Kenya Association of Manufacturers


County Government Focuses on Infrastructure Improvement

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County Government Focuses on Infrastructure Improvement

The County Government of Uasin Gishu has recently focused on developing and improving infrastructure within the County. On roads, over 900km of roads have been graded and murraming is being done. The roads in focus include; improvement of link roads that join the main highway. Completion of the Kapsoya road will also ease traffic congestion along the highway and the CBD. There has also been on-going improvement of street lighting and drainage works in Eldoret town alongside tendered for tarmacking of major streets in Eldoret town (64 St, Muliro and Gen. Kago). Furthermore the County Government has embarked on development of walkways for pedestrians along Iten Road and Uganda Road.

Apart from this, development of a new fire station has been tendered at Maili Nne to enhance rapid response by fire and the disaster management team within the region. The County has also focused on increased capacity in roads and survey divisions for efficient delivery of service.

IPOA strategic plan

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 IPOA launches its 4 year strategic plan

The independent Oversight Authority (IPOA) on 11th September 2014 launched its strategic plan for 2014 – 2018.This Strategic Plan highlights several strategies that IPOA intends to adopt to implement its mandate and functions,and achieve desired outputs during the four-year planning period.These strategies include: organizational development, performance management, ICT,resource mobilization, stakeholder engagement, communication and outreach, mainstreaming human rights, diversity and ethical behavior, and mainstreaming gender.These strategies willimprove IPOA’s impact and effectiveness in the ongoing police reform agenda in the country.The strategies will also entrench the relevance of policing oversight in Kenya.

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Standard Gauge Railway (SGR) Consortium Meetings on Local Private Sector Caucus establishment

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KAM participated in the Standard Gauge Railway (SGR) Consortium Meetings on Local Private Sector Caucus establishment held 10 – 12th September. The meeting was organised by SGR Consortium whose mandate is to facilitate effective local private sector involvement both in the construction and post construction process of the railway network. The agenda was establishment of local private caucuses which will form the structures and framework essential to engage the SGR contractor (CRBC: China Roads and Bridge Company).

The caucuses will provide a platform for representing local capabilities as highlighted in the draft bills of quantities as well as to renegotiate expected capacity of local content to be integrated within the SGR project.

Key issues raised:

     1.     There lacks clear structures and framework through which to define the 40% local content input; clarity on whether local content means locally produced/manufactured products or locally source products regardless of whether imported or locally manufactured is required.

     2.      There is a time constraint given that the SGR construction has already been commissioned by the President and the commencement date due in October, 2014.

     3.      Currently CRBC has not shared the full SGR draft bill of quantities and the initial 5 year work plan with the local private sector; this is hampering the local players to identify what areas they can take up during construction and post construction stages.

     4.      The local private sector is still in the dark about the ongoing review of SGR work plan to reduce it from 5 years to between 3 -4 yrs.

Way Forward

     1.      Putting in mind that CRBC is the main contractor with the full discretion on sub contracting, SGR consortium should enhance proactive involvement of the private sector in SGR project, and negotiate for local content adoption by the contractor through effective caucus representation; Every caucus to be represented by two nominated members.

2.     Urgently seek to access full information on SGR draft bill of quantities and material specifications to assist the local private sector to participate effectively.

3.      SGR consortium to work with all stakeholders and government agencies to ensure CRBC provides for knowledge transfer framework in readiness for handover of the project after completion.

4.      In the spirit of 'Buy Kenya Build Kenya' the consortium should as well consider looking into broad based issues of customs and tariffs to review maximum opportunity for the local private sector involvement in the SGR construction process.

Update on EAC - EU Economic Partnership Agreement (EPA) Negotiations

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Update on EAC - EU Economic Partnership Agreement (EPA) Negotiations

An emergency Extra-ordinary Meeting of the Sectoral Council on Trade, Industry, Finance and Investment (SCTIFI) was held on  9 – 10 September 2014 in Arusha to consider the way forward on the EAC-EU EPA negotiations in view of the issues that remain outstanding and the deadline of the EU Market Access Regulation 1528/2007 on 1st October 2014. 

