The Council of Governors (CoG) is leading a concerted effort to drive ‘bottom-up’ economic growth by focusing on Micro, Small, and Medium Enterprises (MSMEs) through targeted policies and programs. Governor Susan Kihika, heading the CoG Trade, Industry, Manufacturing, and Enterprise Development Committee, shared the comprehensive strategy during a recent high-profile meeting in Naivasha.
Central to this initiative is the commitment to create a favorable business environment. The CoG aims to streamline license acquisition, enact supportive business growth laws, and foster a culture conducive to enterprise in all 47 devolved units. Governor Kihika emphasized the CoG’s pledge to support the private sector through innovative economic development programs.
The strategic toolkit includes enticing incentives such as lower taxes, rebates, and refunds specifically for the costs associated with constructing factories. The CoG is also exploring avenues to provide subsidized land for expansion, facilitate access to low-cost loans, and cultivate an ecosystem that fosters overall business growth.
Governor Kihika highlighted the importance of industry clusters, urging counties to leverage the critical mass of marketing services. The goal is to attract specialized finance and provide affordable access to technology, ultimately creating an environment conducive to the success of MSMEs.
The consultative meeting centered on fostering collaboration between the National Government, the Ministry of Investment, Trade, and Industry, and the 47 County Governments. The collective objective is to accelerate the growth of businesses that significantly contribute to job creation and wealth generation.
Addressing the challenges faced by MSMEs, Governor Kihika underscored that despite their potential for wealth creation and job growth, many face collapse within their initial three years. The Micro and Small Enterprises Act of 2012 delineates micro enterprises based on turnovers and employee count.
Governor Kihika emphasized the pivotal role MSMEs play in generating jobs, boosting GDP, supporting industrial development, and providing essential inputs and services to larger firms.
Insights from a recent FinAccess survey revealed that 30% of Kenya’s MSMEs employ 1-20 employees, constituting a significant yet often overlooked segment of the sector. The Kenya Small Firm Diaries study further emphasized the unique financial dynamics of small firms (1-20 employees) and called for tailored approaches to address their needs.
Navigating both formal and informal setups, small firms showcase agility as a key asset in negotiating the complex and volatile business environment. With the CoG’s unwavering commitment and innovative strategies, the ‘bottom-up’ growth anchored in the potential of MSMEs is poised to drive sustainable and inclusive economic transformation across Kenya.
By: Montel Kamau
Serrari Financial Analyst
7th December, 2023
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