Inside Politics

Industrialists ask State to avoid policies that raise cost of doing business

Friday, July 2nd, 2021 00:00 |
Beer. Photo/File

Kenya Association of Manufacturers (KAM) wants the government to institute measures to bolster economic recovery and drive the resilience and sustainability of the local manufacturing sector.

The industry lobby group said this was the only way to counter the negative impact wrought on the economy by Covid-19 pandemic which has led to an increase in the cost of producing goods that consumers are having to bear.

“The government needs to avoid any policy interventions that increase the cost of doing business, develop domestic value chains and address demand and liquidity challenges,”  KAM Chairman Mucai Kunyiha said.

He said for the last one year, Kenyans have shouldered high consumer prices partly because of a combination of factors including high sea freight charges, weakening of the shilling against major international currencies and prices of crude oil.

In their survey titled: “Impact of the Covid-19 Pandemic on the Manufacturing Sector: One Year On” released yesterday, KAM said manufacturers continue to operate in a constrained business environment, occasioned by the Covid-19 pandemic and worsened by the rolling back of mitigation measures the government instituted to cushion the economy from shocks arising out of the virus.

“The impact has been mixed, depending on the industry and sector. Some sectors have been highly affected, especially those related to travel and tourism, while a number like the health sector remained resilient despite the challenges that were there,” said Kunyiha.

Payment plans

KAM chief executive Phyllis Wakiaga said  business has not resumed fully though there were improvements, with only 27 per cent of companies renegotiating their payment plans, unlike last year’s 66 per cent.

She said labour continues to drive down employment levels due to the impact of certain sectors that are key uptakers of products produced by the manufacturing sector.

Wakiaga said a 54 per cent rise in crude oil prices, and the depreciation of the shilling especially against the US dollar to Sh107 from Sh103 undermined the sector.

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