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By CONSTANT MUNDA
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Builders recently praised the attention paid to the sector as a good start after "years of neglect". However, they quickly add that much remains to be done to realize the huge potential of the sector.
The manufacturing sector is at the heart of President Uhuru Kenyatta's ambitious Four Great Program, with food security, affordable housing and universality. The sector, whose contribution to national wealth has stagnated at around 10 percent for more than two decades but has begun to decline over the past two years, is seen as a change of game to reverse rising unemployment levels among young people About 800,000 new decent jobs are expected to be created in the troubled sector by 2022, according to the ambitious plan, 500,000 more than the 300,300 jobs registered last year, according to official statistics in the Economic Survey of 2018.
The plan, under the manufacturing pillar, is to create 1,000 additional small and medium-sized factories (SMEs) in targeted sub-sectors. The modernization and development of factories in subsectors such as agri-food, leather, textiles and fish processing have been prioritized in the plan for the sector's contribution to gross domestic product (GDP) at 15 percent of 8.4 percent in 2017.
The manufacturing sector will need to add $ 2 billion to $ 3 billion (Sh201.52 to Sh302.28 billion) each year to GDP to achieve the 15% share of the Projected National Wealth, Henry Rotich, Secretary of the Treasury Cabinet, states in the Budget
: "This will be done by creating parks and textile industries in various parts of the country, such as the blue economy. and the manufacture of building materials, and the recovery of the auto industry, which will make new vehicles more affordable, "says Mr. Rotich.
investors who are willing to invest in specific areas providing tailored incentives. "
Some of the targeted incentives extended to the manufacturing sector during this fiscal year, which are consistent with the third Vision 2030s 2018-22 Medium Term Plan, include lower electricity costs, higher tariffs on certain imports. , remission of duties and exemption from value-added tax on the main raw materials
Manufacturers operating in certain special economic zones (SEZ) will benefit from a reduction of Sh16.12) per kilowatt hour (kWh) at $ 0.09 (Sh9.07), which upgrades them with South Africa, Africa's largest advanced economy.
This adds up to the 30 percent of electricity costs that they will now claim from corporate tax in the proposed amendments to the Income Tax Act.
"This will slightly reduce the cost of the tax." 39, electricity, but the cost could be higher As regional competitors such as South Africa, Egypt and Ethiopia, the Kenya Manufacturers Association (KAM), the industry lobby said by e-mail. email. "However, the imposition of VAT on petroleum products will have a negative impact on the cost of electricity."
Manufacturers cited electricity prices higher than regional competitors' prices as one of the factors of high production cost Available statistics show that the cost of electricity at the Kenya, with an average cost of 0.16 dollars (16.16 shillings) per kWh, is higher than in Ethiopia, and more and more Kenya competitor for the big investors, which has reduced the rates of the Electricity at $ 0.06 (Sh6.05) on average per unit. Uganda and Tanzania charge an average of $ 0.11 (Sh11.84) per unit, while in South Africa, customs duties are $ 0.09 (Sh = 9.07). per kWh.
million. Rotich also sought to amortize the African Community bloc's domestic bloc mills from cheaper imports of paper and cardboard, textiles and footwear, wood products and vegetable oils. increasing duties from 25 to 35 percent
Miticides and the badembly of clean energy stoves and computers were also exempted from the standard 16% VAT.
"The manufacturing sector has a very long and structured relationship with the government, and in this budget there has been a bit of consideration, particularly with regard to power, labor, additional protection for manufacturers, and 39; cheaper access to materials, "said Betty Maina, senior secretary of industry
. progress in this budget, but there will be more. Let's take stock of what we have won.
However, the sector lost from time to time to put an end to the railway development levy, taxed at 1.5% of the value of imports and at 2.5%.
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