The Government has allayed fears that some companies are closing down in the country following reports by a section of the media that increased competition, reduced output and dwindling investment opportunities was driving investors out of business.
Cabinet Secretary for Industry, Trade and Cooperatives, Adan Mohamed, has reassured Kenyans that the government supported local companies in critical industries to continue operating.
“Recent reports in the media have been highlighting closures of businesses in the country. Whilst there have been instances of such closures, it is important to note that the steady growth of our economy that has averaged six percent has been way above the global average of three percent and this has led to massive growth of investments to over 300 percent over the past 3 years alone,” said Mohamed
In statement issued he said that the Government has been doing its part; reducing cost of production by reducing the cost of power by increasing its supply, reducing cost of logistics by improving the efficiency at the Port of Mombasa as well as expanding its capacity.
Mohamed also said that the construction of the Standard Gauge Railway will further reduce time to transport goods as well as ongoing construction of roads that are in turn improving business margins and sustaining businesses.
The CS said businesses world over face various challenges during their life cycle some of which could be due to competition, harsh operating environment, access to markets, management practices and access to finance, among others.
“Technology is an emerging major shaper for business strategy as well and those businesses that have no digital strategy or have not adapted to appropriate changes that are technology based have faced serious challenges,” said Mohammed.
He said that the business climate improvement agenda, through the Ease of Doing business program, has seen Kenya ranked by the World Bank as 3rd most improved country globally for two consecutive years, far above many countries in the region. In 2016, Kenya was the most improved country in Africa.
He pointed out that there are notable investments which have happened over the past three years saying “we could point out the following; Wrigley’s, a global American company that is part of the Mars group, broke ground for the set-up of a Kshs.5 billion plant in Machakos County; GZI has set up the only can manufacturing facility in the region worth Ksh.10bn.
Others are; Honey Well Group of the USA, a fortune 500 company has opened their regional office in Kenya, Global Motor Vehicle group VW set up an assembly plant recently in Thika. Tatu City is a new Industrial Zone expected to have investment levels on excess of Kshs.10bn.
“Local companies have been expanding existing business such ABM Batteries, Keroche Breweries that set an expansion through investing in a plant of Sh 5bn, Bidco Group is investing in a brand new plant in Thika, the East African Cables has expanded over the same period,” said the CS.
Mohammed said that over 20,000 jobs have been created over the same period with companies such as Mombasa apparel, Balaji EPZ investing in excess of Ksh7 billion over this period.
“The number of jobs created in the apparel sector alone, at more than 20,000 eclipses more than six NSE listed firms in terms of employment creation. Rai Paper investment of Ksh 10 billion is a company that has been dead for nearly a decade is another story of the benefits that the country is reaping” he added.