add category option missing for users

I am trying to implement the my directory site at

The questtion/issue I have is that:

Regular users cannot add a new category. Please see screenshot

The other screen shot is that of the admin and there you can see that I can add a category

The downside for me is that I would have to as admin, come up with all the subcategories and create those.
Is there a way to allow the users to add categories for their own listings?