Kenya sees strong growth as country bets on proposed MSME law

Kenya is on the brink of a groundbreaking economic transformation with the imminent launch of the proposed Medium and Small Micro Enterprises (MSME) Policy 2025. The government's optimism is soaring as this policy promises to revolutionize funding and access to opportunities for MSMEs in the country. CNBC Africa recently engaged in a compelling conversation with Victor Otieno, Managing Director of Viffa Consult, shedding light on the crucial importance and potential impact of the upcoming policy. The MSME sector in Kenya is a key driver of the economy, contributing approximately 33% to the GDP and accounting for over 80% of all new job creation. Yet, despite their significant role, MSMEs face daunting challenges that often lead to a high mortality rate of over 75% within the first three years. The MSME Policy 2025 is poised to address these challenges comprehensively. Some of the key issues that the policy aims to tackle include fostering an entrepreneurship culture, enhancing skills development, improving access to local and export markets, resolving financial constraints, upgrading infrastructure, promoting technology adoption, formalizing operations, and boosting productivity and competitiveness. By aligning with the priorities set out in the MTP4 and the beta manifesto, the new policy sets a solid foundation for the sustainable growth of MSMEs in Kenya. Moving forward, the operationalization of the policy will be a critical milestone in unleashing the full potential of businesses across the country. The MSME Policy 2025 outlines eight policy objectives that will guide the implementation process, addressing the core challenges faced by MSMEs. The State Department of MSME has embarked on a robust public participation initiative, engaging stakeholders in all 47 counties to gather feedback and insights. Once the feedback is consolidated, the policy document will be finalized alongside an updated MSME Act, which will undergo scrutiny by the Cabinet and National Assembly for ratification. The successful implementation of the MSME Policy 2025 holds immense promise for Kenya's economy. The formalization of MSMEs through streamlined regulatory processes and digital platforms is expected to spur growth in business registration. Moreover, increased productivity and profitability are anticipated, setting the stage for MSMEs to not only expand domestically but also compete regionally and globally. Victor Otieno emphasized the critical need for the MSME Policy 2025 to succeed, highlighting the pivotal role that MSMEs play in driving socioeconomic development in Kenya. Failure is not an option, as the consequences of inaction could stifle economic progress and jeopardize the vital contributions of MSMEs to the nation's prosperity. While challenges in implementation loom, the collaborative approach outlined in the policy, engaging both state and non-state actors, reduces the likelihood of failure and paves the way for a vibrant MSME sector in Kenya.