By Sofia Ali
Kenya manufacturers have experienced a setback in production and demand following covid – 19 pandemic that has seen placate demand and reduction in production in many companies, while the greatest effect of the pandemic has been loss of life and strain on health facilities. Businesses have not been spared too, according to survey done in May 2020 by KPGM in conjunction with Kenya Association of Manufactures (KAM).
In an interview with KAM Chief Executive Officer Phyllis Wakiaga, the manufacturing sector plays an important role in driving economic development by stimulating and sustaining high productive growth, boosting employment opportunities for semi-skilled Labour and building country competitiveness globally through exports.
Wakiaga says the sector has however been hit hard and is facing significant challenges during this pandemic. “We are in the midst of the covid-19 pandemic as a country and for the last few months we have been able to look at the effects of the pandemic on the sector to see what opportunities are available and how we can carry on during this period. As the association, in March 2020 we carried out a survey that indicated possible disruption in the supply chain. Towards the end of May 2020 we carried out another survey to identify the impacts of the pandemic on the sector. We saw reduced demand, reduction in production and increased attentiveness at manufacturers’ levels to look at their cash flows.” Said the CEO
She however, reiterated the resilience of Kenyan manufactures citing innovation and capabilities of manufacturers to be able to produce quality products. “During this season we have seen a lot of innovation and resilience of local business, we have seen people diversifying their manufacturing around the essential goods required during this pandemic like face masks, sanitizers and other PPEs. This has demonstrated and proven that our local manufacturers have the capacity to produce quality products and can be relied on. ” Wakiaga was speaking in Kiambu County during the handover of PPEs to public hospitals handling COVID-19 patients.
Wakiaga said that the association was working on modalities that can enable the sector to recover in conjunction with the government and other stakeholders to get the sector back on track as other sectors in Kenya and around the world try to recover from the crisis. The demand for the products as remained subdued due to uncertain of the pandemic. “We are also working closely with the ministry of trade and industry on strategies to rebound and recover within this context of covid 19 and see how we can maximize on the opportunities in the sector. We are also working with KPMG on rebound recovery paper on the sector that will give guideline and opportunities within the sector” she said.
The manufacturing sector contributed 7.5 percent to the GDP for the fiscal year 2018-2019. Although, during the last quota, the sector experienced a drop of 30 to 50percent depending on the respective sectors of Manufacturing.
EPZ is one of the sector that is labor-intensive and can play an important role in alleviating unemployment especially among the youth. The sector employ up to 52,000 people. The local sector employs directly about 21,000 people in formal sector and over 30,000 informally. The two sub sectors cumulatively employ over 200,000 indirectly. Additionally the sector by farm products from over 40,000 cotton farmers. Total annual turnover of the apparel subsector is estimated to be Ksh 38 billion while the textile sector is about Ksh 24 billion. In 2017.