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Sachen Gudka

In a few months, the country’s annual budget will be read, outlining priority areas for next year.

Already, the Parliamentary Budget Office has given its analysis of the budget policy statement, sounding a red alert on diminishing funds for national development. 

This brings into focus the question; how do we grow and sustain our development budget as a nation?

Rather, how do we avoid finding ourselves at nil development budget again in the next financial year, and the one after that?

There are many ways to do this, one of which is to increasing the government revenue.

And the easiest way to increase government revenue is to ensure that existing businesses are thriving and expanding while also encouraging citizens to start and formalise new businesses.

If this can happen, the country will have a strong private sector that is generating revenue, attracting foreign investments and creating productive jobs.

This would automatically increase government  revenue to fund the national development budget.

It really is that straight forward. If we give businesses the room to do business, we will experience an immediate economic transformation.

Rather than have businesses spend colossal amounts of energy and resources, pushing back against stifling regulations or worrying about which unforeseen unfavourable policies will hit them next; we need to be finding ways to create space, free-up, harmonise and stabilise the business environment.

If we are to truly move small businesses from the peripheries of our economy to the centre stage of our growth strategy, we must ensure that a cluster-free unoppressive space is made available to them easily.

They must also feel nurtured and driven, to operate, to create and to formalise.

Freeing up the business environment means that businesses channel their time and money to innovate towards increasing their competitiveness. 

These kinds of investments signal a solid confidence in the country, and an assured contribution to the vision for sustained economic growth.

The Manufacturing Priority Agenda 2020 by the Kenya Association of Manufacturers (KAM) outlines the ways in which the country can achieve the above, in the short, medium and long-term.

Some of the measures highlighted include the need for the development of a pro-industry policy and institutional framework. 

Essentially, industry is saying that the design of coherent policies is key, between government departments and, also, between the National government and counties.

This will enhance effective and transparent policy execution. It reduces any instances of  “surprise policies” that disrupt and negatively impact businesses.

The agenda also emphasises on the need to maintain a stable macroeconomic environment.

One proposed measure is that the National Treasury sustain the ongoing fiscal consolidation measures and ensure the fiscal deficit is reduced to 3 per cent of GDP by the 2022/23 financial year.

Industry has also emphasised the need to boost SMEs in manufacturing. For SMEs to thrive, they need enhanced market access for their products and access to affordable finance.

This will not only increase their productivity, in turn creating additional jobs but also render them competitive as they expand.

We would like to help create a robust market in which businesses that come in as micros, find structures to support their growth into small, medium and finally, large enterprises.

There are also recommendations on how Kenya can enhance market access for local businesses.

Creating avenues for us to reach external markets plays a crucial role in supporting economic growth and industrial development.

We have all the answers as a country, and if we can give industry even half the space it requires to uplift this country economically, the ripple effect would be felt for years to come.  —The Writer is the chairman, Kenya Association of Manufacturers. [email protected]