On Wednesday, May 22, the Kenya Association of Manufacturers (KAM) raised concerns over the potential influx of substandard goods into the local market due to proposals in the Finance Bill 2024.

In an interview with Spice FM, KAM Chief Executive Officer Anthony Mwangi highlighted that Kenya's participation in the East African Community (EAC) common market, which includes major trading partners Uganda and Tanzania, could lead to a significant disadvantage for local manufacturers. Kenya is also a member of the Common Market for Eastern and Southern Africa (COMESA) and the African Continental Free Trade Area (AfCTA), which operate under similar frameworks.

Mwangi explained that the Finance Bill primarily affects local products, and if adopted, it could result in the Kenyan market being overwhelmed by cheaper imports from neighboring countries. “Any fees, levies, and duties imposed by the Government of Kenya are domestic taxes that affect only Kenyan products and companies,” Mwangi stated. “Consequently, Kenyan companies and products become uncompetitive, leading to our market being flooded with products from other EAC and COMESA countries.”

He noted that the trend began with the Finance Act 2023, which already harmed local industries, and warned that the Finance Bill 2024 could worsen the situation. Mwangi cited examples of how Kenya, once the largest exporter of paper and steel products to EAC member states, has become an importer due to these policies.

Local products at risk include vegetable oils and plastic goods. KAM predicts that the proposed 25 percent excise duty on vegetable oils could cause prices to surge by up to 80 percent. Additionally, the 10 percent excise duty and eco levy on plastics could increase the price of locally made basins from Ksh 110 to Ksh 200.

Mwangi also mentioned that the introduction of the eco levy might reverse the progress made in local manufacturing of diapers and sanitary wear since 2015, potentially leading to an increase in imports as these items become cheaper for consumers to purchase from abroad.

KAM's concerns highlight the delicate balance between domestic tax policies and their impact on local manufacturing competitiveness within regional trade agreements.