DRAFT TO BENEFIT PRIVATE SECTOR

The proposed new constitution is intended to build a strong foundation for the country's economic, social and political progress, President Mwai Kibaki has assured.

President Kibaki made the remarks Wednesday at the Laico Regency Hotel during celebrations to mark the 50th Anniversary since the establishment of the Kenya Association of Manufacturers (KAM).

During the occasion President Kibaki said that the new constitution will not only improve governance structures in the country by allowing greater accountability by the Government but will also boost citizen participation in all sectors of the economy.

The Head of State assured that the new constitution would be a boon for the private sector by establishing structures that create a conducive environment for a vibrant private sector.

"This is why I personally support the Proposed Constitution that will give way to job and wealth creation for our people," said the President.

The President said that the Government was determined to formulate sound policies and enact relevant legislation that would create an attractive environment for doing business in the country.

He affirmed that the Government was rolling out comprehensive programmes planned to tackle various challenges inhibiting the local manufacturing sector to realize full potential.

Noting that a strong manufacturing sector is a vital pillar for the creation of wealth and employment opportunities in the country, President Kibaki affirmed that the sector is equally central in the realization of Vision 2030.

The President said, "You are marking this anniversary at a time when the government is laying much emphasis on manufacturing as a key pillar of VISION TWENTY THIRTY. As will be appreciated, a strong manufacturing sector is fundamental to the creation of wealth and employment opportunities. Last year employment in the formal manufacturing sector, for example, was 265,000 while the informal manufacturing sector employs 1.6 million Kenyans."

The Head of State assured the manufacturers that the Government valued the important role the industrial sector continues to play in the recovery and growth of the economy.

He said that the Government was giving priority to the development of the manufacturing sector as well as the micro, small and medium scale enterprises to ensure the Vision goals are attained.

"The Government will continue to put in place strategies, incentives and flagship projects to ensure that the vision's goals are attained. The Government will also constantly review the business environment in order to make it more conducive," said the President.

Electricity

Among the challenges the Head of State cited that the Government was giving special attention to tackle by allocating substantial budgetary allocations included infrastructure, energy, security, arbitrary charges levied by regulatory and local authorities and the cost of financial services.

He assured, "The Government is paying special attention to these challenges. In this year's budget, for example, the Government significantly increased its financial allocations on infrastructure and energy. The funds will be utilized for infrastructural development to lower production costs."

President Kibaki expressed confidence that the infrastructural development would lower energy and production costs while increased funding to the Ministry of Internal Security would combat insecurity.

"In addition, the Government has allocated additional funds to the Ministry of Internal Security to finance the creation of a high impact security programme.

This programme is expected to cover operations, communication, crime profiling and intelligence analysis to enhance security in urban centers and highways," affirmed the President.

With regard to financial services, President Kibaki said the Government supported lower lending rates by commercial banks adding that through the Central Bank the Government promotes access to affordable credit.

He noted, "It is encouraging to note that there have been reductions in base lending rates by some commercial banks. I am hopeful that this will lead to lower lending rates and higher uptake of loans across the economy."

Other measures the Government had introduced to improve the business environment in the country include the establishment of 24-hour operations at the Port of Mombasa and according local firms priority in supply of textiles, furniture and motor vehicles to government departments and ministries, said the President.

He declared that other initiatives established by the Governmemt to address various challenges faced by investors include key flagship projects like creation of special economic zones as well as small and medium scale enterprise parks.

The Head of State noted, "Through the Special Economic Zones, we will be able to address some of the infrastructure challenges faced by investors in the manufacturing sector. The small and medium scale enterprise parks will also provide a breeding ground for new manufacturing small scale enterprises. I appeal to large manufacturers to support small and medium scale enterprises through sub-contracting, outsourcing and franchising".

In order to avert regional development imbalances and the rural-urban migration occasioned by concentration of industrial facilities in major urban centres, President Kibaki said that the Government had founded the Constituency Industrial Development Centres to encourage development of industries in rural areas.

Commending the association for its growth since its humble beginning, the President said that celebrations were timely as they had occurred on the eve of the coming to force of the East African Common Market protocol on 1st July.

He challenged the manufacturers to invest in value addition ventures particularly of agricultural products in order to fetch higher returns and fight poverty through to increased job opportunities.

Speaking during the occasion, Industrialization Minister Henry Kosgey commended President Kibaki for his firm leadership that has seen the country overcome challenges caused by the 2007 post election violence and the global financial meltdown.

In this regard, the Minister called on Kenyans to rededicate their efforts and patriotism towards making the country realize its development goals.

On his part, KAM Chairman Vimal Shah reaffirmed the association's commitment to work with the Government in making Kenya a country Kenyans will be proud of.

Mr Shah assured the President that most investors in Kenya are positive about the country's future and are playing their part in encouraging economic growth.

Other speakers included former KAM Chairman Chris Kirubi and KAM Chief Executive Officer Betty Maina.

During the occasion, the President presented recognition awards to former KAM Chairpersons.

The celebrations were attended by Vice-President Kalonzo Musyoka, Head Public Service and Secretary to the Cabinet Amb. Francis Muthaura and other senior Government officials.