Summary
- Kenya’s market is shielded by, among other things, tariffs and import quotas that may need to be reviewed to make imports from alternative sources such as African markets affordable.
- Manufacturers have started feeling the cost pressures as a result of shortages of raw materials and intermediate goods after China put factories on a lockdown to manage the disease.
Top government and private sector officials will hold a series
of meetings starting this week to explore alternative source markets for
supplies in the wake of deadly Covid-19 outbreak that has cut off
imports from China.
Trade and Finance ministries will
lead the talks. Kenya’s market is shielded by, among other things,
tariffs and import quotas that may need to be reviewed to make imports
from alternative sources such as African markets affordable.
Asked
whether the Treasury will consider waiving duty on imports from
alternative markets, Julius Muia, the Treasury principal secretary said:
“We haven’t decided how the government will come in. What we will come
up with will be in the best interest of our local industry in terms of
ensuring we have inputs at best prices possible.
But we are not looking to interfere with the market because it determines a lot of things.”
A
significant share of goods on the shelves of retail stores in Kenya are
shipped in from China and other Far East countries because of their
competitive prices.
Manufacturers have started feeling the cost pressures as a
result of shortages of raw materials and intermediate goods after China
put factories on a lockdown to manage the highly contagious disease,
according to a closely watched monthly survey.
A dry up of stocks could hit consumers hardest.
On
Friday, Health Cabinet Secretary Mutahi Kagwe said the meetings will
explore ways to cushion the economy from looming stock-outs.
“Part
of the reason we are holding the meeting is to ask ourselves those very
questions: What’s the alternative source of some of the materials that
we may be getting from China? What’s does the government need to do to
stimulate the economy in the face of this obvious economically
challenging situation that’s facing us?” Mr Kagwe told journalists in
Nairobi.
Increased prices of some goods in February saw
companies report a monthly drop in new orders for goods last month for
the first time since November 2017, according to Stanbic Bank Kenya’s
Purchasing Managers Index.
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