The meeting was attended by Senior Officials and Ministers from EAC Partner States with the exception of the Republic of Burundi and the United Republic of Tanzania, who informed the Secretariat that they were unable to attend due to the short notice for convening the meeting. In line with the EAC Rules of Procedure, the meeting proceeded on a consultative basis, and the outcome will be submitted to the Republic of Burundi and the United Republic of Tanzania for their comments.

The discussions focused on the outstanding issues, after no agreement was reached by EAC and EU in the Kigali meeting.


The Ministerial meeting reached a consensus on all the five areas below where EAC and the EU have had divergence for a very long time:

     1.      Duties and Taxes on Exports

     2.      Domestic Policy Measures

     3.      Relations to Cotonou Agreement

     4.      Good Governance in Taxes

     5.      Consequences from other Custom Union Agreement concluded with EU

A road map for conclusion and initialing the EPA by 30th September 2014 was also agreed upon. It is due for consideration to the EAC full Council meeting scheduled to take place between 15th and 20th September 2014.

Given this status KAM would like to clarify that:

      ·        Initialing of the EPA by 30 September 2014 will play a key role in the reintegration of Kenya and other EAC Partner States in the Market Access Regulation (MAR) 1528 of December 2007.

      ·         The Government is working round the clock to have Kenya and other EAC Partner States reinstated in the MAR on the basis of the initialed EPA. If this effort bares fruits before 30th September 2014, Kenya will continue exporting to the EU market on duty free basis.

      ·         If current efforts by the Government fail to have Kenya reintegrated by 30th September 2014, it means that Kenya will start trading with the EU on GSP basis with effect from 1st October 2014, where most of Kenyan products will start attracting import tariff.

      ·         The period under Kenya will continue trading under GSP, if the effort for reintegration into MAR by 30 September fails will be very short. Assuming that the EPA is initialed by 30th September, it is estimated that it will take 8 to 12 weeks to have Kenya and other EAC countries reintegrated to MAR through an EU process of MAR amendment. It is therefore important that the EPA be initialed by 30th September to ensure that the GSP trading arrangement lasts the shortest time possible.

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Nyanza/Western August 2014

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Regions Plan Investor Forum

Investment in value addition, logistics and storage for agricultural produce tops the Agenda as western Kenya Counties prepare for a symposium of farmers, financiers and investors. Sixteen county governments keen on attracting the bulging young population to farming will attend the meeting, which will be held at Kisumu’s Tom Mboya labour college from September 24 to September 27. More than 500 delegates from the public and private sectors are expected to attend. The symposium will seek ways of engaging counties and the national government to promote Agricultural focused policies.

The forum is expected to push for public private partnerships and investment in areas that will boost incomes of millions of small scale farmers who are the bulk of the regions poor. “The Western Kenya Agribusiness Exchange will, among other things, facilitate structuring of joint initiatives, including public private partnerships and external financing”, planners said.

Kisumu, Siaya, Homa bay, Kisii, Nyamira, Migori, Busia, Kericho and Nandi which have been working on how to ease trade in agricultural commodities, are among the counties that will participate. Under the theme, “Unlocking Agribusiness Potential of Lake Victoria Trading Bloc”, the symposium seeks to explore financing models for value chains, review policies to boost commercial farming and open regional markets for farm produce.

The participants include agro based companies, logistic firms, banks, insurers, private equity funds, Universities, county officials and civil society organizations. Firms from India, China, Latin America and the US have been invited to showcase agribusiness innovation that suit local conditions.

The Lake Victoria Trading bloc is a market for more than 120 million people living in 16 Counties in Kenya and bordering parts of Tanzania, Uganda, Rwanda, Burundi, DRC and South Sudan. The majority of the regions’ population depends on natural resources and subsistence agriculture for livelihood. The bloc hopes to encourage the regions to specialize on their strong areas and open markets for each other’s produce. Through partnership with governments, it hopes to boost access to input and more resources for irrigation, climate change mitigation and other needs.

