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Boost for local firms as Kenya secures EAC duty protections

Phyllis Wakiaga
Phyllis Wakiaga, KAM chief executive. FILE PHOTO | NMG 

Kenya has secured several duty protections against imports from East Africa in a bid to protect its local manufactures dealing in those commodities.

Rice, Liquefied Petroleum Gas Cylinders, wheat, paper and paper board, a raft of metal products, leather shoes, edible oil and clothes are among the goods Kenya secured for protection against cheap imports from its neighbours.

The stays lasting one year are among the key negotiations Nairobi took to Arusha when ministers of finance met last month to review tariffs under the EAC Common External Tariff (CET)regime.

The regional tariffs allow member countries to export products in the region at a zero or lower custom duty.

The countries are, however, allowed to seek for stays to protect certain commodities from imports that may hurt its local production.

Kenya has, however, waived the exemption on garments and leather footwear offloaded from EPZ, a move that is said to have rattled EAC member states.

The move to increase local market access for designer apparels made by EPZ firms to 40 per cent from the initial 20 per cent saw EPZ firms access local market in open sales events held at the Kenya International Convention Centre last year.

Kenya Revenue Authority (KRA) chief manager in charge of Policy Kariuki Githigi said the reversal was made to maintain a fair play within the region.

“These are decisions guided by consensus and that is why Kenya chose to reverse the decision. We have, however, secured various stays in the last negotiations meant to keep our local manufacturers protected from any cheap imports,” Mr Githigi said during a post budget analysis event held by KRA.

Gas cylinders and safety matches, which would ordinarily enter Kenya duty free under the CET will now attract 25 per cent duty while shoes will have a 35 per cent duty in the protections.

EAC members also agreed to extend their duty exemption on select vehicles for the transportation of tourists to included motor cars, sightseeing buses and overland trucks imported by licensed tour operators.

Treasury Cabinet Secretary Henry Rotich presented the proposals in Parliament last week as Kenya’s neighbours are fast industrilising and receiving imports from China and India.

Kenya Association of Manufacturers chief executive Phyllis Wakiaga said the move will be a major boost for local manufacturer. “This is a welcome move, which is expected to increase the production capacity for local companies and stimulate demand for the end products. It will promote manufacturers and allow them to import raw materials that are not available in the region at a lower rate,” Ms Wakiaga said.

EAC states we are also said to be working on the framework for the implementation of the EAC Non-Tariff Barriers (NTBs) Act, 2017 aimed at eliminating non-trade barriers within the bloc.

An online platform has been established to help monitor the NTBs as the countries near the June 30 deadline for the review the Common External Tariffs.

Faced with influx of cheap imports from China and India, the EAC is struggling to keep its intra-regional trade amidst trade tussles between such members as Kenya and Tanzania.

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