The National Assembly Committee on Trade, Industry and Cooperatives has called on the government to provide fiscal incentives that will help support and attract investors to the country.
Committee members reiterated that favourable incentives are needed to spur investments and ensure that Kenya maintains its competitive edge amidst concerns over the closure of businesses due to the high cost of production.
According to the Committee chair James Gakuya, Kenya has in the past recorded loss of business to neighbouring countries over concerns of high power tariffs and labor.
Gakuya said neighbouring countries of Uganda, Tanzania and Ethiopia have reduced considerably their industrial power tariffs compared to the high tariffs charged locally.
Gakuya said the country needs to change tact by introducing competitive incentives that will protect local industries and attract foreign investors to accelerate the local manufacturing sector.
He added that the move would be key in easing and reducing the country’s import bill, increasing local revenues and creating thousands of jobs for deserving youths.
Speaking in Naivasha during an engagement with officials from the State Department for Industrialisation, Gakuya decried the fact that Kenya’s manufacturing stake has dwindled due to an unfavourable business environment.
“Industrial areas across the country that recorded booming business and positioned Kenya as an industrial regional giant have been on the decline as more industries close shop”, regretted Gakuya.
To reverse this trend, Gakuya called for revamped funding to the trade and industry docket to spearhead reforms needed to attract and spur investments and position Kenya as the destination of choice.
In addition, he called for the repositioning of key agencies such as the Kenya Numerical Machining Complex and the Kenya Industrial Research Development Institute [KIRDI] to spearhead local manufacturing sectors.
For instance, Gakuya said Numerical Machining Complex which was created to spearhead car manufacturing should partner with the private sector and venture into the production of car spare parts that continue to record high demand.
He termed KIRDI as a key agency in championing the revival and growth of Small, Micro and Medium Enterprises to achieve industrial-level capacities needed to position Kenya as an industrial giant in the region.
Industrialization PS Dr Juma Mukhwana said the government has proposed a review of several laws and policy frameworks needed to reinvigorate local manufacturing sectors.
Dr Mukhwana regretted that Kenya’s global index share of manufacturing stands at a paltry three per cent with the country spending billions of shillings every year to import goods and machinery.
To change tact, the PS said the country has allocated funds to five special economic zones including Naivasha, Dongo Kundu, Eldoret, Sagana and Thika where investors will enjoy lower power tariffs and other incentives.
The government, he said, seeks to leverage these zones to attract heavy manufacturing industries that will put Kenya on a competitive edge both in the region and on an international level.
Dr Mukhwana said the government had adopted the ‘Buy Kenya, Build Kenya’ policy that mandates Ministries, Departments and Agencies to purchase locally made products.
The PS at the same time called for more funding to enable key state agencies central to the industrialization agenda to adopt modern technologies, and machinery as well as align their courses to the market skills demand.
By Erastus Gichohi
