Egypt denies claim of dumping goods

Egypt has dismissed reports of swamping the local industry with subsidised goods, saying the cheap exports are helping the Kenyan consumers.

The country which has been in turmoil for over a year now following the ‘Arab Spring’ citizen uprising has maintained a steady stream of exports to Kenya despite the month-on-month tonnage halving from January cargo.

Commercial officials at the Embassy of Egypt in Nairobi said the businessmen asking for drastic measures on the country had no evidence of dumping and were complaining for selfish interest.

“We do not advocate banning of imports from Egypt. However, we strongly advocate that the government seriously considers placing compulsory counter-veiling duty of 35 per cent minimum which would be equivalent to $500 (per tonne) consideration that Egypt is giving to its manufacturers,” wrote Synresins, a manufacturer of resins used as a raw material for making paint, in a petition to Kenya Association of Manufacturers.

Egypt is the largest manufacturer in the Common Market for Eastern and Southern Africa (Comesa) Free Trade Area. Interestingly on the day the Business Daily interviewed Egyptian officials, they let out that a paints manufacturer was waiting to meet them in another room as he seeks to put up a factory in Kenya.

Egyptian firms have been making cheap resins from the cheap oil available in the country. 

Ahmed Ibrahim Aly, minister counsellor heading the commercial office dismisses the Kenyan manufacturers’ complains saying because Egypt has cheap energy sources including oil cannot be taken as subsidising of goods.

“There are no subsidies. The cost of production is informed by the energy costs,” he said adding that it was the equivalent to claiming Kenya is subsiding goods by using cheap labour.

Mr Aly went on to defend Egypt against International Monetary Fund (IMF) demand for removal of subsidies especially on energy saying it would hurt the people. IMF has for months now withheld a loan to Egypt as the turmoil continued amidst resistance to cutting the budget deficit.

Diesel in the country cost $0.18 (under Sh15.70) a litre at the pump between 2008 and last year, according to World Bank data while natural gas is delivered at low prices to the factories. Egypt fears cutting subsidies in view of rising economic hardship and violence by its population.

Mr Aly asked firms with grievances to petition the Comesa Secretariat in Lusaka claiming that Egypt had traded with Comesa for 13 years without the matter arising.

Kenyan companies however, have throughout the period crusaded against Egyptian goods with government officials visiting the country to verify the claims. Egyptian officials say electronic, food and cosmetics factories were visited.

Some Kenya-based industries including Procter & Gamble have closed down with the transnationals preferring to import from Egypt.

“Egypt’s export to our traditional export market namely Tanzania, Uganda, Rwanda Burundi, Zambia Malawi and Ethiopia are also very large and most of us Kenyan manufacturers have been squeezed out from our traditional market by subsidised products from Egypt,” said Arun Devani, the managing director of Synresins, in the complaint letter, adding that Egypt was economically colonising the region.

The letter contained a detailed analysis of the Egyptian impact.

“It is just rumours. None of the other Comesa members have complained,” said the Egyptian official who believes the country is making inroads because of quality.

Kenya Ports Authority numbers indicate the Mombasa Port has been handling between 200,000 and 262,000 tonnes of Egyptian goods annually. This year to June, Egypt had shipped in 118,189 tonnes.