East Africa’s cement producers are pushing for higher tariffs on imported brands, in a campaign that could spark off yet another diplomatic spat with Pakistan, a crucial partner in the tea and rice trade.
The push for higher tariffs is in response to Pakistan’s decision to offer transport cost subsidies to its exporters, making it possible for bulky imports such as cement to favourably compete in East African markets.
East Africa Cement Producers Association (EACPA), the manufacturers’ lobby, wants duty on cement increased to 35 per cent from 25 per cent or Sh3,850 per tonne to level the playing field.
Cement manufacturers described Pakistan’s move as unfair, citing the high cost of transport and electricity in East Africa.
The region’s producers pay three to five times for these services compared to countries such as Egypt, Pakistan, and India.
“Whereas we recognise the efforts being made to improve the physical infrastructure, we are not yet in the comfort zone in terms of costs to compete with Asia’s low cost producers,” said David Njoroge, the EACPA chairman.
All Pakistan Cement Manufacturers Association (APCMA), the producers’ lobby, last month succeeded in its long running campaign to get a 35 per cent subsidy on inland transportation expenses for cement exports to boost foreign sales.