KAM launches plan for industry growth

 

Interior CS Fred Matiang'i confers with CEO Kenya Association of Manufacturers (KAM) Phyllis Wakiaga (left) and Sachem Gudka Chairman KAM after during the launching of Manufacturing Priority Agenda (MPA) 2020 in Nairobi. [Jonah Onyango/Standard]

The manufacturing sector needs to double its output to reach its target of contributing 15 per cent of Kenya’s gross domestic product (GDP) in the next two years.

Available data shows the sector’s output stood at 7.8 per cent of GDP in 2018, a drop from 10 per cent in 2014.

Industry executives, however, say the target can be achieved through initiatives to increase competitiveness for manufacturers.

These measures include availability of affordable loans and creation of a level playground for investors. Revamping market access and proper value addition to Kenya’s exports will also turn around the fortunes of the sector.

“United Nations Industrial Development Organisation (UNIDO) ranked Kenya at position 112 out of 150 economies. This is because our manufacturing value add against our exports is very low,” said Kenya Association of Manufacturers (KAM) Chief Executive Phyllis Wakiaga yesterday.

She asked the government to facilitate suitable and affordable finance for the sector, decrying the fact that 99.6 per cent of credit to the private sector came from private lenders.

If the government commits to increasing the pool of available capital, more manufacturing startups will be realised, she added.

“For every one manufacturing job created, there are five resultant jobs formed. This multiplier effect on value chain is massive and means that more Kenyans are able to escape unemployment,” said Ms Wakiaga during the launch of KAM’s Manufacturing Priority Agenda (MPA) for 2020.

Manufacturing is one of the pillars in the Big Four agenda, others being affordable housing, affordable healthcare and food security for all.

While the MPA of 2019 comprised of 70 actions, only nine were fully achieved, with 35 per cent partly done and no progress realised in 26 of them.

Absorb labour

The dominance of service sector, which contributed 42.6 per cent of the economy in 2018, continues to hamper a push for industrialisation as the sector cannot absorb as much labour as manufacturing, the MPA document states.?

Interior and Coordination of National Government Cabinet Secretary Fred Matiang’i urged KMA not to tolerate unethical business behaviour by its members, citing it as the reason small suppliers were struggling.

“The government will not sit and watch as wanton business people cripple small suppliers due to application of unethical practices. We will come in hard on those who fail to honour their obligations to such suppliers,” he said.