The Kenya Association of Manufacturers (KAM) on Wednesday, May 22, remarked that there was a danger of substandard goods flooding the local market due to the proposals being made in the Finance Bill 2024.
Speaking during an interview with Spice FM, KAM Chief Executive Officer Anthony Mwangi remarked that Kenya operates within the East Africa Community (EAC) common market which includes some of the country’s largest trading partners Uganda and Tanzania.
Additionally, Kenya is also a member of The Common Market for Eastern and Southern Africa (COMESA) and the African Continental Free Trade Area (AfCTA) which have similar frameworks to those of the EAC common market.
Since the Finance Bill only affects local products, Mwangi worried that should it be adopted by the National Assembly as it is, then the local market was at risk of being stifled by cheap products from other countries.
“Any fees, levies, and duties imposed by the Government of Kenya are domestic taxes that affect only Kenyan products and companies,” he explained.
“Consequently, Kenyan companies and products become uncompetitive, leading to our market being flooded with products from other EAC and COMESA countries.”
Mwangi remarked that the Finance Act that came into effect in 2023 had already set this trend in motion and that Finance Bill 2024 was threatening to exacerbate matters.
He drew examples of how Kenya used to be the largest exporter of paper and steel products to EAC member states but Finance Act 2023 reversed all the gains and the country became an importer.
Some of the local products that will be pushed out of the market include vegetable oils as well as plastic goods.
According to KAM, the proposed 25 per cent excise duty on vegetable oils will see the price of the commodity rise up to 80 per cent.
On plastics, due to the 10 per cent excise duty as well as the accompanying eco levy, Kenyans will see locally made basins rise from Ksh110 to Ksh200.
“Before 2015, we imported diapers and sanitary wear, but since then, we have developed local manufacturing capacity. However, with the introduction of the eco levy, we might see an increase in imports again, as it will become cheaper for consumers to purchase imported products,” he added.
