Boosting exports ranks among the top strategies the Kenyan government is aiming to improve. Kenya mainly exports agricultural products such as tea and coffee, which amount to over $6.1 billion. As it is, Kenya needs to expand its export market share globally for it to realize economic growth swiftly.
One of the critical areas the country needs to focus on amplifying is the manufacturing, technology, and SME sectors. However, there is a wee bit of constrains on how best Kenya can effect more exports and reduce imports. For example, some manufacturers want the government to eliminate taxations on locally produced goods. Also, innovators often lament of being neglected by the government.
On the other hand, entrepreneurs want the authorities to provide information about favorable foreign markets continually. Well, of course, all these views can offer workable solutions if addressed but they time and again raise debate. Below are four strategic ways to fix businesses and boost exports from Kenya.
Simplify exports regulations
Kenya is one of the few best countries to do business in Africa and ranks 61 globally, according to the International Trade Administration. However, stewardship, regulations, and paperwork procedures relating to exportation often affect new exporters negatively.
Similarly, most novice entrepreneurs fear facing exploitation by some rogue and corrupt officials in the ministry of trade. As a result, the traders end up opting to sell their products locally. The government should come up with simple and clear export regulations and requirements. It also should improve information dissemination about foreign markets. Still, it ought to ensure Kenyan exports meet the provisions of the standard imposed in developed countries.
Create more exports-duty-free schemes
Creating duty-free schemes is an effective way to boost exports, according to a recent study from the International Growth Center. The report indicates that eliminating duty pre-payments for exporters would significantly reduce credit requirements. In the same vein, achieving this would make raw materials accessible to local industries that want to venture into the exporting business.
Increase the availability of affordable credit
Availability of credit to Kenyan Manufacturers is crucial if at all the country wishes to snowball exports. Nevertheless, as it is, there are flinty constraints for small and medium enterprises (SMEs) to access loans. As of the end of 2019, commercial banks’ lending rate was 12.47% against the Central Banks’ rate of 9%. This makes it challenging for loads of SMEs to import raw materials or compete favorably with large firms.
The Kenyan government ought to improve credit accessibility and offer grants to SMEs. Financial lenders should also lower their interest rates and extend repayment periods without hefty penalties. Similarly, they ought to come up with favorable re-negotiation strategies that aren’t intimidating to borrowers. This way, more entrepreneurs would be more likely to take up loans to venture into the exporting business.
Improve cooperation among different economic sectors
Collaboration among commercial sectors is effectively carried out through public-private partnerships. The government of Kenya and business actors ought to jointly search for possible exporting opportunities in the international markets. Achieving this would undoubtedly complement other forms of trade such as tourism.
Furthermore, the coming together of different economic sectors in the country would possibly strengthen long-term and short-term trade policies. This would widely increase confidence to small-scale traders to consider taking up exportation as a business.
In conclusion, monitoring, marketing, and designing of nifty policies are essential for Kenya to work out its way in the export business. Indeed, growing the economy ought to go hand in hand with supporting farmers in the country. Attaining agricultural sustainability will minimize the number of resources that industries spend to procure raw material from foreign countries.