Rédaction Africa Links 24 with Kenyans.co.ke
Published on 2024-04-04 13:49:12
Manufacturers and investors in Kenya are poised to benefit from a new industrialization policy that has been put in place. The Department of Industry Principal Secretary (PS) Juma Mukhwana announced on Thursday, April 4, that the government has established an industrialization kitty to provide loans to investors. This kitty will be funded by the money collected through the import levy, which was revised in June 2023.
According to Mukhwana, the government has already collected Ksh200 million through the import levy, which is currently set at 16 per cent of the Cost, Insurance, and Freight, along with other applicable taxes. The aim of this levy is to generate funds that can be used to support local industries and promote manufacturing in Kenya.
“We are not going to stop you from importing, but we are going to tax it in such a way that the money we make can be used to create our local industries,” noted Mukhwana. He encouraged producers to diversify the range of commodities manufactured in the country to access markets beyond Kenya. Mukhwana emphasized the importance of expanding markets to the whole East African community to enhance business growth.
Susan Mang’eni, the Permanent Secretary (PS) for Micro, Small, and Medium Enterprises (MSMEs), highlighted the potential for market expansion and business growth if the market is made more secure for businesses. She emphasized the importance of creating opportunities for local businesses to thrive and expand their operations.
Last year, the government introduced the Export and Investment Promotion Levy (EIPL), which is levied on imports excluding goods imported from the East African Community (EAC). The EIPL aims to promote local manufacturing and investment while generating revenue for the government and reducing reliance on imports. The Finance Act of 2023 introduced the levy, which is now applicable at rates of 10 per cent and 17.5 per cent of the customs value of specific imported products.
The Kenya Association of Manufacturers (KMA) had initially opposed the implementation of the Export and Investment Promotion Levy, expressing concerns about the potential impact on consumer prices amid already high living costs. However, the government proceeded with the levy to support local industries and encourage investment in manufacturing.
The industrialization policy and initiatives such as the export and investment promotion levy are part of the government’s efforts to boost local industries, create employment opportunities, and promote economic growth in Kenya. By providing access to loans and supporting local manufacturers, the government aims to strengthen the industrial sector and reduce reliance on imports. This strategic approach is expected to benefit manufacturers, investors, and the economy as a whole in the long run.
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