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Economy

State imports drop by a third

port of Mombasa
A ship arrives at the port of Mombasa. FILE PHOTO | NMG 

Import orders by government entities fell by nearly a third in the financial year ended June compared with a year earlier, partly signaling progress in President Uhuru Kenyatta’s call for higher domestic supply quota in public procurement.

Government imports, latest statistics show, dropped 27.83 percent to Sh41.56 billion compared with a decades-high of Sh57.59 billion posted 12 months earlier.

Statistics collated by the Central Bank of Kenya (CBK) show government’s import bill have largely been rising in the last six years, except in the year preceding 2017 general election when orders dropped slightly.

Government imports rose from Sh9.91 billion in the year ended June 2013 to Sh11.58 billion the following year, Sh23.88 billion in June 2015, Sh39.15 billion in June 2016 and Sh36.24 billion in the year through June 2017, the data show.

The CBK data does not usually disclose particulars of the imports, but the items commonly ordered by State departments and agencies include furniture, textiles, paper products, food and machinery.

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Commercial imports by traders, on the other hand, were flat, falling by a marginal 1.89 percent to Sh1.69 trillion, the first drop since the year ended June 2016.

Mr Kenyatta has since December 2014 instructed State ministries, departments and agencies to increase the quota of locally produced goods in support of the “Buy Kenyan and Build Kenya” initiative aimed at creating jobs for the growing unemployed youth.

The President raised the local content quota in supplies to the government to 40 per cent on June 1, 2015 from 30 per cent set by his predecessor Mwai Kibaki’s regime in a bid stimulate orders from domestic factories.

Trade and Industry secretary Peter Munya said in June the State was reviving a plan to prohibit ministries and other government agencies from importing some products, a protectionist strategy mooted around 2015.

“The list of restricted goods is almost ready for gazettement. The (Public Procurement and Asset Disposal) regulations which will provide for penalties and disciplinary measures for those who defy are also almost ready for implementation,” Mr Munya said on June 19.

The list of restricted goods, he added, will include products which are readily available locally such as furniture, staff uniforms, pharmaceuticals and vehicles.

The Presidential order directing ministries and government departments to only buy locally-assembled vehicles has, for instance, been in place since December 2016.

This was in a bid to boost demand for cars assembled in Kenya for automakers such as Volkswagen of Germany and French Peugeot which re-entered Kenyan market in 2016 and 2017, respectively.

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