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Manufacturers seek to increase share in Kenya Power tenders.

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Manufacturers seek to increase share in Kenya Power tenders.

Manufacturers could benefit from local Kenya Power (KP) tenders if they leverage on the company's massive expansion programs in the coming years, the Managing Director of Kenya Power said yesterday at a suppliers' meeting held in Nairobi. Dr. Ben Chumo, the Managing Director of the power distribution company called on investors to consult the KP business strategy unit before investing blindly on KP related projects. The forum was jointly hosted by the Kenya Association of Manufacturers (KAM) and KP where local industrialists sought to know why they are not winning the tenders. “Every contract that we sign offers an opportunity and the Kenyan people should seize that opportunity,” he said and asked the manufacturers to bid competitively since even an increase of 10 cents in a quotation could make a big difference, if one thought of it as 10 cents per meter. 

Manufacturers brought up issues such as the continued use of imported content when the same is available locally and the failure to use the preferences for local procurement. KP also fails to confirm the capacity of tender winners in keeping with quantities supplied which leads to augmentation by imports. There have been cases of tender disqualification or failure to win on 'light' grounds not related to technical capacity or price of the product. They also place heavy emphasis on the nationality of suppliers rather than the confirmation of the 'nationality' of the product i.e the local content and there are concerns on the recent innovation of framework contracts for supply. KAM has observer status in KP tender committee and for the last three years has scrutinised the award of tenders. 

Dr. Chumo told participants that 36 sub stations at a total cost of  Kshs 10.45 billion will be constructed in 18 to 24 months. Four of the tenders in this project were awarded to local companies after being split into two between local and foreign firms. Contractors who were awarded these tenders promised to deliver the project in less than 18 months. Dr. Chumo said he would like to see a situation where the spider web concept common in India is adopted locally. “We need to create a web of networks so that when that currency lands on the web, it does not leave very soon,” he said adding that women youth and people with disabilities have been awarded Kshs. 300 million to date in tenders.

Projects such as the Last Mile include the construction of a 24,000 km LV line which will require 480,000 poles. Dr. Ben Chumo sought to know if they were available locally. He decried the lack of a companies manufacturing transformers in Kenya which are procured from India and China and challenged manufacturers to ensure that they spread investments around the country or in keeping with the KP strategy​ since a large number of upcoming projects will be in Mombasa and will require a lot of cement. He called for flexibility saying: “When we require some changes in our specifications, you should be there for us.”

Manufacturers sought to know why some local companies were not qualifying to get some of Kenya Powers tenders and complained that once they do not win KP tenders, they have a black out for up to three years which has a huge impact on the companies and job creation.
They also claimed that there is a big misconception that the cables & conductors sector do not have capacity when they have excess capacity. Representatives of wood farmers who were present in the meeting also complained that the country had over 40 treatment plants for Gum trees, a record unsurpassed in Africa and stockpiles of poles have accumulated in these treatment plants due to a lack of uptake. Meanwhile areas like Bomet which are good for growing Gum trees do not have a treatment plant. KP promised to continue to work with KAM on more mutually beneficial partnerships in future through similar forums in future. Ms. Betty Maina, the CEO of KAM, encouraged suppliers to ensure they are members of KAM for better organisation and representation. KP will work with KAM to confirm capacity of local manufacturers and the 'nationality' or 'Kenyanness' of the product. Suppliers of treated poles suppliers were requested to work in consortiums on bids as their number was too high and the capacity of some was small compared to the quantity requirements of KP contracts. 

KAM hosts sensitisation seminar on immigration issues

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KAM hosts sensitisation seminar on immigration issues

Kenya Association of Manufacturers (KAM) today hosted a sensitisation seminar for manufacturers aimed at bringing members up to speed on changes in Immigration requirements for various applications and to raise awareness on immigration processes. Addressing KAM members in Nairobi, the Director General of Immigration, Major General (Rtd) Gordon Kihalangwa spoke of the challenges faced by the immigration department such as porous borders, instability in neighbouring countries, human trafficking, smuggling, terrorism and manual processes in the department. He however mentioned that the situation has improved from previous years. He added that amendments to the new Security Bill should tighten areas that woul improve security in the counties.

