•Kenya's total exports to china was at 37 per cent in 2020.
•$420 billion (about Sh 51 trillion) is in favor of china.
Manufacturers in Kenya have been urged to increase production for the export markets in bid to narrow down the country's trade deficit.
This is mainly with exports markets such as China, which is the biggest exporter to the East African economic powerhouse.
Kenya Investment Authority(KenInvest) general manager of investment promotion and business development, Pius Rotich, said increased production will help reduce the gap.
The Economic Survey 2022 shows Kenya’s trade deficit widened to Sh1.407 trillion in 2021 as the value of imports greatly outweighed export earnings.
It puts the value of imports at Sh2.151 trillion in 2021 up from Sh1.643 trillion in 2020, a 30.9 per cent growth.
This was mainly driven by a rise in petroleum product imports which accounted for Sh335.3 billion and industrial machinery (Sh255.8 billion), with the total deficit growing from Sh999.9 billion in 2020.
“We will offer strong government support so that we can attract , contribute and facilitate for industrial growth,” Rotich said.
This will also help grow the per capita income of the country.
He called for improved quality of products to gain more market penetration.
This can be possible with the incorporation of technology in the manufacturing processes, he said.
The manufacturing sector's contribution to the Gross Domestic Product (GDP) has been declining, from 9.3 per cent in 2016 to 7.2 per cent in 2021, Economic Survey shows.
Manufacturing was among the former government's Big Four Agenda, alongside food security, universal health, and affordable housing.
With President William Ruto's administration getting started with its leadership, manufacturers in the country are hopeful of what they term a predictable tax regime, to spur growth of industries.
“Our tax regime is characterised by unpredictability, thus hindering the business community from making long-term investment plans,” Kenya Association of Manufacturers had said ahead of the August polls.
To address this, KAM wants the National Tax Policy currently undergoing review by stakeholders implemented.
The National Tax Policy proposes that tax laws be reviewed every five years, a move that is expected to create a predictable environment for existing businesses, while attracting new investments.
This will revise the current cycle where taxes are reviewed every financial year through the Finance Act.
Other areas KAM wants addressed include raising export intensity of Kenyan manufacturing, raising investment in manufacturing and county industrial competitiveness.
The association also wants full implementation of the Buy Kenya Build Kenya strategy, national trade policy and the integrated national export development and promotion strategy.
Others are the automotive policy and the draft public procurement and asset disposal policy.