State to set up manufacturing hubs in counties -Kuria

The devolved units have been asked to leverage their natural resources to foster healthy competition among themselves

In Summary
  • Real value added in the manufacturing sector grew by 6.9 per cent in 2021.
  • The share of the manufacturing sector to the country’s GDP was 7.2 per cent in 2021.
Trade, Investment and Industry CS Moses Kuria takes oath of office at State House, Nairobi on October 27, 2022
Trade, Investment and Industry CS Moses Kuria takes oath of office at State House, Nairobi on October 27, 2022

The government plans set to establish manufacturing and export hubs in counties as a way of increasing the sector's contribution to the national economy. 

Speaking last evening at the launch of Changamka Shopping Festival, Trade and Industrialisation Cabinet Secretary Moses Kuria said the sector has the potential to contribute 20 per cent to the national Gross Domestic Product (GDP) and create jobs 

The industry’s contribution to the GDP has been declining, from 9.3 per cent in 2016 to 7.2 per cent in 2021, despite the previous administration listing it as one of the Big Four Agenda alongside food security, universal health and affordable housing.

"The country needs to fix the value chain since the textile sector has the potential to rival other countries such as Bangladesh in manufacturing and even become better," Kuria said. 

He called on counties to leverage their natural resources to foster competition on attraction ad retention of local and global investors.

''Manufacturing growth will not be achieved by solely relying on domestic markets. We must shift our focus and understand that with increased globalisation, it is critical that our products and services are competitive in the global marketplace,'' Kuria said. 

The idea of devolving manufacturing was first conceptualised by the Kenya Association of Manufacturers (KAM) in 2018 and identified 10 priority areas.

They include: creating a competitive environment and level playing field for local manufacturers, promoting exports, and developing policies and institutional frameworks to nurture industrial growth.

It also includes paying a special focus on SMEs and skills development.

Although the previous administration did not meet its target to raise the sector's contribution to GDP to 15 per cent last financial year, it recorded a slight growth. 

The growth was mainly due to increased production of other non-metallic mineral products like cement, Leather and related products and dairy products sub-sectors.

However, in the review period, a decline in production was recorded in prepared and preserved fruits and vegetables, animal and vegetable fats and oils, furniture and pharmaceutical products sub-sectors.

The formal employment in the sector increased by 6.7 per cent to 338,000 in 2021 from 316,900 in 2020.

Overall annual inflation as measured by the producer price index rose by 7.32 per cent to 109.55 in 2021.

The National Treasury has allocated about Sh 135 billion to the manufacturing sector in the current financial year, targetting mostly satellite industries in the textile, leather, agro-processing, and construction sub-sectors.

The annual Changamka Shopping Festival, a week-long expo which ends on November 5 seeks to showcase high-quality locally manufactured products, in a bid to celebrate the sector's ingenuity and promote the Buy Kenya Build Kenya initiative.

Manufacturers will not only have the opportunity to market their products but also create links among themselves for the benefit of their businesses.

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