NAIROBI, Kenya, Mar 17 – The government is working on modalities to formulate a stimulus package for the cotton industry to bailout the ailing sector from economic abyss.
Prime Minister Raila Odinga said plans to cushion the sector from the ravages of the prevailing economic downturn may soon be unveiled to ensure that the industry resumed its vibrancy.
He said the government was perusing recommendations of the 2006 task force report on the textile industry with a view to formulate policy measures that could create a conducive environment for investors.
Mr Odinga made the assurance when investors in the sector paid him a call at his Treasury offices to register their concern in the wake of dwindling profits in the sector.
At least 41 textile companies have closed shop and more than 400,000 jobs lost since 2006 due to the hostile investment environment in a sector that had the potential to employ more than half a million people.
The Premier said some of the remedial measures the government intends to put in place in an effort to salvage the sector from collapse included offers on subsidies and tax waivers for investors.
“We are ready to help reduce the tax burden on investors especially on power bills which have lately attracted public outcry from the consumers. We are trying to create an investment destination in the country,” he said.
Mr Odinga informed the investors of government intentions to factor the proposed adjustment in the coming budget to protect the surviving companies from the looming collapse of the sector.
He said plans to waive energy taxes and levies could not be ruled out in the stimulus package in the wake of the realisation that the cost of energy in the country was discouraging investors.
The Premier however challenged the entrepreneurs to install solar and wind power generators in their premises to cut costs and supplement the energy supply from the national grid.
He also advised the investors to put up modern ginneries and spinners to cut costs of operations and assured that the government would offer certified cotton seeds for farmers to boost production.
Industrialisation Minister Henry Kosgey and Assistant Minister Alfred Khangati attended the meeting.