President Uhuru Kenyatta has directed the Kenya Ports Authority, the Anti Counterfeit Agency, the Kenya Revenue Authority, and other relevant government agencies to collaborate and step up the fight against illicit trade.
President Kenyatta decried the high level of corruption and bribery in the country which he says is detrimental to not just the manufacturing sector but to the realization of the Big Four Agenda as well.
The manufacturing sector is one of the key pillars in the Big Four Agenda where the government is keen on improving the sector’s contribution to the country’s GDP from the current 9% to 15% over the next five years.
Among the various targets by the government include improving the sector’s competitiveness globally as well as promoting Small and Medium Enterprises to ensure they too contribute to the Big Four Agenda.
The sector has however been mushroomed by illicit trade which according to the Kenya Association of Manufacturers (KAM) is costing the country over Ksh 200 billion in revenue.
KAM says illicit trade is accounting for about 40 percent of the goods in the country.
During the 8th Presidential Roundtable Forum with the Kenya Private Sector Alliance (KEPSA), President Uhuru Kenyatta put the Anti Counterfeit Agency (ACA), the Kenya Bureau of Standards (KEBS) and the Kenya Revenue Authority (KRA) to task to explain why the country was losing billions of shillings to this vice despite the numerous interventions and laws that have been put in place over the years.
The Head of State condemned the high level of bribery while clearing goods at the Port of Mombasa, as well as while getting standardization stamps from KEBS, saying it was the main cause of increased importation of counterfeit and substandard goods, that are not only putting the lives of Kenyans at risk, but also derailing the local economy.
He has urged all involved authorities to work together to fight corruption and has called for adherence to the highest level of integrity and accountability to curb the dumping of such goods into the country. He noted that some public officers have been compromised and have become complicit and has warned that those involved in this vice will face the full force of the law.
To this end, President Kenyatta has appointed the Deputy Head of Public Service Wanyama Musiambu to head a taskforce that will develop and implement key interventions to bring illicit trade to zero.
The taskforce will comprise of among others, officers from the Kenya Ports Authority (KPA), the Anti Counterfeit Agency (ACA), the Kenya Revenue Authority (KRA), the National Police Service (NPS), the office of the Attorney General (AG), officials from the Ministry of Trade and Industry as well as other relevant players.
President Kenyatta directed the taskforce to come up with the interventions in the shortest time possible to ensure the country’s economy does not continue to bleed.
The interventions proposed by manufactures to curb counterfeits and substandard goods include, declaring illicit trade a national disaster, having a well resourced multi institutional agency approach and supportive legislation, sealing porous borders, ports and airports, as well as implementing the Trade Remedies Act 2017. They also want the government to impose higher taxes on imported finished goods which they say has given unfair competition to locally produced goods.
On supporting SMEs to ensure they fully contribute to the manufacturing agenda, Treasury Cabinet Secretary Henry Rotich says the process is underway to develop the Biashara Fund which will be mandated to provide finances to SMEs.
The relevant legislation is also being formulated for the formation of the Kenya Development Bank. President Kenyatta is also expected to launch a holistic SMEs framework later in the year that will guide on how best SMEs can contribute to the realization of the Big Four Agenda.
Manufactures have also petitioned the government to remove all taxes and levies on power bills to bring down the cost of power and reduce operation costs.
Manufactures say the cost of power has increased 7.3 percent over the last four months due to numerous levies. Energy Principal Secretary Joseph Njoroge however says reducing such levies would require deliberations with all involved agencies, as well as Treasury, to ensure all regulations are adhered at. The government has already reduced by half night tariffs for manufacturers to help bring down their operation costs.
Manufactures in the country also want restructuring of KENGEN, KETRACO, KPLC, allowing for net-metering and energy wheeling agreements, as well as restructuring of Time of Use Tarrif.
Other key issues that came out from the meeting include poor market access for Kenyan products, low promotion of locally manufactured goods, unpredictable and unstable industrial policies, high cost of labor, delayed payments by government suppliers, as well as logistics and transport inefficiency.
President Kenyatta has urged the Kenya Association of Manufacturers (KAM), as well as the Kenya Private Sector Alliance (KEPSA) to involve the relevant government agencies to come up with amicable and sustainable solutions and policies that will enhance the sector’s contribution to the country’s GDP as well as create more job opportunities especially for the youth to drive economic growth.
Other focus areas in today’s meeting included improved Food Security, Affordable Housing and Universal Healthcare, which are all key pillars under the Big Four Agenda.