Plans are underway to introduce technology demonstration centres in a bid to boost the country's manufacturing sector, the Ministry of Trade and Industry has announced.
A technology demonstration centre serves as an important tool to promote acceptance and adoption of new technologies as a means to inspire people to set up factories.
Trade and Industry Minister, Francois Kanimba, said the manufacturing sector continued to face technological challenges.
"We are working on an organisation cluster that will be imparting manufacturing skills to particularly emerging small and medium enterprises so they get knowledge to start up local factories, hence reducing the country's trade deficit," Kanimba explained.
He said his ministry was in the process of securing funds from the African Development Bank (AfDB) to sustain the technology demonstration centres.
According to an East African Community (EAC) report on SMEs, 93.07 percent of SMEs are engaged in commerce and services, 1.86 in professional services, 1.66 in arts & crafts, whereas manufacturing accounts for only 1.33 percent.
According to officials, there is need to address the challenges SMEs face in order to build an economy that's based on processed exports.
Information from the Ministry of Public Service and Labour indicates that most SMEs are unable to upgrade to manufacturing and processing due to limited access to financing and lack skills.
A 2008 survey by On the Frontier and the Private Sector Federation (PSF) also identified lack of customer or market knowledge, capital, uncompetitive prices and transport among some of the main challenges facing SMEs.
The government says value addition will help the country reverse trade imbalances and reduce poverty.