How SMEs can tap Big Four agenda to spur development

The implementation of the Big Four agenda offers countless opportunities for Small and Medium Enterprises (SMEs). Founded on the premise of manufacturing, universal healthcare, affordable housing and food security, the business community will play a pivotal role for its success. As an ambitious development programme aimed at transforming this country, the multiplier effect will not only be locally diffused but both regionally and internationally due to side-by-side flow of capital and labour resource. Early estimates indicate trillions of shillings will be used in the rollout of the four pillars, an opportunity business players must purposefully seize and at the same time be agents of achieving the intended objective.

Although the government has promised to ensure SMEs benefit from this transformative initiative, the need for proactive involvement cannot be gainsaid to effectively compete with multinationals and other global players. To achieve this, the government must prioritise prompt payments to SME contractors to ensure businesses remain afloat and enable them meet their tax obligations by paying taxes which translates to more revenues by the government.

Majority of them are suffering due to payment delays yet most engage financial institutions to undertake the contracts. And in a commendable move, the government has reduced electricity tariffs for manufacturers. About 2.2 million SMEs have closed shop in the past five years. The Kenya National Bureau of Statistics report titled Micro, Small and Medium Establishments indicates most businesses that shut down blamed this on shortage of operating funds, increased operating expenses, and declining income. The government projection is to expand manufacturing and increase its contribution to Gross Domestic Product from 9 to 15 per cent in the next five years.

For instance, in the agro-processing sub-sector, the Big Four agenda looks to create 1,000 SMEs with a goal of 200,000 new jobs in five years. Similarly, they can also invest in textile and other light manufacturing sectors such as leather, food and beverage processing.

In an exemplary scenario, the government has announced plans to produce 20 million shoes by 2022 to reduce the current import of finished shoes to cushion local entrepreneurs and create more absorption of unemployed youths. Additionally, in support of SMEs, the government has expressed plans to consolidate Kenya Industrial Estates, Development Bank of Kenya, Industrial Development Bank of Kenya, Uwezo Fund and Youth Enterprise Development Fund to ensure traders are adequately supported. From the foregoing, the government has prioritised to operationalise the ‘Buy Kenya Build Kenya strategy,’ where the private sector will compliment government ministries, departments and agencies to dedicate 40 per cent of their allocations for local purchases by opening up the markets.

The same sentiments were echoed by visiting France President Emmanuel Macron who underscored that SMEs are critical component of the economy.

In retrospect, transfer of modern technology and expertise into the country has served as an accelerant of development. The aquaculture sector is another area SMEs can invest in. As noted during the recent meeting between President Kenyatta and SME investors at the Strathmore Business School, the sector has a potential to produce 11 million metric tonnes of fish as opposed to the less than 400,000 tonnes it produces currently if only it gets government support. In housing, SMEs can take advantage of technology and supplement government in constructing affordable houses, which they can then lease or sell for a profit.

- The writer is Nairobi Chapter chairman of the Kenya National Chamber of Commerce and Industry