A survey undertaken by the Kenya Association of Manufacturers and KPMG of about 180 industries in the EAC found that about 40% of workforce has been reduced, with most manufactures working to reduce cost, retain jobs and improve cash flows; 91% of non-essential goods manufacturers have seen a significant fall in demand compared to 74% of essential goods manufacturers.

However, the current pandemic has hastened several trends, including local sourcing and innovation as manufacturers change their lines to produce critical and essential items to be used in the fight against COVID-19.

The ministry has been encouraged by our local manufacturers, who have responded well to the crisis with innovative solutions, to build capacity for the local production of critical supplies such as ventilators, PPEs, thermometer guns and HDU beds among others.

The juakali sector, comprised of informal traders and artisans who work at the roadside and market centers, has a key role in the manufacturing pillar of the Big-4 Agenda. Provision of common user facilities and equipment to the sector by the Micro and Small Enterprises Authority is helping to boost production, quality and efficiency in the juakali sector amidst the current challenges brought about by COVID-19.

A nanotechnology and semiconductor manufacturing facility opened in April 2021 reiterates the importance of Public-Private Partnerships (PPP) in advancing the manufacturing pillar of the Big-4 Agenda. The company, which is the only one of its kind in Africa, produces integrated circuits, sensors, and related nanotechnology products for the world market.

The Kenyan government has transformed the manufacturing sector in a number of ways, including through transport infrastructure upgrades that encompass the building of modern railway systems, major highway and bypass road construction, and upgrades to our international and regional airports and airfields.

The ministry and the Kenya Revenue Authority have been receiving and processing applications for the manufacture for raw materials and intermediate inputs, in order to benefit from reduced rates of import declaration fee and Railway Development Levy. Once in production, the ministry will propose positive taxation regimes for the locally manufactured products to compete with other similar imports.

The structure of taxation – in terms of both income and value-added tax (VAT), as well as excise duties – is also a key factor in attracting FDI. Because of this, in recent years Kenya has signed double-taxation treaties with various countries, including Canada, Denmark, France, Germany, India, Iran, Mauritius, Norway, Sweden, the UK, Zambia and South Africa. Most of these agreements offer preferential tax rates and allow individuals to set off withholding tax against their tax liability in the participating nations.

The EAC as an economic bloc has also created double-taxation treaties with partner countries such as Kuwait, Iran, Mauritius and the UAE, which are pending ratification.

In our quest to become a regional manufacturing hub, priorities have been set to expand and modernize the industrial sector, with the development of special economic zones, industrial parks and clusters, and niche products. There is a wide range of direct and joint-investment opportunities in this sector, including agro-processing, garments, the assembly of automotive components and electronics, plastics, paper, chemicals, pharmaceuticals, metals, and engineering products for domestic and export markets.

Furthermore, Kenya has a vibrant investment climate characterized by stable monetary and fiscal conditions and a legal environment that makes no distinctions between foreign and domestic investment.

Kenya also has a strong telecommunications infrastructure, a robust financial sector, and it is the major trade and investment gateway for much of East Africa, with a well-educated population and a growing urban middle class.

Nairobi is regarded as “the mother of mobile money” and a mecca of innovation and diversity. The city has more than 200 tech-focused startups, and offices of tech giants Google, IBM, Intel and Microsoft. According to a report by tech-investment platform Partech on Africa’s tech startup sector, Kenya is outperformed only by Nigeria when it comes to equity funding from tech venture-capital firms.

Kenya’s government is at the forefront of technology development. Investors are being lured to Nairobi and are heeding the call positively, so the city has positioned itself as an investor-friendly hub.

In addition, the government has always demonstrated its willingness to support industry innovation, for instance, through initiatives like The Kenya Industry and Entrepreneurship Project (KIEP) implemented by the ministry with support from the World Bank Group.

Between 2019 and 2024, KIEP aims to increase innovation and productivity in select private-sector firms in Kenya by strengthening the private sector (including startups, SMEs, incubators, accelerators, technology boot-camp providers, etc.) through financial grants and technical assistance.

And Kenya is a particularly popular destination for agricultural technology, with a whopping 79% of total equity funding throughout Africa for this vertical-flowing into the country, as well as off-grid tech through which Kenya receives almost 40% of the continent’s total funding. We are home to startups using artificial intelligence to support precision-farming methods, which involve deep analysis of satellite-imagery data to project rainfall and drought patterns, thus helping farmers plan more accurately for the future.

And thanks to the undersea fiber-optic cable, Kenya is now characterized as a truly connected landscape, with one of the fastest mobile-communication speeds in the world. Mobile networks are thus leveraging this strong demand to offer Kenyans a variety of services that they can access through their phones for significant convenience. In turn, this has helped to boost financial inclusion throughout the country, which is stimulating further growth of Kenya’s already dynamic FinTech scene.