-12 and to protect human health.
This article is derived from work by Open Capital Advisors (OCA) as part of the Sustainable Manufacturing and Environmental Pollution Programme (SMEP). SMEP is funded by the UK-FCDO and implemented in cooperation with UNCTAD. Views expressed reflect those of the authors only. The authors thank Alexander Burtenshaw, Darshak Bharadva, Brian Lang’at from OCA and Zachary Mikwa, a pollution and sustainability expert, for their contributions to this work.
Disclaimer: The views expressed in this article are those of the authors based on their experience and on prior research and do not necessarily reflect the views of UNIDO (read more).
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