KENYA MOVES TO SAVE IT’S AILING MANUFACTURING SECTOR

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Kenya’s parliament have agreed on the legal framework to set up an independent agency to rid its market of cheap imports majorly from India and China that has seen many manufacturing corporations close down.

Dubbed, The Kenya Trade Remedies Agency (KTRA) the bill proposes monitoring mechanisms of dumping of subsidised goods in the country a role currently shared between the Kenya Bureau of Standards and the Kenya Revenue Authority.

In the bill it is proposed that the agency will be run by a board headed by a chairperson appointed by the President and a secretariat headed by an executive director, is also tasked with evaluating requests for application of safety measures on any shipments into the country.

The move to set up the agency comes as Kenya continues to lobby its East African neighbors to ratify the Economic Partnership Agreements (EPAs) with the European Union.

Once set up, the KTRA will, in partnership with the police, investigate suspected dumping and report to the Cabinet Secretary in charge of international trade imports being offered for sale at rates below normal market prices.

“The country’s high energy costs have been cited by the Kenya Association of Manufactures as contributing to high production costs. Industrial power costs, stand at an average of $0.17kWh compared with Tanzania’s $0.12; Egypt’s $0.11; Ethiopia’s $0.09 and South Africa’s $0.06.

In case of dumped goods, the Bill proposes an anti-dumping duty in amount equal to or less than the margin of dumping or less. A trader faces a KSh5 million fine for failure to attend summons by KTRA to respond to anti-dumping claims.

For subsidised goods, the Bill states, a countervailing duty in an amount equal to or less than amount of subsidy on imports will be imposed

Notable firms that have closed manufacturing arms in Kenya include Sameer Africa, Cadbury and Eveready in closing their factories in Kenya.  Mondelçz International, the US-based parent company of Cadbury Kenya, said the move was to enable it to focus its resources on scale manufacturing facilities where it can generate greater efficiencies, to reinvest in growth.

Other manufacturers that have closed down production lines in the country are Procter & Gamble, Reckitt Benckiser, Johnson & Johnson, Bridgestone, Unilever and Colgate Palmolive — with most of them either leaving for Egypt or South Africa.

The Kenya Association of Manufacturers (KAM) says on any given year the sector contributes between 10 and 11 percent to Kenya’s gross domestic product, which stands at more than $62 billion