Uasin Gishu Chapter August 2014

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Elgeyo Marakwet County Plans To Focus On Value Addition Industries

The importance of industrialization and value addition on produce cannot be over-emphasized. Over the years there has been a demand for value addition to farm produce in order for the farm produce to attract better prices in markets. Since the county’s major economic activity is agricultural production, development of agro-based industries that would boost the residents’ income from farming is vital. The need for value addition is not only confined to the agricultural production but also in other sectors such as tourism and mining whose products would fetch more returns in improved forms.

 According to Ann Kibosia, the CEC, Trade, Tourism and Industry there is need to build the capacity of the people so as to focus on value addition industries. “With the devolved system of government and establishment of Counties, there is need to encourage people on value addition so as to increase returns and improve livelihoods,” said Kibosia.

Industrial investment in the county has been relatively low not withstanding the increased farm production from irrigated farming that has created huge potential for fruits and vegetable extraction industries in addition to opportunities of abattoir industries along the Valley offered by the successful livestock activities at the county. In striving to achieve value addition demands in the county, the Elgeyo Marakwet County plans to focus on; construction of potato processing plants, milk processing plants, integrated fruit processing plant, coffee milling plant, tea factory, an abattoir, fish processing industry, sub ginnery for cotton processing among other value addition industries.

Working Group validates the Illicit Trade Manual for Prosecutors

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A working Group comprised of a cross section of stakeholders drawn from all sectors is currently validating the Illicit Trade Manual for Prosecutors in Naivasha in a two day workshop. The meeting is being chaired by Hon. Abdulqadir Lorot, a Senior Principal Magistrate at the Judiciary and a member of the NCAJ technical working group. The Illicit Trade Manual for prosecutors has been as a result of recent alignments in the judiciary where with the adoption of Court Users Committees, justice is no longer the preserve of the judiciary but rather seen a chain issue. Representatives from government ministries and agencies involved in any way with the law and regulation are attending the meeting. KAM has been playing a coordinating role since the inception of the process as local manufacturers are severely affect by the issues of trade in Illicit goods and are usually the victims. 

This is the second validation meeting before the manual is presented to the Judiciary and published. 

Central Chapter August 2014

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Central Chapter

Kenya Power launches Sh55 million power upgrade project in Thika town

Kenyans will benefit from approximately 47% reduction in electricity prices in the next three years owing to increased generation from cheaper sources of power, Principal Secretary for Energy and Petroleum, Eng. Joseph Njoroge, has said.

Eng. Njoroge said generation projects for the 5,000 MW additional capacity in the medium term are well on course with electricity prices for domestic (ordinary) customers expected to come down from a current average of US dollars (USD) 19 cents to USD10 cents per unit.

He said large power consumers, who include manufacturers and industrialists, should anticipate approximately 40% reduction in power bills over the same period with unit prices expected to drop significantly from an average of USD15 to USD9.

  “Kenyans will enjoy a 47 percent decrease in power costs since the company is embarking on generating electricity from cheaper sources. Prices will significantly decrease once the additional 5,000 Megawatt project is completed,” said Njoroge.

Eng. Njoroge was speaking in Thika where he witnessed the launching of a Shs.55 million power upgrade project aimed at stabilizing power supply to the town’s Central Business District and its industrial customers.

“We understand too well that without adequate, competitively-priced and reliable electricity supply, the country’s Vision 2030 and all its aspirations will only remain in blueprint. The ongoing power projects is all about making it easier to do business in Kenya, it’s about creating opportunities and jobs for all Kenyans, ” he said.

Speaking at the event, Kenya Power Managing Director & CEO, Dr. Ben Chumo, said the Company is implementing a countrywide operation to upgrade the power network ahead of the expected additional generation capacity.

