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Kenyan manufacturers identify five key areas to rev up sector


Kenyan manufacturers identify five key areas to rev up sector

Kenyan manufacturers identify five key areas to rev up sector
Photo credit: KAM

Manufacturers in Kenya have listed five priority areas to jump start a sector that has experienced a slump in the recent past, growing slower than the GDP since 2014.

At the top of the manufacturer’s agenda is a review of the regulatory policy framework that will support the sector under the devolved system.

Other focus areas unveiled by the Kenya Association of Manufacturers (KAM) include infrastructure expansion, enhancing local content, long-term financing access and SME expansion.

The priority areas, if pushed through, aims to increase the sector’s contribution to the GDP, spur job creation and increase foreign exchange earnings.

The manufacturing sector grew at a dismal rate of 1.9 percent in the last quarter of 2016 against a target of 8.7 percent set by the Vision 2030’s Medium-term Plan II.

“When compared to other rapidly industrialising nations, Kenya’s manufacturing sector growth rate is the lowest. Vietnam has grown at its highest ever rate in the last five years but it still falls short of Ethiopia which grew at 15.8 percent,” notes KAM’s 2017 Agenda report.

The report further says Kenya’s service-driven economic growth could lead to a jobless growth, “which is unsustainable in the long term.”

The Association’s Chief Executive Phyllis Wakiaga says creating and expanding markets locally and internationally remains a crucial factor to grow the country’s manufacturing output.

“We also want to see improved operational excellence within the sector and grow the number of manufacturers in the country,” says Wakiaga.

The turnaround plan comes as exports to the key EAC market declined by 23 percent, a factor that contributed to the dwindling manufacturing sector over the last two years.

The association says the Buy-Kenya, Build-Kenya policy through the preference and reservation regulations will tighten the 40 percent local content requiring the government to buy goods made in Kenya.

Creating Jobs a Priority for Industry in 2017

Manufacturers unveil focus areas toward achieving Industrialization

Kenya Association of Manufacturers have launched this year’s Manufacturing Priority Agenda 2017 under the theme “Driving industrial transformation for job creation and inclusive economic growth”.

The MPA focuses on emerging public policy, a review of the current business environment and relevant regulations, as well as a vision to industrialize for the benefit of Kenya’s economy. The guide details the need for investment in technical skills, creating a nurturing environment for SMEs with a special emphasis on women and youth enterprises, and making Kenya an export hub thereby increasing the competitiveness for local business.

During his keynote address, Principal Secretary, State Department of Industry and Investment Mr. Julius Korir stated that the government is keen on working with private stakeholders to achieve the manufacturing agenda. “The government is working towards ensuring that the manufacturing agenda becomes the only government agenda. I’m glad to see that the recommendations made in this year’s Manufacturing Priority Agenda are aligned with the Kenya Industrial Transformation Programme.”

KAM Chairlady, Ms. Flora Mutahi stated that KAM will continue to work with the Government and other stakeholders towards the development of the industry. “The Government has indeed shown willingness to engage with Industry towards the realization of vision 2030 from our past MPAs. This year we look forward to working even more closely, not just to advocate for better regulations for business, but more so to develop a manufacturing policy that will address issues of inclusive growth and economic stability for our nation. We strongly believe industrialization of our country should be a priority for all citizens, with a view to drive the creation of wealth and productive jobs.”

Additionally, on elections Ms. Mutahi said, “Elections are supposed to be a process and not a deterrent to our current democratic progress. Hence as the business community, we would like to see a show of leadership from both the opposition and current government in guiding a peaceful and transparent transition.”

The priority areas will be driven under five key pillars which, if strengthened, will lead to a more competitive environment and impactful economic gains for Kenya’s industrial sector. These are;

Pillar One: Policy, Legal and Regulatory Reforms

Pillar Two: Level playing field for manufacturing in Kenya

Pillar Three: Competitive Local Manufacturing Sector

Pillar Four: Make Kenya a manufacturing hub for Exports

Pillar Five: Securing the future of Industry

KAM Chief Executive, Ms. Phyllis Wakiaga stated that the MPA has been an instrumental tool in advocating for the growth of the industry over the years. “By clearly articulating our issues on previous MPAs, we have seen the Government stepping in, as our partner, to resolve critical matters such as VAT refunds, interventions on budget proposals (increased taxation on imported steel products) and their support on the ratification of EPAs among other major wins. We are confident that this year we shall achieve a lot under our theme, driving industrial transformation for job creation and inclusive economic growth, as we aim to make sustainable socio-economic impact.”


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