Just recently, one of the local dailies carried out a report pointing to massive layoffs in the economy. Specifically, some 4 companies would be laying off more than 2000 employees in their upcoming financial years. A dire situation to say the least. The decline in the private economy continues unabated due to various factors. A major factor is how and where the government spends its money. Economists have pointed out that growth in the economy is due to government spending as opposed to that of the private sector hence the layoffs.
Part of the problem is that there is lack of public private partnerships that would lead to growth in the private economy. More importantly, there would be skills transfer as opposed to how resources end up back to where they came from, China. With over 513,000 enrolled in universities as of 2018, there has never been a more critical time for the government to strive to expand the economy.
The government has since embarked on expanding the economy through 4 main pillars. One that would be capable of creating jobs is manufacturing, aside from agriculture (food security). When you look at the manufacturing sector by the numbers, it is easy to see why it an important pillar to securing economic growth.
Formal employment provided from manufacturing sector accounted for 11.1%, roughly 308,000 employees. The total output from the manufacturing sector stood at KES 2.4 trillion in 2018 up from 2.2 trillion in 2017. In 2018, the sector received financing from banks totalling KES 335.7 billion. The contribution of manufacturing to the economy as can be noted is critical.
The main challenges facing the manufacturing sector are competitiveness and financing. While there are factors beyond the manufacturers’ control, firms should focus on what they can control. Factors beyond their control include prices of inputs such as energy which the government largely controls.
The value addition from manufacturing is something Credit Bank is keen on contributing to. The impact of manufacturing on the economy is important and as a bank, this lies in tandem with our mission. Our approach as a bank is to provide sustainable and impactful financial solutions. For sustainability, this requires we take a wholesome approach to financing businesses. Our platform, the Entrepreneurs’ Hub, provides an opportunity for businesses to learn, engage and grow. The world is now a global village and manufacturing must remain competitive at a global level – as opposed to protectionism. With eHub, the entrepreneurs get to know how to compete taking advantage of various programmes we provide at a subsidised rate including one-on-one coaching sessions.
Financing is also crucial for expanding production capacities and thus increase employment opportunities. Manufacturing is capital intensive and further requires large amounts of working capital. Credit Bank works with businesses to provide solutions customised for each business. Alkhemy Brands is one of our customers whom we have provided with a financing solution suited to his business.
Credit Bank is committed to growing businesses that provide employment opportunities. Impacting our economy positively is what drives us. Alkhemy Brands is just one of a myriad of enterprises we have walked with in their business journey. Growing businesses alleviates the crisis of unemployment especially now that there are over 128,000 graduates annually versus 78,000 employment opportunities. The value addition of manufacturing could thus be the key or one of them thereof in growing the economy.