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"id": 241302,
"url": "https://info.mzalendo.com/api/v0.1/hansard/entries/241302/?format=api",
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"type": "speech",
"speaker_name": "Dr. Kituyi",
"speaker_title": "The Minister for Trade and Industry",
"speaker": {
"id": 293,
"legal_name": "Mukhisa Kituyi",
"slug": "mukhisa-kituyi"
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"content": " Mr. Speaker, Sir, I beg to move that Mr. Speaker do now leave the Chair. Mr. Speaker, Sir, while I will endeavour to explain some of the things that my Ministry does and justify the budgetary request that we have made in this Committee of Supply, my Vote July 25, 2006 PARLIAMENTARY DEBATES 2301 has fallen on a historical significant date, barely 24 hours since the collapse of the Doha Round of Negotiations under the World Trade Organisation (WTO), which presents us with an immediate challenge that is of public interest and common interest to the Members of the National Assembly. So, at the end of my presentation, I will hazard a few remarks about what it portends; this collapse of the most development-friendly negotiation in multilateral trade rule-making. The mandate of the Ministry of Trade and Industry is to formulate industrial development strategies with specific responsibilities for intellectual property and patent policies, which include quality control, consumer protection, development of micro, small and medium enterprises, and oversee the operations of 13 parastatals. On the issue of growth in export and import trade, the total export earnings of this country expanded by 13.7 per cent during the year 2005, while the import bill grew by 18.2 per cent. The trade deficit rose from Kshs149 billion in 2004, to Kshs186.5 billion in 2005. The appreciation of the Kenya Shilling and increase in the price of petroleum products accounted for this change of fortunes. Africa, as a destination, dominated Kenya's exports accounting for 49.3 per cent of our total exports, while the European Union accounted for well over 25 per cent. The Middle East countries were the leading source of our imports, supplying 25 per cent of our total imports, which registered a growth of 6.6 per cent last year. The value of Kenya's exports to COMESA increased by 19.7 per cent, accounting for 36.6 per cent of our total exports in 2005. The bulk of Kenya's total exports accounting for 47.6 per cent was destined for Uganda while imports from the COMESA Region increased by 4.9 per cent. The balance of trade between Kenya and Egypt registered a surplus of Kshs2.65 billion in 2005, substantially increasing from a mere Kshs491 million the previous year. My Ministry has spearheaded negotiations with the US Government, that led to Kenya becoming the first African country to qualify for access to the African Growth and Opportunity Act (AGOA) facility. The Ministry has also negotiated the extension of the Third World country sourcing of fabrics under the AGOA. As a result, the turnover at the Export Processing Zone Authority increased by 34.2 per cent in 2003 and up to 63 per cent in 2004. Mr. Speaker, Sir, under the National Export Strategy, the Ministry of Trade and Industry is implementing the National Export Strategy, which outlines strategies to improve the country's export functions and earnings. The Ministry will soon be launching the Private Sector Development Strategy which has taken a substantial amount of time to prepare, with a lot of consultations among all stakeholders across the borders. The Private Sector Development Strategy provides a framework for enhancing private sector growth and competitiveness. It will, in turn, contribute substantially to the growth of wealth and employment. The Kenya-European Post Lome Trade (KEPLO) is a facility under my Ministry for providing enhanced capacity for ongoing economic partnership agreements negotiations between our country as part of the ACP and the European Union. The Ministry, through the Internal Trade Department, will continue to restructure joint loan schemes to make the facilities more accessible and relevant to the present credit requirements of small scale traders. The Ministry also facilitates enhanced cross border trade. In this regard, I am glad to announce that in our last council meeting of the East African Community last week, we agreed on some facilities to fast track and simplify cross border trade, particularly at retail level between communities living along the international borders. My Ministry will continue to review and strengthen the roles played by both Kenya Bureau of Standards (KEBS) and the Kenya Industrial Property Institute (KIPI) and make them more effective in carrying out their regulatory roles in quality control, patent and trade mark registration. My Ministry will also continue with the efforts of restructuring our investment promotion institutions in order to enable them to shed the cumbersome and unnecessary bureaucratic 2302 PARLIAMENTARY DEBATES July 25, 2006 procedures which have in the past hindered investments. Progress has already been made in restructuring the Kenya Investment Authority into a one-stop-shop with regard to investment. My Ministry also recognises the important role played by the micro and small scale enterprises in our economy. The Ministry intends to restructure and strengthen both the Kenya Industrial Estates and the Industrial Commercial and Development Corporation (ICDC) so that they are able to extend affordable credit to the micro and small scale enterprises. Mr. Speaker, Sir, my Ministry takes cognisance of the fact that industrial development in any