KAM engages Interior CS, Dr Fred Matiang’i on state of the manufacturing sector

KAM engaged Dr Fred Matiang’i, the Cabinet Secretary for Interior and Coordination of National Government and Chairman of the National Development Implementation and Communication Committee, to deliberate on the state of Kenya’s Manufacturing Sector.

The meeting focused on fiscal and non-fiscal policy wins realized in the 2019 Budget, the status of KAM advocacy under the Presidential Round Table (PRT) and emerging key priority support areas by Government to realize the manufacturing sector aspirations as outlined in the Big 4 Agenda.

KAM Chairman, Mr Sachen Gudka noted that some of the challenges facing the sector include illicit trade, unpredictable policy & regulatory environment, low liquidity, low demand, declining exports, low uptake of local content in national projects and competitiveness.

In response, Dr Matiang’i, noted that the Ministry is committed to working with the private sector in resolving the challenges facing them to drive global competitiveness and to grow the economy.

Highlights:

  • The National Treasury and the Kenya Revenue Authority (KRA) have been tasked to develop a legal mechanism to allow refund/offset of outstanding and future credit amounts arising out of the Export Refund Formula. The revised formula was Gazetted on 17th June 2019.
  • KRA has refunded Kshs 5.5B outstanding VAT amounts to the private sector. Ksh. 25B is outstanding from Export Refund Formula and another Ksh. 100 Billion from WHVAT. Due to the gravity of the situation, KRA has committed to meet with KAM in a week’s time to discuss the matter and chart a way forward.
  • With the help of Private Sector, the Government has developed a list of 271 products for exclusively local sourcing. The list is at Cabinet level for fine tuning and approval.
  • Government has also directed that all expiring Power Purchasing Agreements (PPAs) to be renegotiated to promote their effectiveness in driving down the cost of electricity for manufacturers.
  • The Government will host a Regulatory Conference on 14th October 2019 at the KICC to address the regulatory overreach by the regulatory agencies. County Governments will also participate.
  • Additionally, the Government will convene a Public-Private Sector Conference on 24th October 2019 to discuss ways in which the government will promote the private sector for economic growth and prosperity.

Institutions represented in the meeting include The Presidency, the National Treasury, Ministry of Industry, Trade and Cooperatives, Ministry of Foreign Affairs, Presidential Delivery Unit (PDU), and KRA.

We remain committed to driving a competitiveness and sustainability manufacturing sector.

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