He called for a more comprehensive view of security which should be looked at through the 5 vectors: bad politics, economic performance, environmental protection, societal issues- illness, and corruption and rogue security agencies. It is important to plan well, and ensure that employees are doing the right thing. Mr. Kihalangwa spoke of transparency measures that have recently been undertaken at the department saying: "Immigration does not favor or prejudice when issuing work permits, citizenship or permanent residency," he said adding that Immigration details are everywhere and any unethical conduct should be communicated. In case of delays in issuing work permits, the Director requested that members apply for special permits. 

This year there has been an effort to minimise the back log on citizenship applications and it now takes 3 to 5 days to renew a passport and 10 days to get a new passport. 800 passports are processed in Nairobi while 80 are processed in Mombasa and 80 in Kisumu daily and 350 permits are issued weekly at a cost of 22,000/- per permit.  He also spoke of efforts to eliminate corruption in the system and said that 12 officers had been sacked for corruption related issues. 

New Developments
New developments included a centralised  and cashless payment system, and the department is in the process of procuring an e-passports and an e-visa system. There is also a restructuring of regional offices and recruitment of more staff. In the cases of Appeals, the director of immigration services can apply to the Cabinet Secretary. 

Members had an opportunity to ask questions regarding the procedures and get clarifications. A distinction was made between Permanent Residency which is the option for people who do not want to lose their citizenship in another country such as India. The permit is available for people who have been in the country continuously for 3 years. Citizenship is for people who want to enjoy all the other rights and freedoms such as those enjoyed by Kenyans for example Voting. Dual citizenship is also only available for Kenyan citizens by birth who would otherwise lose their Kenyan citizenship if they were to take up citizenship in another foreign country. 

Currently there are 1,189 citizenship requests and the Director has come up with a priority list and communicated to all applicants on the status of their applications. Immigration is trying to organise and ensure that there are no backlogs by the end of the year. For permanent residency there are currently 525 pending applications. The process to handle them is also ongoing.
 
The immigration team will communicate if there are any delays in issuance of work permits, permanent residency and citizenship as they hold weekly meetings for approval. If work permits applied 3 weeks prior to expiry, it will take 2 months to process. KAM will look into the possibility of expanding the partnership with Immigration going forward. In return, Members need to ensure their workers are on valid immigration status as failure to do so will result in enforcement by the department. Members are also encouraged to seek permits only if the skills are not locally available.

Last year, the following changes were made at the immigration department.

1. Effective 3rd November 2014 all processed immigration papers i.e. Notification of work permit approvals, Deferral notes, rejections, special passes will be dispatched through postal box address, therefore members should give correct addresses in their applications.
2. New Immigration check list form needs to be signed -  When submitting work permit/special pass/ pupils pass/Dependants pass applications, the person submitting application will be required to sign the check list, produce an original ID card / passport and submit a copy of the identification documents
3. For class G permits (investor permits), the application should have a separate list of Kenyans already employed (in case of renewal) 
4, For class D / employment permit - Provision for understudy details should include certified copies of academic certificates & full contacts - Address, email and cell phone number
5. Copies of passport - to show current immigration status if in the country.
6. Reminder - application for permit renewal should be submitted to immigration 2 months prior to expiry of the permit.

KAM processes work permits for members. For more details contact This e-mail address is being protected from spambots. You need JavaScript enabled to view it

The presentation can be downloaded from here

Mombasa Manufacturers meet with KRA Officials to discuss challenges on Bonds Cancellation

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Sustainability takes centre stage as a key concern for African CEOs

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African CEOs are the most concerned corporate leaders about sustainability. According to an Accenture report, 68 per cent of Africans believe that sustainability is vital to the success of their businesses while only 34 per cent of CEOs share the same concern. This figure fell from from the 48 per cent in 2010. “In this new, increasingly connected world, it is no longer possible to operate as detached units, solely focused on profits. Business and society are now interlinked more than ever before,” said Mr. Bob Collymore, CEO of Safaricom Ltd addressing CEOS at a forum held yesterday in a Nairobi hotel.

