Over the last decade, Kenya's manufacturing sector has reduced from 10 per cent of the Gross Domestic Product to 7 per cent.
With the shrinkage, many Kenyans have lost jobs. After independence, the government set up industries to spur the economy and improve Kenyan's livelihoods.
Today, most government factories are struggling. Factories such as Kenya Meat Commission, Rift Valley Textile Mills, Mumias, Nzoia Sugar, Sony, Muhoroni, Pan Paper and others have collapsed or are underperforming.
Majority were set up to promote manufacturing. They have served their purpose and a new beginning should be chart. The Ministry of Investments, Trade and Industry wants to reverse this trend and take it back to 10 per cent and hopefully 15 per cent by 2025.
Globally, manufacturing is done by the private sector, not the government. The government is a referee. As a government, we have tried to play both roles, but it has come to end. We have looked at our manufacturing environment and identified a number of challenges which should be addressed.
They include high cost of doing business, high electricity costs, large amounts of imported products (which can be produced locally), lack of finance for people willing to venture into manufacturing and poor prices for products in the market.
As a ministry, we are enacting the Industrialisation Bill and putting in place a new policy through Parliament. We are on course in reducing cost of electricity for manufacturing to $10 cents per KWH.
The cost of entry into manufacturing is high and it takes long for one to re-coop their investments. Manufacturing has been reserved for the 'big boys' and the government will support 'small start ups' by collaborating with the 47 counties by providing land and financing of up to Sh250 million per county.
Together, we will construct manufacturing facilities with electricity, water, warehousing, transport, marketing (including online portal for selling products).
This will spur the agriculture sector by having readily available market for products in industries for avocado oil, pyrethrum, groundnuts processing, honey, sim sim maize milling or even barbed wire, nails, chain link etc.
Statistics show manufacturing can employ up to 10 million people directly or indirectly. Generally, we want Kenyans to venture into manufacturing through the concept dubbed 'Viwanda Mashinani'.
The project will see giving out of machine grants to the youth to buy manufacturing equipment over the next five years. This will make it easier for Kenyans, especially middle income earners to venture into manufacturing. To support manufacturing through purchase of machinery, Equity Bank will provide loans of up to Sh250 billion. We are also pushing Kenya's agenda to sell more products into the EAC and African markets.
Kenya will soon feel the progress in this sector. Finally, I encourage Kenyans to buy products made in Kenya and venture into manufacturing, no matter how small.
-The writer is the PS for Industry.
