The Kenyan government is considering an increase on duty on imported clinker to rein in trading malpractices. It says some errant cement companies have been abusing the low tax regime of 10 per cent in the region and now wants to take countermeasures to reduce clinker imports.
“Some of these cement companies are importing clinker and the same companies are mining clinker and exporting it to neighbouring countries. So we need to come out together to discipline that behaviour because you cannot import a raw material and still at the same time export the same raw material,” Kenya’s Trade and Industry Principal Secretary, Johnson Weru, told The East African in an interview last week.
In 2020-21 National Cement Co and Mombasa Cement, the only two companies to produce clinker in Kenya, submitted a proposal that duty on imported clinker be increased to 25 per cent from 10 per cent, arguing they have sufficient capacity to supply the aggregate local demand for clinker in Kenya.
But Bamburi Cement, Savannah Cement, Rai Cement and Ndovu Cement, which rely on imported clinker for cement production, went up in arms against the proposal saying the move will lead to unfair competition and destroy investments.
Kenya has a clinker shortage of 3.3Mta, 40 per cent of demand, with 59 per cent of the deficit being imported duty-free from Egypt, according to the National Independent Clinker Verification Committee. However, the total clinker production capacity in the country is around 8Mta.
