Manufacturers Seek Tariff Cuts to Address High Production Costs

Kenyan manufacturers and exporters have expressed concern over escalating production costs that significantly reduce their profits.
Business representatives are urging the government to implement measures such as reducing tariffs on export items where production expenses have been rapidly increasing.
Their concerns were raised during the ‘Exporters Round Table’ discussion, which brought together industrialists and entrepreneurs from Thika, Kiambu County, organized by the Kenya Export Promotion and Branding Agency (Keproba).
David Kimani from Kevian Kenya, a producer and exporter of fruit juices and various food products, highlighted the burden of high electricity charges and other taxes that must be lowered for manufacturers to remain competitive.
Additionally, Kimani noted that agriculture-focused enterprises face challenges with import duties on processing equipment, even though they assist farmers by supplying seeds and agricultural inputs.
Kimani also voiced apprehension about the decreasing availability of agricultural land in Kiambu and surrounding areas due to expanding real estate development.
Agricultural land near Thika and its vicinity is rapidly being replaced by construction projects. While housing development is beneficial, there remains a fundamental need for food production,” stated the manufacturer.
Srinivas Garikipatis, export director at Mjengo Ltd which produces Nuvita biscuits, agreed and emphasized that Kenyan manufacturers of finished goods face intense yet unfair competition from nations like India and China offering cheaper products.
Developing economies globally are providing incentives to boost their manufacturing sectors. Kenya should adopt similar strategies,” Srinivas added, noting that local manufacturers currently pay up to 30% in tariff charges.
According to Garikipatis, exporters should have access to markets across Africa to mitigate losses caused by international conflicts such as the Middle East war and the Russia-Ukraine crisis.
Keproba Chief Executive Floice Mukabana stated that the agency is collaborating with exporters to diversify market destinations and ensure Kenya’s premium products maintain their presence in international trade.
This partnership will tackle the difficulties encountered by industry participants and develop solutions to existing operational obstacles.