•The sector lobby is keen cut tax burden by 50%, increase county industry competitiveness and full implementation of existing manufacturing-centric policies.
•Wants to increase Kenyan manufactured exports, bridge trade deficit.
Manufacturers want to be included in government to drive the sector's agenda from within.
They have unveiled the Manufacturing Manifesto 2022-2027, which they hope all those aspiring to form the next government will adopt.
Top on the agenda in the manifesto released on Tuesday by the Kenya Association of Manufacturers is the setting up of a Special Delivery Unit (on manufacturing).
“We target to have a special delivery unit within the next government that will ensure the manufacturing agenda is implemented,” KAM chief executive Phyllis Wakiaga said.
To raise investment in the sector, KAM wants the annual inflation adjustment on excise duty reviewed every five years. It also wants the government to put in place a National Taxation Policy to enhance certainty and predictability.
It further wants the country to revert the investment deduction allowance to 100 per cent from 150 per cent to spur county industrial agenda.
The manifesto also seeks to have tax on on raw materials and intermediate goods scrapped and instead the focus be placed on finished goods.
KAM has also called for the removal of 16 per cent VAT on plant and machinery to encourage investment.
“Creating jobs is not an option, it is a prerogative," said KAM chairman Mucai Kunyiha during the launch attended by representatives from various political parties.
Through the manifesto, the association seeks to increase the volumes of 'Made in Kenya' exports to 50 per cent, to bridge the balance of trade that has seen the country remain a net importer.
Currently, only 28 per cent of Kenya's exports are manufactured locally as the country continues to export raw material, which end up being imported as finished products after value addition in destination countries.
“We must increase our value addition capacity and ensure we export more finished goods,”Kunyiha said.
He said Kenya suffers a huge trade deficit which according to Kenya National Bureau of Statistics data widened to Sh1.11 trillion in the 10 months to October 2020, from Sh807.01 billion over the same period the previous year.
The manifesto focuses on macroeconomic environment, rising export intensity of Kenyan manufacturing, increasing investment, county industrial competitiveness, and implementation of sound policies.
According to the Economic Survey 2021, the manufacturing sector growth slowed down from 2.8 per cent in 2019 to 0.2 per cent in 2020 mainly due to the effects of the Covid-19 pandemic on the economy.
KAM is pushing to grow the sectors' contribution to the GDP to the 15 per cent targeted this year in President Uhuru Kenyatta’s Big Four Agenda.
Wage employment in the modern sector went down by 6.4 per cent to 2.7 million persons in 2020.
The informal sector employment is estimated to have contracted to 14.5 million jobs and accounted for 83.4 per cent of the total employment outside of small-scale agriculture.
“Activities in the manufacturing sector slowed down in 2020 mainly due to Covid-19 containment measures,” KNBS says.
The sector’s real Gross Value Added (GVA) is estimated to have contracted by 0.1 per cent in 2020 compared to 2.5 per cent growth in 2019.
The decelerated growth was on account of significant decline in production in key sub-sectors among them processing of coffee (-12.6%); manufacture of beverages (-16.7%); processing of dairy products (-5.7%); manufacture of bakery products (-3.5%); manufacture of grain mill products (-6.4%) and processed and preserved fish (-3.8%).
There was however, notable increase in manufacture of sugar and processing of tea by 36.9 per cent and 22.8 per cent, respectively.
Activities in manufacture of non-food products showed mixed performance. There was an increase in manufacture of chemical and chemical products (9.3%), manufacture of pharmaceuticals (5.6%) and manufacture of basic metals (1.1%).
Manufacture of leather and wood products contracted during the review period.
Credit advanced to enterprises in manufacturing sector increased by 12.0 per cent to Sh409.3 billion in 2020.