How SMES will enjoy a Sh3bn slice of affordable housing project

The government has announced that it has set aside a Sh3 billion procurement order for the informal sector to produce 100,000 doors and 120,000 windows as local content providers for the affordable housing programme.

A multi-agency committee on integration of MSMEs (micro, small and medium enterprises) in the affordable housing programme led by the National Construction Authority will also provide 30 percent advance payment to successful bidders from the Jua Kali sector in capital facilitation to enable them start on the orders.

The government had initially said it was ring-fencing 69 items out of those being used in the construction of the housing estates for SMES, but said on November 26 that it had for now secured the building of doors and windows for the Jua Kali industry.

It was not clear from the government pronouncement whether it would at a later stage include the other 67 items on the list as mandatory components to be supplied by SMEs. Other items are supplied by the foreign investors and contractors implementing the projects.

Housing Principal Secretary, Charles Hinga, urged artisans gathered in Nairobi from across the country to work within their associations to access opportunities as suppliers for doors and windows for the projects in Nairobi’s upcoming Starehe and Shauri Moyo estates. The project is part of the government’s plan to inject stimulus to the economy.

The PS was speaking during the opening of a sensitisation drive for SMEs and Jua Kali enterprises in Nairobi on November 26 during which the government launched the Jua Kali Production Manual containing specifications, measurements and standards for the production of the 69 items. The Jua Kali industry will have to abide by this manual when supplying the items.

“We know you know how to make doors and windows. We are just giving you a manual specifying the standards required and access to the market to enable you contribute in building our country and to also create employment,” he said.

“We have ring-fenced 69 items which must be supplied by our Jua Kali sector. To enable funding, a multi-agency committee led by the National Construction Authority (NCA) will provide the players with 30 percent advance payment upon the successful bidding process.”

He however warned, “We’ll expect very high standards when you produce these items. So don’t think you’ll do some sub-standard doors and we’re compelled to take them just because it is a government project.”

The government plans to construct 500,000 units of houses which are planned for completion by 2022 under the affordable housing scheme that seeks to plug the gap in provision of decent homes in the country.

The Jua Kali sector is a big contributor to employment in Kenya, creating 17.8 million jobs in 2018, according to the 2019 Economic Survey by the Kenya National Bureau of Statistics. The informal jobs constituted 83.6 percent of total employment.

It is hoped that by clinching the doors and windows contract, the SMEs will contribute in the realisation of affordable housing, a pillar of the government’s Big 4 Agenda, while creating employment.

Industrialisation PS, Dr Francis Owino told Enterprise that the government would inject more resources into upskilling artisans for them to have the requisite capacity in making the items required by the housing project.

“The informal sector has the greatest potential to enable the realisation of the Big 4 Agenda and economic growth as they are critical players in production of construction sector materials and components, and are a key contributor in employment creation,” Dr Owino said.

The ministry in partnership with the State Department for Industrialisation, State Department of Cooperatives, NCA, Kenya Bureau of Standards (Kebs), the National Industrial Training Authority (NITA), State Department of Vocational and Technical Training (TVET), Kenya National Trading Corporation (KNTC), Kenya Industrial Estates (KIE) and other agencies will form a network that will facilitate the Jua Kali sector to manufacture and supply the items allocated to them in the affordable housing project.

The purpose of the MSME Jua Kali Production Manual for the components of the affordable housingprogramme is to provide stakeholders with knowledge on the standards required to design and manufacture the housing items.

By standardising the design and production of these items, it will be possible to utilise Jua Kali artisans while providing them with new income generation opportunities.

Earlier in the year, the State Department for Housing and Urban Development contracted three Nairobi-based Jua Kali associations comprising artisans drawn from Ngong Road, Kamukunji and Kariobangi (Ngokamka Juakali Group) in the pilot phase of developing an integration model for MSMEs.

The group successfully won a contract to supply 8,400 windows and 7,000 doors for the first flagship project under the affordable housing programme at Park Road, Ngara, where some 228 units were recently completed in the first phase in which 1,370 units will be built. The units have utilised doors from the Ngokamka Group.

“The Jua Kali Production Manual provides guidance on the AHP standards and aspirations on the quality of the components to be produced by the Jua Kali sector. It is part of our joint efforts to upskill the players and improve the quality of their products through recognized quality assurance methods,” said NCA Executive Director Maurice Akech.

The Jua Kali Association National Chairman, Richard Muteti, said the sector must organise itself in order to handle better business by the government – one of the largest markets they could serve.

He urged artisans across the country to form groups as it is easier for the government to transact with associations rather than individual entrepreneurs.