This archive report was first published on 18 October 2019.
Kenya's Micro, Small, and Medium Enterprises (MSMEs) play a vital role in the country's economy, employing over 80 percent of the working population and contributing 33.8 percent of the national output.
Published on October 18, 2019, a report by the International Trade Centre (ITC) highlights the importance of making MSMEs more competitive to achieve development objectives.
The report, Promoting SME competitiveness in Kenya, notes that targeted solutions can help address shortcomings in specific areas of competitiveness, enabling SMEs to access more local, regional, and international markets.
According to the survey, two-thirds of interviewed firms that needed funding successfully obtained a loan, but half of the participants lacked access to financial institutions, negatively affecting their operations.
Policy and business reforms are crucial in boosting sectoral competitiveness of MSMEs. Policies must be sensitive to sector-specific conditions, strengths, and weaknesses, and promote evidence-based decision-making by utilizing information, data, and analysis of available opportunities and constraints faced by SMEs.
For instance, the Kenyan agri-food sector, which includes agriculture, livestock, forestry, and fishing, contributed 35 percent of GDP in 2017. Cost-friendly and efficient logistics services would make agri-food MSMEs more competitive by ensuring efficient delivery and better inventories management.
Similarly, the non-food manufacturing sector, which generated 18 percent of employment in Kenya in 2018, with MSMEs constituting 67 percent of enterprises within the sector, requires favourable intellectual property laws and innovation to improve product and services offering.
