Drive to boost uptake of local goods waning
By Rajul Malde
| Dec 13th 2021 | 2 min read
The main goal of the “Buy Kenya, Build Kenya” strategy is to boost the consumption of locally produced goods, stimulating the growth of local industries.
It is also geared towards creating more jobs while generating additional tax revenues for the Exchequer.
More importantly, encouraging Kenyans to buy more local products will ensure the long-term sustainability of the manufacturing sector, crucial to attracting vital investments and innovation into the sector.
However, the initiative, noble and well-thought-out as it is, is yet to gather the expected momentum due to such constraints as high cost of production, low consumer awareness, the proliferation of counterfeit and sub-standard goods, as well as an inefficient public procurement system.
There is, therefore, an urgent need to rethink the entire approach in order to achieve the desired outcomes, especially now that the manufacturing sector is recovering from Covid-19 economic turmoil.
If anything, the pandemic has taught manufacturers to focus more on domestic markets as a way of mitigating risks arising from global supply chain disruption.
First, we must address the high cost of living. One of the biggest concerns for manufacturers is the dwindling disposable household income due to rising prices of essential items like flour, sugar and bread.
A vibrant domestic market is anchored on the strong purchasing power of local consumers. The government should, therefore, consider measures like lowering Value Added Tax on essential consumables or even subsidies to cushion families from inflationary pressures.
The second step is eliminating factors that undermine the competitiveness of Kenyan products.
The cost of doing business in Kenya is significantly higher than in many other African countries, making Kenyan products more expensive. Hence the deluge of cheap imports in the local market.
Reviewing or even doing away with import declaration fees, the Railway Development Levy and other charges that significantly increase the cost of importing raw materials will reduce the cost of production, making our goods more affordable.
Third, the “Buy Kenya, Build Kenya” strategy must be backed by a robust execution framework driven by SMART goals (Specific, Measurable, Achievable, Realistic and Timely) that are constantly reviewed to ensure traction and corrective steps where necessary.
Rajul Malde is the commercial director at Pwani Oil. [email protected]
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