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September 26, 2017

Manufacturers target to contribute 15% to countrys GDP

Third Force Alliance Presi- dential aspirant Ekuro Okot, International economic deve- lopment group research fellow Neil Balchin and Kenya Associa- tion of Manu- facturers chief executive offi cer Phyllis Wakiaga during the launch of KAM priority agenda point in Nairobi yester- day. /ENOS TECHE
Third Force Alliance Presi- dential aspirant Ekuro Okot, International economic deve- lopment group research fellow Neil Balchin and Kenya Associa- tion of Manu- facturers chief executive offi cer Phyllis Wakiaga during the launch of KAM priority agenda point in Nairobi yester- day. /ENOS TECHE

The local manufacturing sector will raise its share of the Gross Domestic Product to 15 per cent and create 300,000 jobs by 2022.

This follows the launch of a ten point policy agenda for industrialization by the sector’s lobby, the Kenya Association of Manufacturers.

“The agenda emphasizes the need to spur competitiveness, that should not be visualized in light of aiding industry to be more profitable as this perspective obscures the real long-term benefits of being competitive. Competitiveness ensures that our locally made products can compete both regionally and internationally,” KAM Chairperson Florah Mutahi said during the launch.

The policy will guide incoming governments on achieving the economic goals stated in their manifestos by directing their efforts on the manufacturing sector.

It focuses on doubling jobs, exports and increasing foreign exchange earnings and aims to centralize the economic agenda of Kenya in current and future political narratives.

According to the guide, the performance of the manufacturing sector in Kenya, has been weak and failing to keep with developments as seen in other East Africa countries. Its share of the GDP was the same in 2015 as it was in 1965, and has declined since 2010 to a low of 9.2 per cent in 2016.

Among the policies outlined in the agenda is the need to create a business environment that is conducive to manufacturing investments.

This is despite ease of doing business in the country moving up 21 places from 113 to 91 in 2016 as reported by the 2016 World Bank Ease of Doing Business report.

This policy is expected to deal with challenges such as the ease of getting construction permits, registering property and paying taxes, deal with counterfeits and undercut products and improve higher education training to boost skills in the industry.

In addition, the policy is calling on the incoming governments to secure land for anticipated special economic zones and industrial park development before prices are inflated.

Hass Consult 2017 report on House Price Index, as quoted in the agenda stated that the price of land in Nairobi increased by a factor of 6.1 between 2007 and the first quarter of 2017, while land in satellite towns around Nairobi has risen by a factor of 8.05.

Other policies in the agenda include enforcing a fiscal regime that supports manufacturing, securing affordable, reliable and sustainable energy, expands access to long-term finance for all types of manufacturing firms, creates an export push for manufactured products, and creates a fit-for purpose public service.

In addition, it aims to build trust reciprocity for effective coordination and partnership and develop a coordinated value chain property.

According to the 2017 Economic Survey by the Kenya National Bureau of Statistics, formal employment in the manufacturing sector went up marginally by 1.8 per cent to 300,000 people in 2016, accounting for 11.8 per cent of total formal employment.

Wakiaga said doubling this number will lead to the creation of at least 1.5 million jobs in the informal sector hence increasing creation of jobs in the industry to 1.8 million.

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