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By Helen Nyambura-Mwaura
Reuters
Oct 8, 2009
NAIROBI (Reuters) - Eight Kenyan and Tanzanian cement makers want their governments to oppose the zero-rating of cement imports into a regional bloc, fearing they would harm the domestic industry, Kenya said on Thursday.
Uganda wants its partners in the five-member East African Community (EAC) customs union to scrap all tax on the building material from the current 25 percent. But other producers want the levy raised to 35 percent.
Kenya told the manufacturers that it preferred they produced more efficiently and cheaply.
"Eight cement manufacturers from Kenya and Tanzania have petitioned the government to convince her other partner states in the EAC that zero-rating cement would grievously harm the cement industry," Kenya's Ministry of Industrialisation said.
"The government has been encouraging the cement industry to consider manufacturing competitively by investing in better technologies to ensure that the building commodity is accessible to the region at affordable prices," it said in a statement.
"The government is also interested in establishing the relative pricing between local and imported cement and is investigating the breakdown of the cost elements. This will enable it confirm the concerns players in the industry have towards the imported product."
Most of the cement imported into east Africa comes from China, whose companies are building roads across the region, and Egypt, which has cheaper electricity and transport costs.
About 40-48 percent of manufacturing costs for Kenyan cement producers is electricity bills, according to an association of manufacturers.
Unlike most sectors of Kenya's economy, construction has remained robust in east Africa's leading economy and cement companies have been some of the biggest beneficiaries of the boom.
Over the first half of 2009, cement consumption rose more than 52 percent to 1.6 metric tonnes from the same period last year, according to government statistics.
Kenyans, however, complain cement price are prohibitive.
The last two EAC countries are Burundi and Rwanda. Both rely cement imports. The bloc's common external tariff for cement, which was included in a list of sensitive products, has gradually come down from 55 percent in 2005, when the bloc customs union came into effect.
The governments have agreed to a draft common market protocol which they hope they may come into effect at the start of 2010. The EAC aims for a political federation in the future.
Reuters
Oct 8, 2009
NAIROBI (Reuters) - Eight Kenyan and Tanzanian cement makers want their governments to oppose the zero-rating of cement imports into a regional bloc, fearing they would harm the domestic industry, Kenya said on Thursday.
Uganda wants its partners in the five-member East African Community (EAC) customs union to scrap all tax on the building material from the current 25 percent. But other producers want the levy raised to 35 percent.
Kenya told the manufacturers that it preferred they produced more efficiently and cheaply.
"Eight cement manufacturers from Kenya and Tanzania have petitioned the government to convince her other partner states in the EAC that zero-rating cement would grievously harm the cement industry," Kenya's Ministry of Industrialisation said.
"The government has been encouraging the cement industry to consider manufacturing competitively by investing in better technologies to ensure that the building commodity is accessible to the region at affordable prices," it said in a statement.
"The government is also interested in establishing the relative pricing between local and imported cement and is investigating the breakdown of the cost elements. This will enable it confirm the concerns players in the industry have towards the imported product."
Most of the cement imported into east Africa comes from China, whose companies are building roads across the region, and Egypt, which has cheaper electricity and transport costs.
About 40-48 percent of manufacturing costs for Kenyan cement producers is electricity bills, according to an association of manufacturers.
Unlike most sectors of Kenya's economy, construction has remained robust in east Africa's leading economy and cement companies have been some of the biggest beneficiaries of the boom.
Over the first half of 2009, cement consumption rose more than 52 percent to 1.6 metric tonnes from the same period last year, according to government statistics.
Kenyans, however, complain cement price are prohibitive.
The last two EAC countries are Burundi and Rwanda. Both rely cement imports. The bloc's common external tariff for cement, which was included in a list of sensitive products, has gradually come down from 55 percent in 2005, when the bloc customs union came into effect.
The governments have agreed to a draft common market protocol which they hope they may come into effect at the start of 2010. The EAC aims for a political federation in the future.
