President Ruto sets ambitious 22 percent annual growth rate for manufacturing

President William Ruto's government has set an ambitious 22 per cent compounded annual growth rate for the manufacturing sector as it seeks to have the sector contribute to 20 per cent of GDP by 2030.

If achieved, the ambitious target will see the manufacturing sector’s nominal GDP stand at Ksh.5.2 trillion compared to the contribution of merely Ksh.867.4 billion at the end of 2021.

President Ruto has tipped value addition in key sectors such as dairy, tea, skins & hides to deliver higher returns from the sector even as he calls for increased engagement between the private sector and government to achieve the fete.

“This administration will work with you, every step of the way until we redeem all of the opportunities that are available for us as a country,” President Ruto said on Wednesday.

“All that stands between us and a 20 per cent contribution from manufacturing and a million jobs is continuous engagement, consultation, working together and realizing that nobody has a monopoly of good ideas.”

On their part, manufacturers represented have tipped strategies including building global competitiveness, exports, industrializing agriculture and SME development to deliver the goods.

The industry players who were represented under the Kenya Association of Manufacturers (KAM) lobby nevertheless sighted a number of setbacks to growth including an unpredictable tax and regulatory environment and bureaucracies represented by multiple layers of licenses.

In addition to contributing to 20 per cent of GDP by 2030, the sector is backing itself to raise the sector’s contribution to tax revenues from the current estimate of 30 per cent.

“We shall achieve one million extra jobs in the sector. Empirical evidence has shown that for every one manufacturing job, it creates three other jobs in ancillary sectors,” said KAM Chairperson Rajan Shah.

Despite being part of the government’s four-pronged agenda between 2017 and this year, the contribution of the manufacturing sector waned to just 7.2 per cent of GDP from 8.7 per cent at the end of 2017.

Kenya Kwanza’s manufacturing agenda nevertheless closely mirrors that of the previous Jubilee administration which sort to raise the sector’s contribution to GDP to 15 per cent and creating one million jobs.

Under the Big 4 Agenda, the government of the day saw opportunities in agro-processing, heavy industries such as oil & gas; textile, apparel and leather, ICT and services.

“We are not growing at the same pace as other parts of the economy and this is what as a manufacturing fraternity we need to turn around and go beyond previous targets,” added Mr. Shah.