Manufacturers stock up to deal with any election hurdles

There has been a high import of raw material and finished goods.

In Summary

•Kenya Association of Manufacturers (KAM) says the move is as a result of uncertainty that comes with elections, where industries have previously been affected.

•Stocking up will ensure smooth flow of r operations, KAM says.

An aerial view of the Industrial Area in Nairobi /FILE
An aerial view of the Industrial Area in Nairobi /FILE

Manufacturers in Kenya are stocking up especially on raw material imports, sector lobby says, as the country goes into the general elections.

The Kenya Association of Manufacturers (KAM) said the move is as a result of uncertainty that comes with elections, where industries have previously been affected.

“Historically, there has been a slowdown in business in an election year, and this year is no different,” KAM acting CEO Tobias Alando told the Star yesterday.

He said the sector is keen to ensure smooth flow of their operations during and after the polls, even as advocates for a peaceful process and smooth transition between the current and the new government.

This will play a critical role in the growth of the sector particularly in the county governments, guaranteeing a strong economic foundation, productive jobs and purchasing power for citizens, KAM says.

Manufacturing is among the key contributors to the economy which last year grew by 7.5 per cent, from a contraction of 0.3 per cent the previous year–Economic Survey 2022.

There has been a hesitation or a wait-and-see approach adopted by both local and foreign investors ahead of the elections, KAM says, mainly on expansion and new projects.

“This impacts adversely to job and wealth creation and ultimately, the performance of the sector,” Alando said.

The stocking up has driven up the number of ships calling at the Port of Mombasa, with 49 vessels expected in the next two weeks.

They include 16 container ships, 19 conventional vessels and eight oil tankers, which expected between yesterday and next weekend.

Main cargoes are steel products, motor vehicle, fertiliser, wheat, rice, sugar and fuel products.

“Traditionally, manufacturers have kept stocks to ensure smooth flow of their operations,” Alando said.

Kenya Ports Authority (KPA) data shows the Port of Mombasa recorded most ship port calls in 2022 with a total of 262 ships for the half-year ending June 2022, compared to 259 ships in the corresponding period in 2021.

The high number of vessels is also attributed to re-opening of the economy after a slowdown caused by the Covid-19 pandemic.

Shipping lines have also resumed operations after disruptions from the Russia-Ukraine conflict.

A major importing and exporting sector, activities in the manufacturing sector were more vibrant in 2021 compared to 2020, Kenya National Bureau of Statistics (KNBS) says.

During the year, the sector recorded an accelerated growth of 6.9 per cent compared to 0.4 per cent contraction in 2020.

The food sub- sector expanded by 5.5 per cent while the non-food sector grew by 8.8 per cent, respectively in the review period.

In the manufacture of food products, activities that posted notable increase included processing of sugar (16.0%); meat and meat products (13.1%); dairy products (10.8%); and bakery products (9.3%).

However, manufacture of preserved fruits and vegetables,and that of animal and vegetable fats and oils declined during the review period.

Some of the non-food activities that posted significant increases include manufacture of other non-metallic mineral products (23.2%); manufacture of leather and related products (15.6%) and manufacture of motor vehicle, trailers and semi-trailers (18.9%).

“Most of the activities of manufacture of non-food products registered growths in 2021,” KNBS says in its latest economic survey.

Credit advanced to enterprises in the manufacturing sector increased from Sh409.3 billion in 2020 to Sh463 billion.

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