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!