Manufacturing sector to get more budgetary allocation

Written By: Benson Rioba
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Growing the contribution of the Manufacturing sector to the GDP from the current 8 percent to 15 percent by 2022 is one of the key targets by the government.

The 2018/2019 budget has prioritized the sector being one of the key pillars of the Big Four Agenda.

Some of the priority subsectors in the budget include agro-processing, textiles and apparel, oil and mining, ICT, as well as Small and Medium Enterprises.

Creation of jobs and especially for the youth has been a key target for the government, with the manufacturing sector being earmarked as one of the pillars that will drive this agenda.

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Currently, the sector contributes only 8 percent to the country’s GDP; a figure the Kenya Association of Manufacturers says ought to be increased to over 15 percent by 2022 if it is to create 800,000 jobs.

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To support this, the 2018/2019 budget policy statement by National Treasury has outlined various sub sectors that will have more budgetary allocations.

Some of the sub sectors include agro processing, textile, leather, fishing, ICT, steel industry, building and construction, oil and mining as well as SMEs among others.

On the textiles and apparel sub sector, there are plans to review policies that will ensure players, and especially farmers get the necessary incentives to improve production.

Ensuring that all hides and skins are fully processed locally, and training personnel is also targeted.

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There are also plans to complete the construction of the Machakos Leather Parks as well as construction of three additional parks to support the local leather industry.

The Government will continue to develop industrial infrastructure such as Export Processing Zones, Special, Economic Zones and industrial parks across the country.

On ICT, the government plans to invest in the development of IT entrepreneurship programmes as well as strengthen innovation hubs that are already set up in the country.

Kenya being an agricultural country, the government plans to invest more in agro-processing of tea, coffee, meat, sugar, dairy, fruits and vegetables locally in order to obtain more value and create an additional 200,000 jobs.

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There are also plans to facilitate the exploration of coal and iron ore deposits, support value addition in oil production and develop policy and incentive framework to attract international investors to the sector.

Already, the government has cut off peak power tariffs to heavy consumers by half to reduce the cost of production to the manufacturing sector.

There are plans to also review the work permit regime and encourage expatriates whose skills support manufacturing sector, protect local manufacturers from counterfeits goods, and create an additional 1,000 small and medium size enterprises focused on manufacturing which will have access to affordable capital, skills and markets.

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