Dr. Chumo said the additional 5,000 MW will increase the country’s effective generation capacity by about 300% from the current 1,652 MW to 6,652 MW.

 The programme launch was heralded by change in the power supply lines and re-laying of the electricity poles.

The campaign, which involves master repair works like replacing old poles, old wires, rehabilitation of jumpers and realignment of high tension lines has been successful in 10 towns, including Nairobi, Mombasa and Machakos. 

Thika becomes the 11th town to benefit from the power upgrading initiative.

Nakuru Chapter August 2014

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Nakuru Chapter

Chapter holds forum on tertiary education

KAM Nakuru chapter recently held a stakeholders forum on tertiary education at the Rift Valley Sports Club. The forum themed “bridging the gap between school and the workplace,” was aimed at finding solutions to the perennial problem of skills gap in the Kenyan job market with a view to making Kenyan graduates job ready. The meeting was attended by representatives of key institutions of higher learning in Nakuru County, various employers and the County minister of education.

Speaking during the meeting KAM Nakuru Chapter chairman Rajen Shah lamented the skills mismatch in the Kenyan job market and stressed the need for concerted effort in addressing the problem.

 “There is a disconnect between what if offered in our institutions and the real market needs. Education institutions are not training adequately for the job market a situation that forces most employers to spend lots of time and resources retraining staff to meet workplace demands. There is also need to impart life skills in our young people to make them job ready,” he said.

Addressing participants during the meeting Kabarak University Vice Chancellor Prof. Jones Kaleli stressed the need for institutions to focus not only on imparting skills but also shaping the character as well as it has a bearing on an individual’s output. “We need to educate both the mind and the heart. As institutions we have a role and responsibility for the development of the whole person,” he said.

“Character formation governed by proper moral values is critical in life and should never be ignored in any educational institution. As it has been said in other circles, if you lose your wealth you lose nothing, if you lose your health you lose something, but when you lose your character you lose everything. Thus without training in character we shall be producing half-baked persons,” added Prof. Kaleli.

Speaking during the same forum the County minister of education Prof. Kitetu acknowledged that a majority of young people are not meeting the expectations of employers. She however added that though the problem was big it can be dealt with but will require concerted effort among all key players; the Government, private sector, academia and the community.

“There is a serious challenge that will require a review of the curriculum but we also have a problem of attitude among our young people and this will have to be fixed. Some of our young people have developed a beggar’s attitude and are not ready to work,” said prof Kitetu.

Kabarak University Deputy Vice Chancellor Prof. Kefa Rabah said that inbreeding in our institutions of higher learning should be discouraged as it limits growth of new ideas and attitudes in our institutions. “In MIT in the United States one cannot teach in the same institution unless they have taught outside for at least three years. We need to adopt the same in our institutions,” he said.

Participants were unanimous that that there is need to bridge the skills gap by having partnerships and linkages between the private sector and institutions so that the institutions can tailor what they teach to match current trends in the job market. It was also proposed that entrepreneurial skills should be entrenched in our curriculum and the Government to create an environment that will allow young entrepreneurs to grow. The mindset of the youth should also change to view vocational training positively.

Kabarak University DVC Prof. Kefa Rabah addressing participants during the forum at the Rift Valley Sports Club

It was concluded that though the problem was a national problem the counties also have a responsibility to address it at their level and not wait for solutions from elsewhere. A committee comprising of employers, academia and the County Government was formed to come up with short term and long term measures that could help mitigate the challenge at the county level.

Athi River chapter 2014

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Power Consumers expecting relief due to improved infrastructure

Many members operating from within Machakos and Kajiado have been complaining about the erratic power supply. KAM, in its continued engagement with Kenya Power, raised this issue and provided data showing the effects of the blackouts and surges to the companies, in terms of time lost, destruction done to machines and cost of fuel used to power the plants during the downtime, which we had calculated to run into hundreds of millions in Kenya Shillings. This feedback was well received by Kenya Power and helped in speeding up the response taken, which was done under the programme dubbed “Boresha Stima”.

