Kenya’s construction sector faced a significant setback last year due to the surge of cheap imports, which hampered the growth of the local manufacturing industry.

The impact was particularly felt in the cement production sector, which experienced a 1.79 per cent decline in production, dropping to 9.62 million tonnes from 9.79 million tonnes in 2022, according to the latest figures from the Economic Survey 2024 report.

During the year in review, imports surged to 34.2 thousand tonnes, up from 29.8 thousand tonnes in 2022, negating the government’s efforts to spur growth in the construction industry through the introduction of the Exports and Investment Levy by the Finance Act 2023.

The levy proved to be a double-edged sword. While on the one hand, the government aimed to protect local industries from cheap imports by imposing a 17.5 per cent tax on imported clinker and metal products and a 10 per cent tax on packaging paper products, on the other hand, it inadvertently stifled the growth of the local cement industry.

Kenya Association of Manufacturers Chief executive Anthony Mwangi issued a warning that the levy might not serve its intended purpose of protecting local clinker producers.  Instead, he cautioned, it could result in the importation of cheaper finished cement from the East Africa Community partner states.