Ban clinker imports to grow local cement industry
Dr Nerandra Raval
Kenya’s development ambitions are currently premised on the government’s Big Four agenda, through which it seeks to achieve enhanced manufacturing, food security, universal healthcare and affordable, decent housing by 2022.
Under the blueprint, the government is targeting to expand manufacturing and increase its contribution to GDP from 9.2 per cent to 15 per cent; construct 500,000 new affordable houses; achieve 100 per cent food security and nutrition; and quality universal healthcare.
While the government has been working to realign its budget priorities to support achievement of the Big Four agenda, its full realisation also heavily relies on private sector support.
In this regard, we appreciate that the government has also put in great efforts to facilitate a conducive environment for private sector growth through significant improvements in the ease of doing business, reforms in the Judiciary and review of labour laws, among others.
A thriving manufacturing sector is especially important to the agenda set out by President Uhuru Kenyatta to whom the success of the Big Four agenda forms an integral part of his legacy.
This is because it will boost the government’s efforts to create more job opportunities for the millions of skilled, educated youths.
In this regard, the Devki Group of Companies has been working on an expansion strategy to boost its production capacity to meet market demand and thus support the affordable housing dream, in addition to job creation.
The new Sh5.8 billion cement manufacturing plant in Nakuru county is now operational and will directly provide employment opportunities to 700 Kenyans.
Currently, the country spends Sh25 billion to import clinker while a further Sh10 billion goes into steel imports amounting to about two million tonnes annually.
While we appreciate government efforts in the last 10 years to address bottlenecks that the manufacturing sector has been facing and continues to face, more needs to be done if it is to optimally play its part in realisation of the Big Four agenda.
In my view, there are two vital quick gains for manufacturers in the cement industry that can be realised through strategic government interventions.
First, since the country has enough clinker to meet local demand, the government should impose duty or a total ban on clinker importation.
This will protect local industries from competition, create more jobs for Kenyans, and save the country billions of shillings in foreign exchange annually.
Taming clinker imports will also reduce cement prices and encourage more Kenyans to build affordable houses.
We urge the government to impose duty—25 per cent or more—on clinker importation like the Tanzania government did to protect local industries and create more jobs for Kenyans.
Second, the government needs to wholly address the issue of electricity supply, which is another huge impediment to growth of the manufacturing sector.
While tremendous progress has been made to reduce the cost of electricity, investors are still grappling with challenges such as acquisition of land for way leaves, which is stalling construction of factories.
On our part, we are committed to fixing the country’s clinkers gap and making Kenya a regional market for raw material in cement production. —The writer is chairman, Devki Group of Companies.
