Want to benefit from the Big Four agenda? These are the sectors to focus on

NAIROBI, KENYA: Manufacturing has proven to be a hard nut to crack over the last decade. The sector has shown sluggish growth, with data from the Economic Survey 2018 showing it grew by a paltry 0.2 per cent last year.

Bogged down by the high costs of doing business, factories have been shutting down their plants, laying workers off and where possible, shipping operations out of the country. But this bleakness might come to an end, and with it an opportunity for small entrepreneurs to move in.

With the announcement of President Uhuru Kenyatta’s Big Four development agenda, the sector may just get the shot in the arm it needs to thrive.

The Government has committed to raising the share of manufacturing to 15 per cent of the gross domestic product (GDP) by 2022, from the current 10 per cent. One of the ways it plans on attaining this is through supporting value addition.

Most of these investments, however, will not be undertaken by the Government but by the private sector. The Government’s role will be to provide an enabling environment for businesses to carry out their activities.

The pillars

So what, exactly, can you manufacture to benefit from this impending windfall?

You can get an idea by looking at the official numbers given by the Kenya National Bureau of Statistics (KNBS).

The Kenya Industrial Estates (KIE) is one of the Government agencies mandated to promote entrepreneurship by financing and developing small-scale and micro enterprises.

Over the last five years, KIE has approved 1,638 projects, valued at close to Sh500 million. More than a third of the projects approved – 551 – have been for the manufacture of food products.

Kenya is far from being food secure, which is why boosting food security is one of the pillars of the Big Four agenda – with the other three being creating 500,000 jobs, building low-cost houses and rolling out affordable healthcare.

So, looking at data from KNBS between 2013 and 2015, Hustle has put together the average amount in financing you’re most likely to get from KIE in a year, and for which sectors.

At the top of the list of top 10 most attractive sectors is the manufacture of food, with an average of 110 projects a year approved, and receiving Sh53.4 million in financing.

The manufacture of fabricated metal products comes second, receiving loans worth Sh32.6 million for 72 projects per year in the period between 2013 and 2017.

In third place is the manufacture of textiles, with 30 projects receiving Sh11 million each year, followed by printing and the reproduction of recorded media, with 12 projects valued at Sh10.7 million approved annually.

Under the manufacture of wearing apparel, an average of 38 projects worth Sh10.4 million a year get the nod. When it comes to the manufacture of wood and wood products – aside from furniture – 18 projects a year valued at Sh9.2 million get financed.

In seventh place is the manufacture of furniture, with 24 projects worth Sh7 million a year approved, and this is followed by the manufacture of chemicals and chemical products, with two projects, on average, receiving Sh5 million in loans.

In ninth place is the manufacture of non-metallic mineral products – which includes the production of cement, ceramics and glass – with seven projects valued at Sh3.4 million per year getting approved.

Rounding off the top 10 is the manufacture of paper and paper products, with barely one project a year approved, with the average loan size being Sh2 million.