President Kenyatta assures manufacturers of 30pc electricity cost reduction

July 25, 2019
President Uhuru Kenyatta arrives at the Bidco Industrial Park in Ruiru, Kiambu County for the official inauguration of the facility/PSCU

, RUIRU, Kiambu County, Jul 25 – President Uhuru Kenyatta has assured manufacturers that the government is in the process of rolling out a 30 percent electricity cost reduction plan to be implemented through a rebate system.

President Kenyatta further announced that special requests for further cutbacks to be extended to the textile and steel mill sub-sectors are under consideration and will be effected by the end of the year.

The President underlined the government’s investment in diversification of the national energy mix with a focus on renewables like wind and geothermal energy both of which have lower feed-in tariffs than thermal energy.

“This year alone, we have seen the injection of over 310 megawatts of renewable energy on to our grid,” the President said.

President Kenyatta was speaking today when he inaugurated the Bidco Industrial Park that will host the company’s beverage and food processing factory at a ceremony that was also attended by Deputy President Dr William Ruto and former Prime Minister Raila Odinga in Ruiru, Kiambu County.

The Head of State urged leaders to uphold peace, stability and national unity as important ingredients that attract investment.

He affirmed his administration’s focus on implementing more business friendly policies that will reduce the cost of manufacturing thereby enhancing the sector’s global competitiveness.

He said the policies are being implemented with the desire for results as the government works to grow the contribution of the manufacturing sector to the national cake from its current 8.4 to 15 percent.

The President emphasized that expansion of the manufacturing sector, a crucial component of the Big 4 Agenda, holds the key to the creation of jobs for the youth.

President Kenyatta noted that the new factory has already created 1,000 direct jobs and 5,000 indirect jobs throughout the Bidco distribution chain.

He expressed satisfaction that through contract farming, Bidco Group has engaged 35,000 farmers across the country to supply them with soya and sunflower produce.

“This, in essence is what we are trying to achieve as a nation, a manufacturing sector that links with other productive sectors of the economy,” he said.

To address the various impediments that hinder the sustained growth of the local manufacturing base, President Kenyatta said his administration is using a ‘whole of government approach’ under the framework of the National Development and Implementation Committee that he put in place at the beginning of this year.

“Among these challenges are issues such as counterfeits and illicit goods, dumping, VAT refunds, taxation policy on manufacturing concerns, government pending payments, energy costs, port and transport logistics delays, bureaucratic red tape, corruption, multiplicity of regulatory fees and levies, market access for locally made goods, among other concerns,” he said.

On transport and logistics, the President said the government recently put in place measures to reduce the number of regulators operating at the ports of entry and at the inland container depots.

“This has already seen an immediate reduction in the turnaround time for clearance of imported cargo,” President Kenyatta said.

Noting that the extension of the Standard Gauge Railway to Naivasha will be complete in a matter of months while the revitalisation of the Kisumu Port is firmly on track, the President said these investments will ease the movement of cargo both within the country and the region when complete.

He said his administration has also started to address the huge amounts of accumulated VAT refunds saying as of Thursday morning, Sh 14.7 billion had been refunded to affected businesses while another Sh24.6 billion is currently in the process of verification by the Kenya Revenue Authority.

“In addition, my administration has proposed, as part of the Finance Bill 2019, the reduction of VAT withholding tax from 6 to 2 percent,’ he said.

Last month the government released Sh50 billion for settling pending bills that had accumulated at both mational and county government levels with some of the payments going to local manufacturers and suppliers, most of whom are SME’s that form the bedrock of the economy.

On market access for locally manufactured products, the President said a list of products that will receive exclusive preference through purchase by all ministries and state departments top of which are locally assembled motor vehicles.

“We have also commenced the implementation of the ‘Buy Kenya, Build Kenya’ and local content policies, all of which are expected to expand the local market for manufactured goods and services,” he said.

To curb counterfeits, illicit goods and dumping, President Kenyatta said the relentless war against these vices by the multi-agency team he set up has started to bear fruit across the entire spectrum of the local manufacturing sector.

“All these industries have in the last six months witnessed increased sales occasioned by the steady elimination of competing counterfeit products from the Kenyan market,” the President said.

He expressed optimism that his administration’s open door policy with the business community will accelerate achievement of the Big 4 Agenda.

The President said his administration has put in place the necessary incentives for the development of Special Economic Zones and Industrial Parks by the private sector to complement government’s efforts to plug the infrastructure deficit so as to improve the business environment.

Deputy President Ruto, former Prime Minister Odinga, Kiambu Governor Ferdinand Waititu, Cabinet Secretary for Industry, Trade and Cooperatives Peter Munya and Bidco Africa Chairman Dr Vimal Shah also spoke at the event.

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