Fix the challenges of manufacturing sectorFriday March 31 2023
A year ago, the Central Bank of Kenya (CBK) disclosed that a few large borrowers in the manufacturing sector were the cause of a spike in the volume of bad loans in the banking sector.
Now with data showing that the manufacturers recorded the highest jump in band loans in 2022, it is clear that the problems that were hurting the key sector have yet to go away, and may be deepening considering the improved economic performance of other sectors.
Some of the problems facing the sector are unavoidable, such as reduced demand for goods due to inflation, and the increase in the cost of inputs due to high global prices.
But others such as taxes and high power costs can easily be solved to support this sector.
The negative effects of an underperforming manufacturing sector are far-reaching, given its high capacity for job creation and ability to earn the country foreign exchange via exports.
This then calls for a more concerted effort to address the challenges facing the country’s manufacturers, otherwise, we risk stalling the goals and dreams of industrialising the country and creating sustainable jobs for the youth.