We will not import what we can manufacture, Ruto says

President William Ruto has said his government has begun the process of reversing import policy to promote manufacturing which has seen a 2 percent decline in the last five years.

The President was speaking during the launch of Devki Steel Mills, the second largest milling firm in Africa, in Kwale County where he promised to promote locally manufactured products.

“The government of Kenya will stand with you to ensure all the products that can be manufactured here will not be imported again,” he said.

According to the President, 16 steel factories have closed down due to the removal of taxes on imported goods which he says has resulted in 5,000 job losses.

“For that reason, in the last five years, we have reduced the contribution of industrialisation from 9 percent of GDP to 7 per cent of GDP,”  he said. 

Ruto asserted that individuals have influenced the change of import policy. He added that he has engaged the Kenya Association of Manufacturers to increase the contribution of industries from the current seven percent to 30 percent of the GDP by 2030.

“I have already given instruction for the creation of a policy framework that favours production, manufacturing, and our industries to make sure we can create jobs and save on our foreign exchange,” he added.  

Trade Cabinet Secretary Moses Kuria has announced that he will impose a duty on steel and iron products manufactured in Kenya, effectively prohibiting their importation.

“As from January next year, we shall ban the importation of raw materials available in Kenya and products being manufactured in the country to protect our companies,” said Kuria.

Uganda has agreed to give 5 million tonnes of iron ore annually to the Devki Steele factory as Kenya seeks an alternative source of the raw material.

The steel factory is the second-best facility after South Africa on the African continent to produce virgin steel from iron ore. This type of production requires no mixing and produces superior-quality wire rods and steel billets.

According to Devki Group, the steel factory cost KES 30 billion and has the capacity to produce  1,000,000 tonnes of steel annually. The company expects to create 1,500 jobs directly.

A report by the Kenya National Bureau of Statistics (KNBS)  released in January showed that the imports of iron and steel in the nine months to September last year shot up to KES 120.77 billion compared to KES 71.42 billion in 2019.

In the same period, the value of iron and steel imports rose by 69 percent driven by increased economic activity and a global price rise of the commodities after supply cuts.

According to World Integrated Solutions, Kenya imported iron or steel and expanded metal was $262,86o,000 and quantity 181,487Kg in 2019.  The largest import was from China totaling 130,691 Kg, followed by India totaling 50,032 Kg.

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