The forum was organised by the Global Compact Network Kenya which enables more sustainable businesses.  As a society of like-minded enterprises, the Global Compact is the world’s largest voluntary corporate responsibility initiative which relies on public accountability, transparency and disclosure to complement regulation and provides space for innovation and collective action. Safaricom Ltd is a member of the Global Compact Network.

Dr. John Murton, British Deputy High Commissioner called for more commitment from the private sector. “Corruption remains a key inhibitor to accelerated growth of business and the economy. The importance of a critical mass on a cause such as this cannot be said enough,” he added

A panel consisting of Mr. Carles Amengual, Managing Director at BASF East Africa, Mr. Marc Engel, Executive Vice President for East Africa & New Markets and Mr. Vimal Shah, the CEO of Bidco Oil Refineries, discussed how companies can enhance competitiveness through sustainability. Networks supporting ethical business practices are and globally, legislation on corruption is going global. Companies operating in the UK have to comply with the UK bribery and corruption Act which restricts unethical behaviour for any company registered in the UK or transacting with such a company.

Ms. Betty Maina talked of the difficulties in reporting sometimes cited by companies saying; “Sustainability reporting does not mean that a company has met its ethical business goals but that it is committed to meeting them and has put in place the framework to keep track of developments.” She called for more businesses to act ethically not just to fight corruption but for sustainability purposes.

ENDS

ABOUT Global Compact Network Kenya

The UN Global Compact is a strategic policy initiative for businesses that are committed to aligning their operations and strategies with ten universally accepted principles in the areas of human rights, labour, environment and anti-corruption. The Kenya network currently with 92 members is the local focal point working to support companies to integrate the ten principles within core business.


For more information please contact:

Judy Njino / Alfred Osiko, Global Compact Network Kenya on 0722201368 or email This e-mail address is being protected from spambots. You need JavaScript enabled to view it or This e-mail address is being protected from spambots. You need JavaScript enabled to view it


Manufacturers set seven point priority agenda for 2015

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Manufacturers set seven point priority agenda for 2015

 

Over 200 local manufacturers held a forum last week to discuss priority areas that need to be urgently looked into this year for a more robust industrial sector. The outcome of the meeting will contribute to formulation of the Manufacturing Priority Agenda 2015 which will guide the advocacy efforts of the association with the government, its agencies and regional institutions.


In her speech at the event, Ms. Betty Maina underscored the need for the exercise saying: “different economic aspects affecting trade and the business environment take on different hues, sometimes gaining importance or sometimes retreating in the background in the light of more pertinent issues. This calls for a different agenda and a different strategy every year.”


So far, the seven pillars consist of consolidated policy areas that have been identified and which if propped up will help the sector continue on an upward expansion trajectory to become the leading economic activity in the country. Manufacturing contributes around 21.3 per cent of Kenya’s GDP and is ranked second after Agriculture. Among the key pillars identified is more secure investments and increased market access to old markets and the opening up of new ones so as to increase exports. This can be done by bouying up the ‘buy kenya, build kenya’ policy and also through elimination of a double taxation structure and other regulatory overlaps brought on by devolution. Other pillars identified include securing justice for the economy, infrastructure, security, constitutional gains and the future of industry.


Mr. Konstantin Makarov, director at StratLink - Africa, Ltd painted a favourable outlook for the sector in 2015. “Tumbling global oil prices bode well for manufacturers with a discernible downtrend in the Producer Price Index in the second half of 2014. As a net importer of oil and petroleum products, the country stands to benefit from the downtrend in global oil prices,” he said. He asked participants to continue lobbying for more cost effective energy to mitigate the bite when prices stabilise and called for a Stabilization Fund, which targets oil exports in the coming years, to mitigate price volatility and revenue shocks. He also posited an increase in manufacturing costs due to the increase in duty on imported paper from 10 per cent to 25 per cent.

