Ministry of Industrialization Reaffirms Commitment to the Manufacturing Sector

Competitiveness, Research & Development, SME Growth and Local Content Highlighted as Key Areas of Engagement

Kenya Association of Manufacturers and the Ministry of Industrialization and Enterprise Development, today held a meeting to discuss key priority areas for the manufacturing sector for 2016. The discussions were steered by Principal Secretary for Industrialization, Mr. Julius Korir and KAM Secretariat and Board members led by the Vice Chairlady Flora Mutahi and CEO, Phyllis Wakiaga.

The meeting sort to address outstanding issues faced by different sectors within manufacturing that stifle their growth and capacity to contribute more towards the GDP. KAM Sector representatives highlighted a number of areas of concern which include; the need to effect the Buy Kenya Build Kenya Policy, Preferences on Local Procurement, improved competitiveness and reduction of the cost of doing business. The latter results from taxation such as the IDF fees, Railway Development Levy (RDL), Excise Bill, VAT refunds. The Sector Chair-representatives also highlighted the cost of energy and labour, delays in receiving payment from Government resulting in cash flow issues and the duplication of regulatory bodies that all add to the cost of doing business.

Delivering his address, Mr. Korir said that the Ministry is keen on working with Industry to resolve these issues and called for amicable engagements that will provide for mutually beneficial solutions. “The Ministry is the industry arm in government mandated to grow this sector and will be keen on doing that through enhancing the ease of doing business.The Government is also committed to the growth of local manufacturing and is keen to drive an enforcement criteria for local preferences. Every Government Project contract has a local content clause that indicates 40% of inputs for the project should be sourced locally.”

The Ministry committed to work with KAM to develop a manufacturing policy that will increase manufacturing contribution to the GDP to above 15% within the next 5 years, create 1 million jobs. This will in turn guarantee markets for the local industry through Buy Kenya Build Kenya Policy. Support towards SMEs was noted as key and Mr. Korir pointed out that the Ministry is working towards strengthening a subcontracting arrangement.

However, Mr. Korir emphasized that local content should not only be limited to government procurement from these sectors, but should exploit ways in which the sectors can procure from each other.

KAM CEO Phyllis Wakiaga echoed these sentiments and added that, “The Manufacturing Sector in Kenya has the potential of great growth and can play a particularly important role in putting Kenya on a sustainable growth path, only if it is adequately supported. If this happens, our impact as an industry will not only be felt in the immediate term, but will have a lasting effect on the future of our economy.”

KAM Vice Chairlady Ms. Flora Mutahi called for the need to have in place policies that make the Country a better place to invest, a better place to innovate and a better place from which to export. “As KAM, we are looking at innovative ways to strengthen our sectors in order to create jobs for our citizens,” she said.

KAM and the Ministry will further work towards having a gazetted task force to drive Research and Development and work towards transforming KIRDI to be a Centre of Excellence.