• Government wants to impose import levies on steel, pharmaceuticals, paper and furniture.
• Manufacturers say they will lose out because they will be undercut by regional competitors who won't pay the same import duties
It's a funny situation when local manufacturers are complaining about the introduction of protective import duties. Normally they support protection because it gives them the chance to make super-profits. Something is fundamentally wrong.
The Kenya Association of Manufacturers is complaining about new import levies on steel, pharmaceuticals, paper and furniture.
They says that they will be undercut by regional competitors unless the whole East African Community imposes the same import duties. There is free movement of goods with the EAC so their fears are justified.
It is not clear whether protective tariffs work or not. They do help local manufacturers to operate more profitably. But consumers have to pay more for products they need and they get less choice. Arguably, local manufacturers also stop innovating because they are protected from competition with global suppliers.
Regional governments need to decide whether they want to impose protective tariffs to assist local industries. But, if they do, they should do so jointly and introduce those import duties for the whole common market.
Otherwise steel manufacturers in Uganda and Tanzania, and others, will undercut and undermine local manufacturers in Kenya, the very people that the government is trying to protect.
Quote of the day: "My only crime is that I am a Kenyan revolutionary who led a liberation army."
The British executed the Kenyan rebel leader on February 18, 1957