President William Ruto Pledges On Transforming the Micro, Small and Medium Enterprise (MSME) Economy

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President William Ruto Pledges On Transforming the Micro, Small and Medium Enterprise (MSME) Economy

The MSME economy contributes 85 per cent of non-farm jobs which today translates to 15 million out of 18 million workforce. Presently, it is absorbing nine out of 10 of the young people joining the workforce, 750,000 on average, while the formal wage corporate economy barely absorbs 50,000.

KNBS data shows that when properly established, MSMEs contribute very significantly to the economy, generating an operating surplus a worker of over Sh50,000 a month, adding up to Sh600,000 a year. However, an estimated 10 million informal MSME operators and workers generate less than Sh5,000 income a month on average, which is below the living wage for one person.

This is a reflection of the hostile environment that they operate in, criminalisation of their enterprises (e.g., hawkers), as well as disguised unemployment. These 10 million people, who represent half of Kenya’s workforce, are the country’s most underutilised resource. Our estimates show that if these workers were as productive as those in established SMEs, they would be generating Sh6 trillion a year, which is 60 per cent of GDP i.e., the economy would be 60 per cent larger.

The Kenya Kwanza Commitment

• End criminalisation of work. We will enact a right to work law, making trading licences and provision of a trading location an entitlement to every citizen who applies. We will work with county governments to provide one-street trading premises for every 50 urban residents, with a view to increasing average daily income of informal traders by Sh200;

• Regressive taxation. Bureaucracy and regulatory compliance costs. We will review and rationalise all business licences, cap total licences at 1.5 per cent of turnover and enact administrative burden law (similar to US Reduction of Paper Work Act) ensuring no business spends more than 4 person hours a month on tax and regulatory compliance;

• Access to finance. We will commit Sh50 billion a year to provide MSMEs with 100 per cent access to affordable finance through SACCOs, venture capital, equity funds and long-term debt for start-ups and growth-oriented SMEs;

• Infrastructure & Capacity Building. We will establish MSME Business Development Centre in every ward, and an industrial park and business incubation centre in every TVET institution.

 

SOURCE: Citizen Digital

Add More Here: info@myleader.co.ke Call/Whatsapp:+254768371097

 

 





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