20100413
Business Daily

Manufacturers are projecting improved growth in 2010 on the back of improvements in the economies of east African community member states and Comesa countries.



he Kenya Association of Manufacturers (KAM) say economic growth projections by Kenya’s trading partners and the growing sentiments in support of regionalism will favour Kenyan products as manufacturers seek bigger export markets across the region.

The manufacturers say the sector will grow by over four per cent in 2010.

The manufacturing sector grew by 3.8 per cent—the lowest expansion in the last five years, according to the Economic Survey 2009.

This compares poorly to neighbouring Uganda which has registered a consistent 10 per cent growth over the last eight years.

The value of manufacturing output rose by 14.5 per cent from Sh626.2 billion in 2007 to Sh717.2 billion in 2008.

Key growth drivers include food, beverages, tobacco and chemicals.

The projections come after two recent surveys by Synovate and TNS Research International which say that consumer confidence in the economy is rising.

The TNS research International survey attributes the growth to the easing global economic contraction and the end of the long drought in Kenya while the Synovate survey pinned the growth on the improvement in Kenya’s economy.

“Projections for 2010 are informed by global and domestic trends for the first three quarters of 2009. The global financial crisis whose impact was heavily felt last year will continue to impact negatively on the demand for exports and tourism in Kenya’s main source markets in Europe. The onset of the El Nino rains late last year is anticipated to result in a recovery in agriculture and occasion greater reliability in energy and water supply” says KAM.

But it is the expansion in the economies of neighbouring countries which consumes most of Kenya’s manufactured goods that is driving the greatest optimism in local producers.

“The main destination for Kenya’s manufactured products is the EAC and COMESA; and since Sub-Saharan Africa is projected to grow .1 per cent in 2010, Kenya’s manufacturing sector can be expected to expand in line with regional growth and domestic demand” KAM says in its current business intelligence reports for the manufacturing sector.

East and central Africa countries are today Kenya’s most important trade partners after Europe.

They account for Sh274 billion of the trade this nation does with the world.

The growing population of the east African region is also creating hope for increased consumption of Kenyan products.