After assuming office for his second term, President Uhuru Kenyatta unveiled what he termed his ‘Big Four’ agenda, listing four key pillars – manufacturing, universal healthcare, affordable housing and food security as his focus for economic development. While placing heavy emphasis on the expansion of the manufacturing sector, the Head of State said that his administration would focus on boosting four manufacturing sub-sectors; the Blue Economy, Agro-Processing, Leather and Textiles. Corporate Watch Magazine’s Ker Mogallo chats with Kenya Association of Manufacturers Chief Executive Phyllis Wakiaga on the body’s role in the push of the impressive plan even as it seeks to deliver global competitiveness.
The Kenya Association of Manufacturers, which is the representative organization for manufacturing value-add industries in Kenya, is set to work with the Kenyan government to deliver its ambitious ‘Big Four’ plan that aims to shift the country’s mindset from politics to economic growth. Speaking to Corporate Watch Magazine in an exclusive interview at KAM house in Westlands Nairobi, Kenya Association of Manufacturers Chief Executive Phyllis Wakiaga noted that the association had unanimously agreed to back the ‘big four’ plan as the priorities under manufacturing are aligned to the umbrella body’s vision for the sector.
‘As KAM, because of representing the manufacturing sector we saw a lot of synergy between the conversations we had been having and what was captured in the big four agenda. We spent a good part of last year trying to highlight to the different political players on some of the priorities for the manufacturing sector. We developed a 10-point agenda with a vision to the sector contributing 15% of the GDP,’ she said.
She further noted that the big four is business unusual for the manufacturing sector and a game changer in economic development.
‘The manufacturing sector has been growing at a rate of between 3 to 5% per year with the manufacturing sector contributing roughly between 8 and 12 percent to the GDP. What the big four is saying is that a 15% growth in the manufacturing sector moves the sector from a USD 6.5 billion to a USD 18 billion sector in the next five years,’ said Wakiaga.
She added that the projection basically means the sector will grow by about 33 to 36% per annum; a game changer in the manufacturing industry.
The missing link…
According to Mrs. Wakiaga, the Kenya Association of Manufacturers (KAM) in pursuit of its core mandate of policy advocacy will provide an essential link for co-operation, dialogue and understanding with the Government by representing the views and concerns of its members to bolster efforts in the expedition of the ‘big four’
‘We are a business membership organization and as such our role in delivering the ‘big four’ will be to coordinate our members to align with the opportunities arising from the government initiative. Already, we have had sector deep dives and are in continuous dialogue with government on opportunities and enabling environment that the sector requires to effectively grow,’ Mrs. Wakiaga noted.
On this note, the association has identified the constraints in the business environment and created back and forth linkages between the different sectors and government in order to point potential investors in the right direction.
With its mission being to promote competitive and sustainable local manufacturing, the Kenya Association of Manufacturers strives to push for policies that ensure members produce at the most competitive prices locally to ensure availability of market for the products.
‘Over the years, we have presented several appeals and recommendations to the government in an effort to bring down the cost of production, very recently at the Presidential roundtable targeting the manufacturing sector, we presented four key issues; competitiveness, illicit trade, markets and a predictable policy environment,’ said Mrs. Wakiaga.
She noted that competitiveness is driven by a number of factors that include the cost of power locally, taxes and levies on products, the cost of local logistics and distribution in the value chain, which ought to be addressed. Illicit trade, she noted is a big hindrance to manufacturing because 40% of the market is flooded with illicit goods. So far however, a crackdown and a series of raids on illicit goods are catching on as government heightens the fight on illicit goods.
“To be able to grow manufacturing, you need a market to sell your products. We looked at the domestic market, the regional market and the international market and are working in collaboration with government to address the barriers to these markets and creating bilateral agreements to international markets,” said the KAM CEO.
She added that currently 40% of Kenya’s imports come from China and India noting that because the two countries are already successfully doing business with Kenya, there should be a mutual agreement for them to give Kenya access to their markets for its products.
Established in 1959 as a private sector body, Kenya Association of Manufacturers) KAM has evolved into a dynamic, vibrant, credible and respected business association uniting industrialists and offering a common voice for businesses. KAM promotes trade and investment, upholds standards, encourages the formulation, enactment and administration of sound policies that facilitate a competitive business environment and reduce the cost of doing business.
Commenting on a predictable policy environment, the KAM Chief Executive noted with concern that there is a lot of back and forth in policy making that is creating a lot of problems for the manufacturing industry. She recommended that the policies at the national and county levels should be harmonized to avoid duplication by regulating authorities. She says these will go a long way in ensuring sustainability in business.
“We are looking forward to the budget in June because there are a number of proposals we have made around the common external tariff and the domestic taxes both direct and indirect taxes that could make the sector more competitive,” she said.
Employment of youth…
Terming employment as the end game of the big four agenda, the association is working with technical colleges to link up graduates with internship openings as apprentices for three months leading to employments.
“We have been running this program for the last one year and we have seen a lot of success with most of the people we place under the industry getting jobs,” noted Wakiaga.
The association is also working to link the industry with academia to ensure the gaps in the industry are successfully filled. Currently, KAM is working with the University of Nairobi, The university of Nottingham as well as a number of other universities that offer pharmacy and chemistry courses to align their curriculum to the industry needs to ensure relevance.
“We are also doing a lot of work with SMEs because we are not going to create employment through employments alone. We need to nurture entrepreneurs and assist them with other linkages such as financial linkages as an alternative avenue to getting the youth into manufacturing,” Wakiaga said.
With manufacturing taking a front seat in the earlier launched vision 2030, and the coming in of the big four agenda, the Kenya Association of Manufacturers is optimistic that it is up to the task and will play a big role in the delivery of the ambitious plan.
“The big four apart from manufacturing focuses on three other sectors that have very close linkages with the manufacturing sector. One of them is affordable housing, in the construction of the affordable homes; there will be a lot of products utilized that could emanate from our manufacturing sectors,” noted Wakiaga.
She further adds that being an Agricultural country; one of our biggest sectors is the food and beverage sector with 40% of KAM members in the sector. She said this is a big linkage with food security adding that because of the pharmaceuticals and medical supplies manufacturing sector, KAM would still play a role in enhancing the health agenda.
“For us, the big four agenda is something we have been tracking very closely since the President made the announcement to see what game changers we need to be able to feed in to the big four. The big four is ambitious, for the manufacturing sector alone it envisions a times ten growth a year. It’s an ambitious project but we have looked at countries that have grown their manufacturing sectors such as Singapore, Egypt among others. With targeted interventions, it is possible,” she concludes.