CRA County Money Bills Forum held in Meru

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County Revenue Bills Workshop Held at Alba Hotel in Meru

A forum for counties on county money bills, which held from 17th - 19th November 2014. The CRA led two and a half-day workshop that was held at Alba hotel in Meru county, bringing together County Executive Committee Members of Finance and Economic Planning, Directors of revenue as well as members of the County Assemblies from the Finance Budget and Appropriation Committees. Participants were drawn from 6 counties namely Meru, Isiolo, Garissa, Mandera, Marsabit and Wajir counties. The private sector was represented by KAM, KNCCI Isiolo and Meru, the association of livestock farmers, KENFAP and other independent business people.

The participants discussed, among other things the outcome of the Maanzoni conference, the legal background of the county revenue laws especially the rating bill, the revenue administration bill, the licensing bill, the public participation bill and the finance bill. They stressed the need for cohesive revenue collection in the counties as well as an all-inclusive law making process, especially compliance with the constitutional requirement of public participation. The business community highlighted multiple taxation, especially for livestock moving from one county to another and many other business barriers along the way that delay delivery. They also cited the lack of willingness from the counties to work with the business community manifested by extortion and harassment by the authorities and a lack of proper policies governing the livestock sector.

From the meeting, the need for harmonized licensing, especially the single business permit emerged. The county representative agreed to adopt the CRA model laws after making some modifications and these bills will be reviewed in the next two weeks. They also highlighted the need for counties to introduce incentives to attract investors and a proposal for revenue sharing with the business community. A case in point is Marsabit county which gives back 30% of revenue collected from the slaughter houses to the farmers association for maintenance and other services of the facilities.

Regarding the issue of low turnout during public participation forums, it was resolved that counties set aside a reasonable budget to mobilize the public and exploit various mediums for wider reach like radio, print media, churches/mosques, organized groups, among others.


A consultant has been appointed for each cluster group to collect information that will assist in drafting and/or reviewing County Revenue Laws with an aim to improve on their quality as well as ensure rational revenue laws are in place in the Counties. After this meeting the consultant will be available to all counties to help them draft any of the 5 laws discussed during the meetings. 


CRA County Cluster Meeting held in Mombasa

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A forum for counties on county money bills, which held from 17th - 19th November 2014. The CRA led two and a half-day workshop that was held at Alba hotel in Meru county, bringing together County Executive Committee Members of Finance and Economic Planning, Directors of revenue as well as members of the County Assemblies from the Finance Budget and Appropriation Committees. Participants were drawn from 6 counties namely Meru, Isiolo, Garissa, Mandera, Marsabit and Wajir counties.

 

The Consultant, Mr. Nyamondi, provided a background on Maanzoni and the resolutions from the meeting to partner with counties to ensure that the Revenue laws met the Constitutional and legislative threshold.


The participants were of the view that the counties over projected their revenue collections and the CEC Finance of Taita Taveta, Ms. Flora Maghanga Mtenya spoke of the lack of legislation which has led to delayed collections and demonstrations by business people. This is due to the fact that Counties were unable to implement the necessary laws in time. The forum was therefore important to assist counties to collect revenue.


The business community also made a presentation on their concerns such as a lack of supporting legislation, multiple taxation, a large variety of charges applied in different counties, service delivery for fees charged and lack of adequate public participation. Speaking on behalf of the business community Mr. Shabir Issak and Ms.Monica Solanki (ICPAK& KATO) emphasized the need for the formation of an enabling environment for business and the creation of the County Budget and Economic forum to ensure that the business community is involved in development of the laws.


The county representatives expressed the willingness of County Governments to listen and foster trust between the counties and the business community since a well-balanced and inclusive approach is essential for the proper governance of any country. The difference between council and county government is accountability which is determined by enacted legislation, how these laws are made and public participation at the county level.


Presentations were made by the Consultants on the constitutional and economic basis for Revenue Laws and the emphasis made on the key revenue laws which include the Trade Licensing Bill, Revenue Administration Bill, Property/ Rating Bill, Public Participation Bill and Finance Bill.


Focused group discussions to share and discuss experiences, give a status of the revenue laws, provide an indication of the assistance needed in the various counties and agree on a way forward were held.
Following discussions, the following are the recommendations proposed;

  It was agreed that the participants would share what they have learnt from the forum to all the relevant people in their counties so that the revenue legislation could be fast tracked.

