NAIROBI, Sept. 5 (Xinhua) -- Economic analysts on Wednesday urged Kenya to tap the rapid urbanization in order to boost the manufacturing sector.

Kwame Owino, the chief executive officer of the Institute of Economic Affairs (IEA), told Xinhua in Nairobi that the rate of urbanization growth is estimated at an annual rate of 5 percent.

"Urbanization has created a large labor force that can power the country's industrial agenda," Owino said during the launch of the Kenya Urban Areas Performance Index Report.

The first of its kind research aims to assess the performance of Kenya's urban areas. The overall purpose of the assessment is to incentivize good decisions by urban centers.

Owino said urban areas are generally engines of growth due to high population density which promotes efficient use of resources, including electricity.

According to IEA, Kenya is still largely an agro based society with the bulk of the population residing in rural areas.

Owino said labor productivity of small-scale farmers is typically lower as compared to that of workers in urban areas.

"So, the movement of people from rural to urban centers is generally associated with economic growth especially if the people move to work for the manufacturing sector," he said.

The think tank noted that people in rural areas are often lured to urban centers in search for better economic opportunities.

"However, the challenge is for government to be able to provide adequate social services to the growing urban population," Owino added.

He urged the government to develop policies that will ensure that rapid urbanization does not lead to expansion of informal settlements.

Owino said the government should prioritize and scale up investment in the provision of networked infrastructure and services.

He observed that the majority of urban areas do not have public transport policies and legislation.