Kenya, Tanzania cement makers oppose zero-rated imports

Kenya, Tanzania cement makers oppose zero-rated imports
Published: 08 October 2009

Kenyan and Tanzanian cement makers want their governments to oppose the zero-rating of cement imports into a regional bloc, fearing they would harm the domestic industry, Kenya said on Thursday.

Uganda wants its partners in the five-member East African Community (EAC) customs union to scrap all tax on the building material from the current 25 percent. But other producers want the levy raised to 35 percent.

Kenya told the manufacturers that it preferred they produced more efficiently and cheaply.

"Eight cement manufacturers from Kenya and Tanzania have petitioned the government to convince her other partner states in the EAC that zero-rating cement would grievously harm the cement industry," Kenya’s Ministry of Industrialisation said.

"The government has been encouraging the cement industry to consider manufacturing competitively by investing in better technologies to ensure that the building commodity is accessible to the region at affordable prices," it said in a statement.

"The government is also interested in establishing the relative pricing between local and imported cement and is investigating the breakdown of the cost elements. This will enable it confirm the concerns players in the industry have towards the imported product."

Most of the cement imported into east Africa comes from China, whose companies are building roads across the region, and Egypt, which has cheaper electricity and transport costs.

About 40-48 percent of manufacturing costs for Kenyan cement producers is electricity bills, according to an association of manufacturers.