 County participants in the forum would consult with the relevant persons in their counties and provide tentative dates for the consultants to visit their counties and help develop/finalize the revenue legislation.

  The counties would share any laws they already had in draft/committee stage/executive with the CRA Consultants

 KAM would provide the contacts of all their business partners in the cluster counties to facilitate future engagements with counties especially in public participation.

 There was need to have greater inter-relations among the cluster counties as it was noted that some counties were quite behind with their legislation e.g Lamu

 There was need to have the county executive members in the relevant sectors (finance & trade) come together to fast-track the process on legislation of revenue laws. It was proposed that Taita Taveta County would chair the forums.

  It was proposed that in future meetings on legislation, county attorneys or legal officers should get invitations to attend the forums.

  It was proposed that once the TORs for this project are accomplished, there was need to have a forum to brainstorm on other revenue raising avenues for counties.

  It was proposed that the county executive members should send the same people in future forums on the same subject for ease of understanding the discussions and for continuity.  

  It was recommended that CRA, should support another forum that would provide for expertise such as the current forum It was agreed that that there would be another follow up meeting around March to evaluate the progress of revenue legislation in each county.


 

County Money Bills Cluster Meeting held at Vihiga County

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County Cluster meeting held in Vihiga

CRA today (20 Nov) held a county cluster meeting for county representatives drawn from Nandi, Bungoma, Vihiga, and Busia and Laikipia Counties in Vihiga County. The meeting was a follow up for the maanzoni meeting which resolved to have consultants visit cluster counties to assist them to come up with properly drafted revenue laws.

During the forum, a legal background of the county revenue laws was given and the tariffs and pricing policies discussed. Due to the hasty transition from devolution, collection of county revenue has been fraught with issues for most counties. CRA Commissioner, Prof. Kimura  also said gave a background of development in country saying that Kenya was lagging behind countries such as Singapore which also got independence at almost the same time as Kenya. “Sessional paper no. 10 of 1966 created a blueprint for Kenya’s development and it was authored by 2 people one who was Tom Mboya, then the secretary general  and the other who was Mr. Mwai Kibaki. Singapore also crafted a development plan at the same time. 50 years later the GDP between two countries is very big. The reason Singapore was that they kept to the plan," he said and added in public finance a solidly built finance bill is needed otherwise, you cannot do any proper planning. 

According to CRA legal officer, Martha Maneno, “Ideally we should not have repealed the local government Act without transitional provisions, but this was done automatically after the elections. The 3 months provided for by the County Management Transitional Act was not sufficient for Interim laws to be passed,” she said.

Finance Acts have since then been used as a basis for collecting revenue but people are bound to oppose a finance bill without a clear tariff and pricing policy. Counties are using the Finance Act to set these tariffs and prices instead of setting charges while in reality the Finance Act should only be used to amend the revenue laws. The proper way to set up these tariffs and prices is through the use of regulations. Prices for services should be anchored in country regulations. To use the example of Agriculture which is a county function, the CEC of Agriculture can put it in regulations which set the tariffs. If new rates are introduced every year, the end up being problematic, because they have to be ratified through participation. This has led to the finance bills in various counties being rejected.


Finance Acts should just amend the revenue legislation but not to administer or collect revenue. But most counties do not have the necessary enabling legislation to provide a basis for the finance bills. Counties are using by-laws under the repealed local government act. This confusion has led to double taxation and has affected investors and local business people alike in a detrimental manner. Recommendations from the Maanzoni forum included streamlining taxation and licensing regimes. Charges should be pegged to a service delivered by the county so that businesses don’t resist county charges as they have been doing.  Taxes on the other hand do not have to be based on a service. A national forum will be held annually to review these issues and clusters will also meet at least twice a year to discuss the issues that arise. Consultants will also help Counties to attract investments so as to raise more revenue.


Prof. Joseph Kimura spoke of the difficulties that the CRA has encountered to date in the counties especially in encouraging counties in raising their own revenue without counting on revenue from National Government.


