The Kenya Association of Manufacturers (KAM) launched the Manufacturing Priority Agenda (MPA) 2024, themed “Steering economic growth through the manufacturing sector for the common good.”
The four-point manufacturing agenda, which includes global competitiveness, export-led industrialization, SME development, and agriculture for industry, provides a roadmap to increase the manufacturing sector’s contribution from 7.8% of the gross domestic product (GDP) to 20% by 2030.
The MPA recognises that Kenya’s manufacturing sector faces hurdles driving economic growth due to excessive regulations hindering efficiency and development and high energy costs that make the industry less competitive.
Others include inconsistent tax policies and changes in industrial input taxes, creating uncertainty and counterfeit goods that undermine legitimate manufacturers.
The MPA Report offers a strategic blueprint to overcome challenges, capitalise on opportunities, and propel Kenya’s manufacturing industry onto the global stage.
“Kenya’s manufacturing sector contributed 7.8% to the GDP in 2022, representing a value of Ksh. 3.18 trillion and generating 352,000 direct jobs, so bolstering its competitiveness is necessary,” KAM said in a statement.
KAM Head of Policy, Research, and Advocacy, Job Wanjohi, emphasised the significance of advancing policies to reset manufacturing and achieve the Agenda by 2030.
One strategy the MPA has identified is to leverage regional and international export opportunities.
Two, provide solutions for market access, financing, and governance frameworks to support the sustainable growth of SMEs in manufacturing.
Some of the policy recommendations they have proposed are to streamline regulations and reduce overlaps between government agencies.
The MPA states, “Strategic realignment and harmonisation (between the national and county governments) will reduce bureaucratic hurdles and foster a more efficient government structure.”
The lobby group also emphasised that lowering electricity costs for manufacturers will increase their competitiveness, noting that the unit electricity cost per kWh charged to manufacturing enterprises has been rapidly growing.
“Unit electricity cost per kWh charged to a cement manufacturer (one of the heavy electricity-consuming processes) in Kenya increased from Ksh 15.8 in January 2021 to Ksh 25.1 in January 2024, representing a 58.9% increase (Figure 4.3). This significantly undermines the competitiveness of manufacturers in Kenya.”
They also proposed a 5-year tax break for SMEs to improve cash flow and sustainability, implement legislation, and increase funding to support SMEs.
How AfCFTA Can Boost Youth and Women’s Empowerment in Africa
