Government prioritizes to grow manufacturing sector 2018/2019 FY

Written By: Nicholas Nduati/Christine Muchira
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The government plans to grow the manufacturing sector during the 2018/2019 financial year by bringing in two global tea processors, establishment of phone, laptop, and TV assembly plants, training and setting up of 5,000 cottage industries as well as buying domestically grown cotton, among other initiatives.

According to the draft 2018 budget policy statement, this will be realized by reducing by half the cost of off-peak electricity, reviewing work permit regime for expatriates and protecting local manufacturers from counterfeits goods.

The government will be placing special emphasis on the broad areas of Textile and Apparels, Leather products, Agro-processing, Manufacture of construction materials, oil, mining, ICT and fish processing to grow the manufacturing sector in the next five years.

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According to the draft 2018 budget policy statement, the Government plans to develop cotton production using hybrids which yield three times more than the present conventional varieties, buy domestically grown cotton, improve governance in the import rules for textile products to cushion local producers as well as offer incentives to investors to build modern ginneries and textile manufacturing plants.

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In the hides and skin sector, the government hopes to support local processing, train personnel and set up 5,000 cottage industries, complete the Machakos Leather Park and identify three more leather parks.

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To cushion local manufacturers, the state will review import rules for finished leather products with the aim of creating wider market access.

To promote growth of the agro-processing sector, the Government plans to support value addition to agricultural produce across the value chain.

This will involve mapping tea, dairy, meat, and crops value chains, attract two global tea processors in Mombasa, regulate milk hawking business, develop warehousing and cold chain stores and progress Mombasa food value add hub. In the blue economy sector, the government plans to set up a 20-million dollar fish feed mill and identify two aquaculture investors.

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The state further plans to enhance establishment of phone, laptop, and TV assembly plants, as well as five business process outsourcing players to create 10,000 jobs.

According to the draft budget policy statement, the government hopes to raise the contribution of manufacturing sector to GDP from the current 9.2 percent to 15 percent by 2022 by adding 2 to 3 billion dollars to the GDP and in the process increase manufacturing sector jobs by more than 800,000.

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