State teams up with manufacturers to create jobs, increase exports

Manufacturers have agreed with the government on a 10-point agenda aimed at accelerating job creation and expanding the export base.

Industrialisation secretary Adan Mohamed said the government would create a bigger ready market for local factories through the Buy-Kenyan-Build Kenya campaign.

“Government is working on incentives for companies that promote the participation of small to medium enterprises, which will be modelled along the Black Economic Empowerment in South Africa,” Mr Mohamed said.

The Kenya Association of Manufacturers (KAM) said the government should help deepen ties with other countries, ensuring market access by Kenyan traders to markets in Africa, Europe and beyond.

“By doubling Kenya’s share of Africa’s trade, Kenya could double its employment overnight and significantly contribute to meeting the government’s goal to create one million jobs in three years”, KAM chairman Polycarp Igathe said during a stakeholders meeting in Nairobi on Monday.

The manufacturers urged the government to expedite payment of nearly Sh30 billion in VAT refunds to boost their cash flows. The manufacturing sector accounts for 14 per cent of Kenya’s GDP.

During the meeting it was agreed that industrialists be offered training to enable them competitively engage in international tenders. Workers will also be paid according to their productivity.

The government has in the past attempted to introduce performance contracts in public offices to hold staff accountable for their work.

The government also pledged to reduce the cost of doing business at a time when manufacturers are facing higher overhead costs partly as a result of higher electricity tariffs caused by the new Value Added Tax (VAT) Act.

The law came into force last week raising the tax on power from zero and 12 per cent to 16 per cent for small (less than 200 units) and big consumers, respectively.

Small and medium enterprise (SME) manufacturers would be enrolled in mentorship programmes with State support.

To drive the agenda, the Industrialisation Ministry will have progress meeting with the manufacturers once a month.