A production slowdown in China presents a growth opportunity for Kenyan firms to reclaim their lost market share in the region, an umbrella private sector body has said.
The Kenya Private Sector Alliance (Kepsa) says most of Kenyan factories have in the last decade been operating at suboptimal capacity, having lost their grip on the East African Community market to cheaper imports from China.
“Some of the companies have been operating at below capacity… and now could be the golden opportunity to invest in capacity expansion because demand may now be bigger,” Carole Karuga, the Kepsa chief executive, said at a press conference in Nairobi.
Kepsa wants the government to give incentives such as tax breaks and release of value added tax (VAT) refunds to manufacturers to help them expand capacity and substitute goods from China.
Ms Karuga said iron and steel as well as textiles are some of the heavily imported goods from China that can be substituted.
A poll by Kepsa showed last week about 61 percent of 127 firms have experienced negative business effects due to supply chain disruption as a result of outbreak of the contagious Covid-19 disease.