The exercise was undertaken on the week of 19th August and works were expected to end on Sunday the 24th August 2014, marked by a PR event at the Portland Village at Athi River. The event was graced by the Kenya Power MD, Dr Ben Chumo, and the Energy PS, Eng. Joseph Njoroge, among other dignitaries. Many KAM members were also in attendance.

During the upgrading exercise, expected to cost the company Kshs 159 million, the existing cables were replaced by heavier and new cables, capable of carrying a more power load to the industries and as such will guarantee less downtime, as the size of the wire was one of the problems that was causing blackouts due to their overload. The exercise was envisioned to upgrade the whole of Athi River, Kitengela, Namanga, Machakos and Mlolongo.

In his speech, Dr Chumo outlined plans to connect a million more customers to the national grid this financial year, a move that would increase their customer base by 36%. He added that Kenya Power would allocate adequate resources to increase electricity connectivity to create demand for the 5000MW additional capacity envisioned by the Government. On this end, he said that Kenya Power was working with financial institutions to provide loans to potential customers to enable them pay for the new connections.

Eng. Njoroge, during his speech, said that Kenyans will benefit from approximately 47% reduction in electricity prices in the next three years owing to increased generation from cheaper sources of power.

Eng. Njoroge said generation projects for the 5,000 MW additional capacity in the medium term are well on course with electricity prices for domestic (ordinary) customers expected to come down from a current average of US dollars (USD) 19 cents to USD10 cents per unit.

He said large power consumers, who include manufacturers and industrialists, should anticipate approximately 40% reduction in power bills over the same period with unit prices expected to drop significantly from an average of USD15 to USD9.

“We understand too well that without adequate, competitively-priced and reliable electricity supply, the country’s Vision 2030 and all its aspirations will only remain in blueprint. The ongoing power projects is all about making it easier to do business in Kenya, it’s about creating opportunities and jobs for all Kenyans, ” he said.

Dr. Chumo said the additional 5,000 MW will increase the country’s effective generation capacity by about 300% from the current 1,652 MW to 6,652 MW.

 The dignitaries afterwards visited the Savanna Cement factory for a general tour of the facility.

Coast Chapter | August 2014

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Coast Chapter

Business Community decries high cost of doing business in Mombasa County

The business community in Mombasa is up in arms about the high cost of doing business following the recent revocation of the waiver on entry fee by the county Government of Mombasa. Following this development the business community sought audience with the County Government on 8th August 2014 to have the crisis resolved.

The team from the county Government comprised the CEC for Trade, Energy and Industrialization Mr. Mohamed Abdi and the County Secretary Hamisi Mwaguya. The business community was represented by members from Krystal line Salt, Coca cola ,Milly Glass, Polucon Services, Mombasa Maize millers, Bamburi Cement, KNCCI representative and  a KATO representative.

The question of legality of the entry fee was raised by members who sought to know why Mombasa is charging entry fee which they had disputed last year, when it was introduced in the Finance Act 2013.

Concern was also raised over cess fees being charged by the county for non agricultural products as cess is for agricultural products and is charged at the source. Members cited the case of Bamburi cement that pays cess for clinker at Kilifi and when it reaches Mombasa they are still required to pay the same, which is double taxation.

The entry fee was specifically meant for Kongowea market in the defunct local authority, but the County Government put it in the bill thus creating barriers at Shanzu and Miritini.

Mr. Abdi explained that the waiver was revoked because proper procedure was not followed in issuing the waiver. He however was quick to point out that the manner in which it was revoked through a newspaper advert before consulting with the business community was not proper.

Speaking in the same meeting the Coast Chapter Chairman, Munir Thabit said that most businesses operate on orders that they receive to manufacture and such a directive puts businesses in a lot of anxiety.

