This archive report was first published on 3 July 2019.
On July 3, 2019, a report commissioned by SYSPRO and Strathmore University highlighted the importance of tax incentives and reduced production costs in enhancing competitiveness in Kenya's manufacturing sector.
The study found that upgrading current technologies and increasing production efficiency could also boost competitiveness for manufacturers in the country.
According to Pravir Rai, SYSPRO's Head of Channel, keeping Information Technology costs low is crucial for businesses, particularly Small Medium Enterprises.
“A lot of software solutions in the market are unaffordable because they come with inbuilt capabilities that a business may not necessarily need at a given time,” Rai said.
More than half of the manufacturers surveyed felt that the government could still do more to make the sector competitive and attractive to potential investors.
They identified the development of infrastructure, provision of exemptions, grants, and subsidies, as well as purchasing guarantees from the government, as key initiatives that would make local manufacturing an attractive business venture.
Support for apprenticeship, graduate internships, and technical courses in universities were also seen as major initiatives that would boost the sector.
However, over 50 percent of the respondents felt that Kenya's manufacturing sector would have difficulty competing with counterparts in other developed countries that have advanced education and training systems.
According to data from the Kenya Association of Manufacturers (KAM), the sector's share of GDP has remained stagnant, contributing an average of 10 percent from 1964-73 and rising marginally to 13.6 percent from 1990-2007.
Despite this, there is renewed interest in the sector through the Big 4 Agenda, a national government development plan that seeks to increase the GDP contribution of the sector to 15 percent by 2022.
