President William Ruto has challenged investors in the manufacturing sector to increase investments in value addition in order for the country to achieve 20pc contribution to the economy within a decade.
While addressing stakeholders during the Kenya Manufacturing 20 by 30 Initiative High Level Meeting held Wednesday in Nairobi, President Ruto said the Government will create a conducive environment for the manufacturing sector to flourish.
“You have persuaded me that it is possible for us to create one million jobs from the manufacturing sector, you have persuaded me that it is possible for us to move the contribution of our GDP from our manufacturing from 7pc to 20pc in eight years,” said President Ruto.
The summit was held amidst concerns on the declining contribution of the sector to the GDP, which has decreased from 9.3pc in 2016 to 7.2pc in 2021according to official statistics, a factor the President blames on corruption.
The president said there are currently many Kenya Revenue Authority fake stamps being used in the market leading to losses in revenue for manufacturers and the government.
“Part of why our contribution of manufacturing to GDP in terms of revenue is low is that many people are pocketing money meant for taxes. We are going to reform that space,” said the President.
He said investment in value addition will ensure increase in earnings for farmers such as those in tea, where 95pc of Kenya’s tea is exported in raw form.
“There are huge opportunities in value addition. We have the biggest competitive advantage in the tea sector. By processing our tea, we can increase revenues through export. Additionally, we can increase our revenues and the contribution of leather to our GDP from the current 15 billion to 75 billion Kshs annually,” explained His Excellency the President.
Kenya Association of Manufacturers (KAM) Chairman Rajan Shah said with the manufacturing sector estimated to increase its contribution to the GDP by 1.6% annually, this will translate to a rise in jobs created by manufacturing from the current 338,000 to nearly 1 million.
“Herein lies the golden opportunity for the country to grow SMEs to the next level. Your commitment towards growing this sector of the economy is indeed timely and promises to unlock the potential for small businesses if implemented in the short and medium term,” said Shah.
As a result employee compensation in manufacturing is projected to jump from Ksh 232 billion to Ksh 644 billion and increase real value-added growth from Ksh 876 billion to Ksh 5.2 trillion.
The post President Ruto taps agro-processing for manufacturing growth appeared first on KBC.
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