Georgina Wachuka, head of regulatory affairs at KAM spoke of challenges faced by business were too many and confusing. Many companies have now removed branding from their transport vehicles so as to stop paying multiple entry levy fees. The cost of Single business permits has in some instances increased by as much at 1000% which has had seriously implications for businesses. 

County Money Bills Cluster Meeting held at Lake Elementaita

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County Money Bills Cluster Meeting held at Lake Elementaita

Africa Industrialization Day

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Statement by Betty Maina, KAM CEO- Africa Industrialization Day 

As the continent observes Africa Industrialization Day today, KAM joins the rest of the African Union in its drive towards industrial growth and economic transformation in Africa.

Manufacturers in Kenya appreciate the good work that the Government is doing in creating an enabling environment in Kenya and I believe that we can work together to create employment and reduce the cost of doing business in the country through partnerships between the public and private sector.

In this industrialization journey, we are going to ensure that we leave no one behind and include, especially, the small and medium enterprises (SME). KAM will be rolling out programmes in the coming year targeted at developing the SME sector.

Manufacturers are keen, to tap into the immense opportunities that are on the African continent. This can only be done if we address economic fundamentals which are key to ensuring that we attract both local and international investors to expand their operations in Kenya and export to the African continent and beyond.

We are grateful that our Government has embarked on an initiative to open new markets in Africa and we are hopeful that as we open the markets and sign the trade agreements these will be followed up by quick implementation that ensures that trade commences to the mutual benefit of all stakeholders.

As we intensify our efforts to create more jobs and improve efficiency in the manufacturing sector we are pleased that we have started making headway with Government on the Buy-Kenya Build Kenya initiative. We also look forward to enhancement of the policy on local content for the Buy Kenyan- Build Kenya to increase patronage of locally produced goods and services. Multinationals in the manufacturing community are also discussing a common policy on how to increase uptake of locally produced products and services in their value chains.

Manufacturers continue to support productivity based wages, increased trade on the African continent, human capital development, reducing the cost of doing business, market access issues in the East African Community and trade with European countries; continuous engagement with the manufacturing sector and promotion of small scale enterprises.

The manufacturing sector currently employs over a million people directly and millions more in downstream activities. There is a drive by the manufacturing sector to create more jobs and reduce the number of jobless people in Kenya. This is in line with the Government’s quest to create 1 million jobs in the next three years.

We may not be where we want to be as a country but we applaud efforts that we are seeing towards achieving our goals as a nation. We as industry would like to empower our local talent and are pleased that there are positive developments in the education sector where Government is aligning the education curriculum to ensure that the skills from Universities and Vocational Training Centres match industry requirements.

 KAM represents a constituency that contributes to wealth creation by value addition through the manufacture of goods that are sold in local and international markets. The over 850 companies which are members of Kenya Association of Manufacturers (KAM) are  keen on spurring economic growth and I must say that we have done the best we can to export despite the challenges that we have in the operating environment.

KAM applauds the Government in its efforts to reduce the cost of doing business. We remain grateful to Government for efforts towards reduction in the cost of power and would like to see the charges going down to below USD 0.10 per kilowatt hour as promised.

 As a country we pride ourselves with a lot of products which by quality and standards can compete anywhere in the world. There is need to protect the local industries from intellectual property right thefts and trade in counterfeit goods which has led to the closure of some industries. Manufacturers would want to see the current investments protected and also attract more investment to complement the already existing industries. To this end we urge Government to maintain policy stability to ensure that investors are not subjected to sudden policy changes.

The African market continues to be the largest destination of Kenyan goods and there is need to guard this market jealously.

Manufacturers do not want to rest on their laurels because of the huge market share that we have in these markets because we are witnessing that the competitiveness of our products is largely being threatened by the high cost of doing business in Kenya.

 As  KAM we believe in inspiring global competitiveness because we believe that for us to tap into the global markets our products need to be able to compete with our competitors from all over the world.

Industrialization will play a crucial role in increasing our exports to the global market.  It is without any doubt that countries that have placed great emphasis on industrialization the world over have done well. No country in the world has achieved prosperity without a vibrant industrial sector. This growth will have to be underpinned by a growth strategy which promotes increased resource-based product range, moving up the ladder in agro-processing and expanding exports of resource-based commodities within regional markets.