He proposed that the revocation of waiver is nullified, a working committee be formed between County Government and the private sector to come up with proposals on how levies are to be done but not charging on a daily basis.

Responding to the proposal Mr. Abdi indicated that he was not in a position to make a decision on nullification of the revocation of the waiver and had to consult with the Finance Executive. He however agreed that having a working committee comprising of private sector and County Government would be a better way going forward.

Members present from different BMOs were tasked to send in five names per BMO to the County to form part of the working committee.

Mr. Abdi agreed to get back to the business community before close of the day after discussing with the Finance Executive on the request to have nullification of the revocation order. He further indicated that since the county is in the process of coming up with the Finance Bill 2014 the working committee will be part of the team working on the document.   

Mombasa Business Coalition Launches County Business Agenda

The Mombasa Business Coalition that is made up of Kenya Association of Manufacturers, Kenya Transport Association, The Kenya National Chamber of Commerce & Industry, Mombasa County Community Based Association, Kenya Association of Tour Operators, Mombasa and Coast Tourist Association, East Africa Tea Trade Association, Kenya Association of Hotel Keepers and Caterers, Container Freight Station Association, KIFWA, Ujamaa and PERAK launched the County Business Agenda booklet.

The publication that highlights the priority business issues that need to be addressed to ensure a conducive business environment for the county was published after various meetings were held between the business coalition of Mombasa and various County Executives of Mombasa County Government in Mombasa County.

The issues deliberated upon were divided into six thematic areas:

1.      Infrastructure & land

2.      Environment and Water

3.      Health

4.      Education

5.      Security

6.      Trade & business levies.

It is in this regard, that members of the coalition met with Mr. Mohamed Abdi the County Executive for Trade and Industrialization to officially hand over the publication to the County.

Speaking during the launch Millicent Odhiambo of Mombasa and Coast Tourist Association said: “This document will be like a Bible to be used as a reference point by the county to ensure implementation of the recommendations by the Business community.”

In the spirit of Public Private Dialogue, it was mentioned that the County needs to consult with the business community when a new directive or change is coming up in order to foster business relations and to ensure harmony in the county. A case in point is the notice put on the Star Newspaper of 8th August 2014, revoking the waiver on CESS charges for manufacturers and transporters. The Business Community lamented that the CESS charge will only increase the cost of doing business.

Speaking during the handing over, the Mombasa Business Coalition Chair Ms Monika Solanki, reiterated that the document was a living document that will be reviewed from time to time.

“This publication is a document that needs to be kept alive by having it reviewed, see what has been achieved, what has not been achieved and why, recommend way forward as well as have timelines on achievement of the pending issues,” she said.

“We look forward to engage with the County to review the publication together once they have gone through it with their counterparts,” she added.

County Executive for Trade Mohamed Abdi acknowledged the good work initiated by the business community. “This is a great milestone In the process of Public Private Dialogue being documented,” he said.

He further mentioned that the published document will be useful to them as the county government as they will use it as a reference point in order to deliver to the business community who are key taxpayers. He also called on the private sector to drive the process and continue engaging.

The business community was urged to be the watchdog and ensure that clear timelines are set by the County Government to achieve all the highlighted issues.

Members of the fourth Estate present in the meeting were also urged to make the County Agenda their Number one priority and report on positive issues happening in the County and not just the negative.

Concerns were also raised about the congestion at Kibarani and what plans the county has on creating an alternative exit and entry point so as not to entirely depend on the causeway. It was further mentioned that trucks using the causeway were no longer following the directive to keep left and this needs to be enforced.

Responding to the concerns Mr. Mohamed said plans to explore the option of water transport as an alternative are at an advanced stage. He also indicated that there are plans to come up with a 2nd Nyali Bridge though this may take time since it’s a National Government project.  

In his closing remarks Mr. Mohamed said the County Government is in the process of coming up with a Finance Bill for 2014 and urged the business community to participate fully, by giving their proposals when they get invitation to attend public forums.

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