Trade Committee orders probe into high cost of Cement and Steel

Trade Committee orders probe into high cost of Cement and Steel

𝐁𝐮𝐧𝐠𝐞 𝐓𝐨𝐰𝐞𝐫𝐬, 𝐍𝐚𝐢𝐫𝐨𝐛𝐢 
𝐓𝐡𝐮𝐫𝐬𝐝𝐚𝐲, 𝐅𝐞𝐛𝐫𝐮𝐚𝐫𝐲 𝟐𝟎, 𝟐𝟎𝟐𝟓

The National Assembly’s Committee on Trade, Industry, and Cooperatives has called for an investigation into the high cost of cement and steel, despite the existence of a policy meant to encourage local manufacturing of the items.

Committee Chairperson Hon. James Gakuya (Embakasi North) expressed concern over the price surge, noting that the Export and Investment Promotion Levy was introduced to boost domestic manufacturing of the building and construction products.

The Finance Act 2023 introduced a 17.5 percent export and promotion levy on imported cement clinker, steel and paper products in what the government reckoned would help spur the country’s manufacturing sector. 

“Prices of cement and steel have been on the rise since the introduction of the levy. The real estate sector has been negatively affected. Something needs to be done urgently,” said Hon. Gakuya during a consultative session with Lee Kinyanjui, the Cabinet Secretary for Investments, Trade, and Industry.

CS Kinyanjui appeared before the committee to defend the Ministry’s 2025 Budget Policy Statement.

He was accompanied by Industry Principal Secretary Dr. Juma Mukhwana and representatives from the State Departments for Investment Promotion and Trade.

“Those who have been most hurt by the exorbitant cement and steel product prices are ordinary Kenyans. As a committee that oversees the industry, we cannot just sit and close our eyes. The ministry should conduct research on the impact of the levy and advise on the way forward,” stated Hon. Gakuya.

Committee Vice Chairperson Hon. Marianne Kitany (Aldai) emphasized the need for the probe to examine the number of new industries established since the levy’s introduction and how many have shut down.

“This committee and Kenyans in general also need to know how much export levy has been collected and how the same has been spent,” said Hon. Kitany.

Responding to the MPs’ concerns, CS Kinyanjui defended the levy’s imposition, describing it as a good policy. However, he acknowledged that the rising cost of cement and steel products contradicts the intended impact of the levy.

“The steady rise in prices of locally manufactured cement and steel products, despite global prices going down, has defied the intention of the policy. The logical expectation was for prices to decrease,” said CS Kinyanjui.

“As a Ministry, we have formed a team to look into the issue and determine whether manufacturers have colluded to fix prices. If we find evidence of artificial price hikes, we will take the necessary action,” he assured the MPs.

Earlier, while briefing the committee, CS Kinyanjui revealed that the three State Departments under his Ministry are facing a cumulative budget shortfall of nearly Sh36 billion.

“The State Department of Trade has a resource gap of Sh10.795 billion, while the State Departments for Industry and Investment Promotion require additional funding of Sh6.063 billion and Sh19.046 billion, respectively,” he said.