economy depends on the strength and ability of public institutions to innovate and apply those innovations. It is in recognition of these facts that the Ministry will continue to support the Kenya Industrial Research and Development Institute (KIRDI) to play a leading role in innovations and share the same with the relevant stakeholders. My Ministry is also actively researching for a strategic partner to work with in turning around the numerical machining complex, enabling it to become a viable manufacturing entity and the basis for capital goods manufacture. With proper planning and financial support, the complex has the potential to significantly contribute to the growth of the manufacturing industry in this country. We will continue to review our involvement in the shareholding of our commercial enterprises such as the Kenya Wine Agencies Limited (KWAL) and the East African Portland Cement Company (EAPCC), within the framework of the Government's policy on privatisation. The manufacturing sector, though faced with a number of constraints in the current calendar year, 2005, registered intensive growth in outputs in all areas. Real value added growth grew by 5 per cent in 2005. The good performance can partly be attributed to a stable micro- economic environment that prevailed during the year, improved access to credit and increase in export demand, particularly in the East African Community and the COMESA market area. Manufactures also took advantage of the Government's policy incentives like tax exemptions for some inputs and reinforcement of anti-dumping measures. The growth in this sector, however, did face certain challenges which include: Poor infrastructure such as roads and railways, the appreciation of the Kenyan Shilling against the major international currencies, high cost of energy, persistent insecurity, diversion of transit goods or goods designated as exports into the Kenyan market. The sales from the Export Processing Zones accounted for 4.7 per cent of our total turn- over in the manufacturing sector compared to 5.4 in the previous year. This was due to increased domestic sales. The total number of employment in the manufacturing sector increased in 2005 to 247,500, up from 242,000 in the previous year. Now, may I turn to core programmes and activities of the Ministry in the coming financial year. During the 2006/2007 Financial Year, my Ministry will undertake the following activities: Operationalised export development strategies, which as I mentioned, have taken a lot of consultations and time to put together. It will also continue to offer leadership and strengthen COMESA as a regional market. Mr. Speaker, Sir, I wish to mention here that it is of critical importance that Kenya must offer leadership in the creation and strengthening of the Common Market for Eastern and Southern Africa (COMESA), which is not only the largest common market area in the whole of Africa but, as I mentioned earlier, it accounts for 50 per cent of Kenya's total export to the whole world. While there have been questions raised in this House before, about Kenya's relationship with Egypt, it is reassuring and heartening that, in the year under consideration, Kenya's export to Egypt grew to a surplus of more than Kshs2 billion. But that does not mean that we should sit on our laurels. We should constantly continue to address those factors that inhibit our competitiveness and enhanced access to the market that we so painstakingly helped to negotiate and strengthen. (ii) Participation in selected trade fairs in strategic markets is also one of the things that we consider important in the coming Financial Year. July 25, 2006 PARLIAMENTARY DEBATES 2303 (iii) The adoption of new technologies to improve product design and packaging. (iv) Bringing to this House the Anti-Dumping Bill which has been a long pending important piece of legislation. (v) Continue spearheading the fight against counterfeit substandard and dumped goods in the Kenyan market. (vi) To rationalise and optimise commercial representation and trade missions outward bound. (vii) To enhance Kenya's participation in preferential market such as COMESA, the East African Community, the European Union, AGOA and new emerging markets for our country around the world. (viii) Realisation of the operations of the Joint Loans Board Scheme to improve accessibility of credit to small scale entrepreneurs, particularly in the country-side. (ix) Continuous enforcement of the development of standards, quality assurance, testing and calibrations of instruments, and to ensure the use of accurate weighing and measuring equipment in all trade practices. (x) Promote entrepreneurship and competitiveness of the micro, small and medium enterprises. Mr. Speaker, Sir, when launched, the Private Sector Development Strategy will provide the mechanism to strengthen private-public partnership and the implementation of all the identified areas of industrial and commercial broad. Additionally, the Ministry is working towards a consolidated industrial and trade policy in order to give the sector a long-term perspective. On the basis of that policy, we expect to mobilise efforts towards concrete industrial development of our country. My Ministry's budget allocation for the 2006/2007 Financial Year is extremely modest. In order for my Ministry to achieve the above stated objectives and core functions which are aimed at promoting trade and industrial development investment, I am requesting this House to approve an expenditure of a mere Kshs1,608,508,700 in the Recurrent Expenditure, and Kshs414,426,000 in the Development Expenditure for the Financial Year 2006/2007."
}