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The manufacturing industry in Kenya has been significantly impacted by the surge of cheap imports. The construction sector, in particular, has faced a significant setback due to the influx of cheap imports, which has hampered the growth of local manufacturing. The introduction of the Exports and Investment Levy by the Finance Act 2023 aimed to protect local industries from cheap imports by imposing a 17.5% tax on imported clinker and metal products and a 10% tax on packaging paper products.
However, this levy inadvertently stifled the growth of the local cement industry, leading to a decline in production and a significant increase in the cost of cement production. The price of cement skyrocketed from around Sh520 per 50kgs to over Sh800, marking a 60% increase, which contradicted the Affordable Housing policy. This situation has raised concerns about the potential loss of over 100,000 jobs and the creation of a monopoly in the industry[3][5].
Citations:
[1] https://twitter.com/PeopleDailyKe/status/1795289809554203090
[2] https://www.scoopernews.com/m/2024/05/27/manufacturing-industry-hit-hard-by-cheap-imports/55943667
[3] https://www.pd.co.ke/business/manufacturing-industry-hit-hard-by-cheap-imports-236233/
[4] https://www.businesstoday.in/magazine/cover-story/story/chinese-imports-hitting-india-msme-sector-134280-2014-02-13
[5] https://nation.africa/kenya/business/cheap-imports-stifling-growth-of-local-manufacturing-industry-in-construction-sector-4602246
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