 

It is important to mention that EAC with 136 million people, COMESA with 433 million people and USA under AGOA with 400 million people and Europe with 400 million people will continue being important markets for Kenya.

 

We need to maximize our existing market access which we have already created either through entering free trade areas like COMESA or East African Community and the EAC-EU Economic Partnership Agreement- whose negotiations have been concluded and Kenya we are glad that Kenya will be back on the EU Market Access regulations with effect from January 1, 2015 although we had hoped that negotiations would have been concluded sooner.

 

For Kenya to forge ahead in increasing export trade, export diversification will be quite necessary and will require to be sustained by appropriate and coherent policies. This requires a stable macro-economic environment, provision of correct incentives for promotion of primary commodity processing and resource-based manufacturing activities and complementary policies for attracting investments.

On the EAC front, there is need to fast-track, at high level with other EAC Partner States, the realization of  a full East African Common Market or a single market and urge the Partner States to encourage free movement of  goods, services and  persons.

We still call upon the Kenyan Government to consider recapitalization of the Industrial Development Bank or another investment vehicle for financing industrialization projects in the country.

As we seek to expand the manufacturing sector, we continue to plead for a conducive operating environment. We can only be the industrial giants that we dream to be if the operating environment is friendly to our businesses.

We remain committed to working with all stakeholders  to realize a double digit growth in the economy and this calls for removing obstacles in the way which are slowing down growth and industrialization.

In conclusion, it would be a great joy for industry if a percentage of the country’s GDP could be channelled towards industrialization.  We believe that a country is as good as its industry and we can make a difference in this generation for posterity. The main message from manufacturers is that we support Industrialization and would like to continue working with all stakeholders to make Kenya an indomitable industrialized nation in Africa. 

May Africa continue to works towards industrialization!


Closure and relocation of local Industries: Meeting with the Parliamentary Committee on Finance, Planning and Trade

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Closure and relocation of local Industries: Meeting with the Parliamentary Committee on Finance, Planning and Trade 

Members of the Kenya Association of Manufacturers (KAM) today (30 Oct.) appeared before the Parliamentary committee on Finance, Planning and Trade to discuss the recent spate of closure of local industries. Eveready, Cadbury and a number of local companies have recently shifted their operations to other countries and the committee sought to understand the reasons for these closures. 

KAM was represented by the CEO, Ms. Betty Maina, accompanied by board member, Mr. Polycarp Igathe and the CEO of partner BMO KEPSA, Ms. Carol Kariuki.  Representatives of member organisations that are sorely affected by unfriendly regulations were also present such as General Motors and Ndume Agricultural and the Edible Oil Sub sector (EOSS) was represented by Mr. BJK Karingithi, 

Ms. Maina presented the challenges leading to the relocation of multinational companies which included the high cost of production that is hurting industry.
She also talked of the lack of the right infrastructure to support sophisticated manufacturing. "
While the cost of power has started to come down with quantity increasing to 5000 MW, other areas that do not require substantial resources continue to hurt us," she said. The tax administration has been particularly harmful since Tax rates have a differential impact such as the exempt vs zero rated VAT status which has been difficult for certain sectors such as the pharma sector. 

Market access in the region has also been deeply impacted by the delay in signing of EPAs and other hindrances in the East African market such as the duty regime continue to dog exporters. 

She also spoke of substandard, counterfeit and illicit goods which contributed greatly to the departure of Eveready. The failure to fight counterfeits means that these companies can no longer compete in a level playing field.
Mr. Karingithi in addition explained that these same challenges are now affecting the Edible Oil sector that they are no cutting down on their staff while Mr. Igathe added that cartels in the country were selling fake LPG cylinders.

Mr. Benjamin Langat, chairman of the Parliamentary committee, committed to scrutinise factory closures and relocation from Kenya. He promised that the committee will meet with the different regulators and make enquiries to see what is being done to stem this tide. They also promised to engage the Treasury and to make proposals to correct VAT anomalies. Part of the scrutiny will also involve in the long term, an enquiry into Industrialisation as the key to advancing manufacturing in the country. 

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