Industry Calls For Immediate Action To Bolster Economic Recovery

The industry has urged the government to urgently address headwinds to economic recovery following the adverse effects of the COVID-19 pandemic.

This was during the launch of the Kenya Association of Manufacturers (KAM) 2021 Manufacturing Priority Agenda (MPA), themed From Surviving COVID-19 to Thriving: Manufacturing Sector Rebound for the Sustained Job and Investment Growth.

Speaking during the launch, KAM Chair, Mucai Kunyiha, noted that economic recovery highly depends on the goodwill and full commitment from the government. “Efforts to enhance our productivity are hampered by the increasing cost of doing business and low competitiveness. Some of the issues that contribute to this are regulatory overreach high cost of energy, transport, and logistics costs. To resolve these headwinds, it is paramount that government and its agencies strongly commit and demonstrate goodwill to securing the future of our country’s economic development,” explained Kunyiha.

The KAM Chair added that besides persistent high fiscal deficit, increasing public debt, and regulatory overreach, manufacturers are also struggling with an inefficient transport and logistics system, causing unnecessary delays at the port of Mombasa.

“Currently, containers take more than four days to get cleared at the port, and cargo owners still get charged for storage and demurrage costs. The delays lead to challenges in sourcing for raw materials, forcing companies to close some lines due to interruptions in scheduled production. Additionally, the high cost of storage and demurrage fees increases the cost of doing business. We urge the government to make intentional efforts towards ensuring efficiency at the port, for seamless movement of cargo,” noted Kunyiha.

Speaking during the launch, Cabinet Secretary for Industrialisation, Trade, and Enterprise Development, Betty Maina expressed the government’s commitment to streamline its operations to create a conducive business environment in the country. “Previously, the need for approval from different offices increased the cost of doing business and provided opportunities for rent-seeking. The one-stop-shop for service delivery for businesses seeks to resolve this and shorten the time taken to adhere to regulations. We have also held engagements with county governments to harmonize county cess, fees, and charges to reduce the cost of doing business amongst counties,” remarked Maina.

She also appreciated the cordial relationship between the government and private sector, saying, “We continue to enhance our collaboration, to reach the grass root levels, and to promote ethical business practices for our country’s economic growth.”

The MPA is an annual publication that guides the Association’s advocacy efforts with Government and its agencies. This year’s MPA is guided by five pillars to support the recovery of the manufacturing sector from the devastating effect of COVID-19. The pillars include:
• Enhancing competitiveness and level playing field for local manufacturers
• Enhancing market access for locally manufactured goods both in local and export markets
• Promoting pro-industry policy and institutional framework
• Promoting SME Development
• Enhancing industrial sustainability and resilience