Initiative to aid industrial revolution

The original Kenyan dream was to tackle poverty, illiteracy and disease.

The country has since made significant achievements to be among the biggest economies in Africa with its national wealth reaching an all-time high of Sh7.75 trillion last year.

Over the past decade, the economy has, on average, grown at about six percent annually, making it among the fastest-growing on the continent.

Improvements in infrastructure, such as the standard gauge railway (SGR), manufacturing and ICT, position Kenya on a take-off stage with the more precise target of the ‘Big Four’ agenda.

One of the new initiatives to spur entrepreneurship is the local content strategy of Access to Government Procurement Opportunity (Agpo).

The initiative targets youth, women and people living with disabilities and aims to spur entrepreneurship to contribute to the government’s job creation agenda and expand the tax base and national income.

ENTREPRENEURSHIP

The transformative initiative was launched by President Uhuru Kenyatta in 2012 with a view to giving an opportunity to this group of a majority of Kenyans to transform their lives and become the economic foundation of the nation.

The 30 percent of total government procurement budget that is reserved for this group is a significant investment financing for economic as well as industrial transformation.

Agpo presents an opportunity for millions of Kenyans to fully utilise their potential.

It forms part of the government’s aim to inculcate an entrepreneurship culture, which economic history shows has become an economic foundation for emerging economies such as Brics (Brazil, Russia, India, China and South Africa) and the Asian Tigers.

The model of growing young entrepreneurs works to create sustainable inclusive economic growth and development.

SMEs

When they take up such initiatives in large numbers, a country’s quest for industrial revolution witnessed in the high-income and high middle-income economies that Kenya aspires to be will be realised.

The ‘Big Four’ means every household should be part of the big Kenyan dream, work hard to realise food security, improved healthcare and housing and venture into value addition with a view to creating sustainable livelihoods.

Agpo presents that opportunity. One of the missing links to our economic transformation is the sustainability and expansion of effective small- and medium-sized enterprises (SMEs).

The enactment of the Companies Act 2015 allows Kenyans to easily incorporate a business, a pre-requisite for Agpo.

The enterprise development economic transformation model of newly industrialised economies expanded production bases and increased market reach, creating trade surpluses by increasing exports.

TRADE

Companies that venture into export business expand job creation opportunities and will greatly contribute to the annual target of 1.3 million high-value jobs in the manufacturing sector.

When a country exports more, it earns high foreign exchange, enabling a stable macroeconomic environment. The import bill for acquisition of new technologies would be easily met without reliance on debt financing.

Kenya’s Integrated Exports Development and Promotion Strategy postulates a need to expand our exports annually by an average of 25 percent to address a growing trade deficit of Sh1.1 trillion as of last year that continues to deplete the much-needed forex earnings.

The ‘Big Four’ postulate a growth of the manufacturing sector from 8.4 percent of gross domestic product (GDP) to 15 percent, meaning increasing the sector’s output to Sh2.235 trillion.

INVESTORS

Such an expanded production base would require increased contribution by the Agpo target group, taking advantage of duty-free markets, in part, tripartite free trade area, the Africa Continental Free Trade Area and the United States’ African Growth Opportunity Act (Agoa).

It cannot only be left to the few large exporting enterprises. The Agpo model presents opportunities and lessons on building sustainable financing mechanisms that are affordable and cost-free with VAT contribution value for enhanced national revenue.

It gives us an opportunity to increase a pool of local investors in the ‘Big Four’ and create a sustainable path for economic transformation.

County- to country-based trade fairs and expos would be the platform in the coming year to create awareness and undertake capacity building for our young local investors to venture into export business with a view to enhancing Kenya’s balance of trade through increased export earnings.

Mr Biwott is CEO Export Promotion Council. [email protected]