Raila promises tax cuts to lower energy costs
ODM leader Raila Odinga with her running mate Martha Karua.
Azimio la Umoja One Kenya presidential candidate Raila Odinga has promised to revive the dwindling fortunes of the manufacturing through a raft of reforms to eliminate disincentives that have stifled the growth of the sector, shunting job creation.
Mr Odinga, in his manifesto that was released yesterday ahead of the August 9 General Election, said manufacturing was ripe for further development, noting that his government would improve taxation, finance and other policies and regulations to support the sector if he is elected as President on his fifth attempt.
The Azimio candidate’s promises come at a time the manufacturing sector’s share of gross domestic product (GDP) has declined from 10.91 per cent in 2013 to 7.5 per cent in 2021, negatively affecting industrialisation.
The decline has negated gains the sector had made from contributing to about 10 per cent of the GDP in 1964, growing to a high of 13.6 per cent in 2007, driven by the high cost of power, and limited access to affordable financing, which has stifled investment into the sector.
Mr Odinga has promised to develop a new manufacturing policy to promote the development of primary, secondary and value-addition sectors, implement direct interventions such as government investment, tax reforms, credit and preferential treatment of local industries to nurture their growth.
Earmarked Sh1 billion
The sector is one of the most underfunded and was allocated just Sh10 billion in the financial year 2022/23 that commences next month. The National Treasury earmarked Sh1 billion out of the allocation to the credit-guarantee scheme, Sh2.6 billion to the Dongo Kundu Special Economic Zone, and Sh3 billion for supporting access to finance and business recovery by manufacturers.
To hit his target of growing the manufacturing sector to contribute at least 30 per cent of Kenya’s GDP, Mr Odinga has promised to lower the cost of energy by lowering taxes on fuel and gas as well as reducing the cost of electricity to lower the high energy bills incurred by manufacturers.
“The Azimio commitment is to develop a new manufacturing policy and strategy to guide, encourage, support, promote, and coordinate the sector,” says the manifesto.
Mr Odinga has prioritised integrating the steel industry to promote local manufacture of steel, noting that there is a huge market for the product locally and across the region, and manufacture of machines and components for use by other sectors such as automobile spare parts, motorcycles, agricultural implements and tools and equipment.
He has also promised to boost marine craft, value addition in the textiles and apparels sector, chemicals, petrochemicals, food and beverages as well as the leather industry, to increase its competitiveness.
The former Prime Minister says he will boost the local production capacity of the pharmaceutical industry that is dominated by imports, arguing that the country has potential to manufacture the products to both meet local demand and for export.
“Local production will also create employment and lower the cost of healthcare products,” said the manifesto.
Meet the demand of glass
Mr Odinga said his government would establish a sustainable glass manufacturing industry by enhancing local manufacture of the product to meet the demand of glass, which grows 4 per cent annually.
Kenya imports 98 per cent of its glass, mainly from Egypt, for packaging of products such as beer, water and juice even as most of the raw materials needed for its manufacture are locally available.
He has also promised to support local manufacture of paper to meet the growing demand, with majority of the product consumed locally being imported, following the collapse of Pan Paper Mill in Webuye.
Mr Odinga said he would support growth of the capacity of small and medium-sized enterprises (SMEs) to locally manufacture furniture for both domestic, commercial and institutional use, creating thousands of new jobs.
