Counties to lead Kenya’s Manufacturing Agenda

By Phyllis Wakiaga

In order for Kenya to reap from devolution, we must begin to look at counties as the engines to drive our economic growth. They have to be our first stop in the quest to building strong governance structures that will effectively provide efficient social services towards poverty alleviation. Additionally, we should make them our nucleus when enhancing economic frameworks to elevate the quality of life for every citizen.

Last year’s general elections were a clear indication that the functions of the devolved units in driving this country forward have become more pronounced. It is also evident that political tensions in our country will continue to be made worse by socio-economic inequalities, if county leadership does not take the mantle in creating equity and consequently equality. As such, there is no better time to harness the potential of the manufacturing sector in creating shared economic values and sustainable economic solutions, such as this.

The role of manufacturing in creating productive and sustainable jobs, through creation of industries, expansion of existing businesses, boosting the retail sector, enhancing the services sectors, building value chains and so forth, is evident in stronger economies throughout history. Essentially, we should make manufacturing our priority development pillar upon which all other economic goals are anchored. For this to occur, the industrialization agenda must be spearheaded by the county governments, which will then ensure that it subsequently takes root as a national agenda towards the achievement of Vision 2030.

Presently, many of the counties have not given as much credence to the industrialization agenda in their development plans. As it turns out, many have not yet conceptualized or mapped out what their development priorities are or clearly articulated the same in their sectoral plans. As a matter of fact, the annual allocated budgets for development, in general, are hardly utilized in many of the county governments. The Public Finance Management Act requires County Governments to set aside a minimum of 30% of their allocated budgets towards development. However, the Budget Policy Statement 2018 reviews the development expenditure for the past five years and notes that, for a substantive number of counties, actual development expenditure barely hits the minimum mark, except for the year 2016/17 in which the minimum allocation was only very slightly surpassed.

I have always emphasized that manufacturing is everyone’s business and thus has, unsurprisingly, been highlighted in the Big Four Agenda by the Government for the next five years. Needless to say that as individual counties, we now need to review our development agendas and expenditures with this in mind. Especially, paying attention to the areas that require investment, and will in turn attract investors who will build and expand their industries across the country. The process of figuring out the areas to focus on, need not be a ‘burden’ for county leaders, as this would be the ideal time to engage existing partners and stakeholders, to identify low-hanging fruits which promise tangible results in the short and medium term.

Last year as industry, for instance, we identified 10 priority areas of focus for the sector in our 10-point priority agenda which we shared with prospective leaders at both County and National levels. These key action points were guaranteed to increase jobs, promote exports, enhance sector productivity and attract more investments into the country. During the Gubernatorial debates, each participating county curved out what was key for them among these priority areas and hashed out the ways in which to achieve them with their leadership. This year, KAM on behalf of industry, has succinctly consolidated the 10 priority areas into five pillars in the Manufacturing Priority Agenda for 2018. These are namely, creating a competitive environment and level playing-field for local manufacturers, promoting exports, developing policies and institutional frameworks to nurture industrial growth, a special focus on SMEs and skills development. The agenda will act as a guide to help us take stock of our progress in terms of actualizing the industrialization vision by the end of the year, setting the tone for the next year.

With the support of Industry, county governments can drive industrial growth in their own areas whilst providing jobs to the youth and create a conducive environment for innovative ideas to garner more investments. They can develop policies that create a conducive environment for investors to do business productively. The main impediment for growth and expansion of investments in counties has been the multiple fees and levies charged on businesses that transact across counties. We need a harmonized approach on taxation but also, more importantly, develop tax policies that incentivize business growth.

Counties also need to leverage their natural resources to foster healthy competition among themselves as to who can attract and retain more investment, both local and global. Each county has something unique to offer, it all depends on their ability to position themselves as ‘open for business’. The most perceivable natural resource is land. Can counties begin to set aside land specifically for industrial use – for example – for special economic zones, industrial parks, or even incubation hubs?

Counties are no longer the ‘future’ of this country, they are the present solution to our economic frailties. The concept of devolution to distribute wealth and resources to each and every citizen, whilst imparting a sense of belonging and ownership, can materialize if we build a strong manufacturing base in every county.