Kenya manufacturers aim to contribute 20% of country’s GDP by 2030

Kenyan Manufacturers have today unveiled a roadmap to increase the sector’s contribution to the GDP to 20% by 2030. The initiative, Kenya Manufacturing 20by30, seeks to maximize on opportunities available to spur local industry’s growth. 

The summit was held amidst concerns on the declining contribution of the sector to the GDP, which has decreased from 9.3% in 2016 to 7.2% in 2021 (KNBS, 2022). Despite this, manufacturing contributes about 17.30% of total tax revenue, implying that tax revenue from the sector can triple if 20% GDP contribution is achieved by 2030. 

Gracing the event, H.E President William Samoei Ruto observed, “It is possible for us to create a million jobs from the manufacturing sector. Additionally, we have the potential to move the contribution of GDP from 7% to 20% in 8 years. We shall achieve this through continuous engagement, consultation, sharing of ideas and moving together as a nation.”  

He added that “We can build a whole eco-system that will aggregate Kenya’s production since we have put in place initiatives to create an enabling business environment, for instance, policies, and infrastructure. Furthermore, we can leverage natural resources such as clean energy to bring down the cost of power.”  

“There are huge opportunities in value addition. We have the biggest competitive advantage in the tea sector. By processing our tea, we can increase revenues through export. Additionally, we can increase our revenues and the contribution of leather to our GDP from the current 15 billion to 75 billion Kshs annually,” explained His Excellency the President.  

Out of 19 million people under the Kenya workforce, only about 3 million people (15%) are employed in formal jobs in both public and private sectors. The other 16 million (85 per cent) work in both formal and informal micro, small and medium enterprises (MSMEs). 

In line with this, KAM Chairman Rajan Shah reiterated that, “Herein lies the golden opportunity for the country to grow SMEs to the next level. Your commitment towards growing this sector of the economy is indeed timely and promises to unlock the potential for small businesses if implemented in the short and medium term.”  

He added that with the manufacturing sector estimated to increase its contribution to the GDP by 1.6% annually, this will translate to a rise in jobs created by manufacturing from the current 338,000 to nearly 1 million. We shall also increase employee compensation in manufacturing from Ksh 232 billion to Ksh 644 billion and increase real value-added growth from Ksh 876 billion to Ksh 5.2 trillion.  

Mr. Shah highlighted four key areas, which have the potential to enable the realization of Vision 20by30, saying, “These include global competitiveness, whereby locally manufactured goods are able to compete favourably with those produced externally. Second is, export-led growth which calls for increasing the export-intensity of locally manufactured goods. Third, is industrialization of agriculture which shall create the linkage between agriculture and industry. Finally, SME Development as SMEs are the backbone of the country’s economy.”

The event was held during the SME Innovation Awards. The Awards sought to celebrate Manufacturing SMEs who have put in place business innovation and growth strategies, following a 10-month capacity-building programme conducted in partnership with GIZ Promotion of Self-Employment and Entrepreneurship in Kenya.