Kibaki asks firms to raise investments in EAC
President Kibaki is asking local manufacturers to focus on the regional market to speed up growth as economic crisis squeezes demand in traditional European markets.
The presence of Kenya’s firms in East African Community (EAC) is encouraging, the President said and urged the business community to cash in on the 120 million population, which offers potential for growth.
“I urge more of you to follow the examples set by these companies and invest in the region,” the President said on Friday at a Kenya Association of Manufacturers (KAM) luncheon to celebrate 10 years of his leadership.
Mr Kibaki, who is the current chairman of EAC’s Heads of States Summit said: “The benefits of increased trade and regional investment to businesses as well as our people will be immense. I can assure you that the future is in regional trade.”
Kenya’s value of exports is trailing imports by large margin, a wide balance of trade that weakened shilling to its lowest level of Sh107 in October last year.
Government statistics indicate that Kenya exported goods worth Sh511 billion last year against an import bill of Sh1.3 trillion.
Kenya Airways, Diamond Trust Bank, KenolKobil, Jubilee Insurance, Equity Bank, Pembe Millers and KCB are among the Kenyan firms with branches in the region.
Last week, executives of local firms which have gone regional said the expanded regional market helped them to survive difficult economic conditions.
“We are preparing to open two branches in Uganda and more in other EAC countries because we do recognise that our quick recovery has partly been helped by regional expansion,” Jonathan Ciano, CEO of Uchumi Supermarkets, said.
Apart from the 2000 workers on its payroll in Kenya, Mr Ciano said Uchumi now employs about 600 Ugandans and 200 Tanzanians in the branches in the two countries.
The manufacturing sector has lately experienced slow growth due to high cost of production and squeezed weakened demand in traditional markets in the West.
The first quarter data prepared by Kenya National Bureau of Statistics show that the sector grew by a paltry 3.8 per cent in the first quarter of 2012 against a target of at least 10 per cent.
However, manufacturers have made inroads into the region recording a strong expansion of 14.4 per cent in the same period.
“We will continue to advocate for a conducive environment for doing business and push for industrial agenda of the manufacturing industry,” KAM’s newly elected chairman Polycarp Igathe said.