By Sachen Gudka
In less than two months the country’s annual budget will be read outlining the priority areas for the next year. Already, the Parliamentary Budget Office has given its analysis of the budget policy statement, sounding a red alert on diminishing funds for national development. This brings into focus the question; how do we grow and sustain our development budget as a nation? Rather, how do we avoid finding ourselves at nil development budget again next year, and the year after that?
There are many obvious ways to do this, one of which is to increase Government revenue. And the easiest way to increase Government revenue is to; 1) make sure that existing businesses are thriving and expanding, and 2) ensure that citizens are inspired to start and formalize new businesses. If these happen successfully, the country will have a strong private sector that is generating revenue, attracting foreign investments and creating productive jobs – thereby increasing Government’s revenue to supplement the National development budget.
It really is that straight forward. If we give businesses the room to do business, we will experience an immediate economic transformation in this country. Rather than have businesses spend colossal amounts of energy and resources, pushing back against stifling regulations or worrying about which unforeseen unfavourable policies will hit them next; we need to be finding ways to create space, free-up, harmonize and stabilize the business environment.
If we are to truly move small businesses from the peripheries of our economy, to the center stage of our growth strategy we must ensure that this cluster-free unoppressive space is made available to them easily. They must also feel nurtured and driven, to operate, to create and to formalize.
Freeing-up the business environment means that businesses channel their time and money to innovate towards increasing their competitiveness. These kinds of investments, signal a solid confidence in the country, and an assured contribution to the vision for sustained economic growth.
The Manufacturing Priority Agenda 2020 by Kenya Association of Manufacturers outlines the ways in which the country can achieve the above, in the short, medium and long-term. Some of the measures highlighted include for example; the need for the development of a pro-industry policy and institutional framework. Essentially, industry is saying that the design of coherent and cohesive policies is key, between Government departments and, also, between National Government and Counties. This will enhance effective and transparent policy execution. It reduces any instances of ‘surprise policies’ that unfairly disrupt and negatively impact businesses.
The Agenda also emphasizes on the need to maintain a stable macroeconomic environment. One proposed measure is that the National Treasury sustain the ongoing fiscal consolidation measures and ensure that the fiscal deficit is reduced to 3% of GDP in 2022/23 financial year.
Industry has also emphasized on the need to boost SMEs in Manufacturing. For SMEs to thrive, they need enhanced market access for their products and access to affordable finance. This will not only increase their productivity, in turn creating additional jobs but also render them competitive as they expand their markets. We would like to help create a robust market in which businesses that come in as Micros, find structures to support their growth into Small, Medium and finally, large enterprises.
There are also recommendations on how Kenya can enhance market access for local businesses. Our prosperity is not only dependent on productivity but also on the strategic choice of trading partners, export promotion and diversification. Creating avenues for us to reach external markets plays a crucial role in supporting economic growth and industrial development.
We have all the answers as a country, and if we can give industry even half the space it requires to uplift this country economically, the ripple effect will be felt for years to come.
The Writer is the Chairman of Kenya Association of Manufacturers and the Vice Chair, COMESA Business Council. He can be reached on firstname.lastname@example.org.