Kenyan manufacturers and exporters have raised concerns over the high cost of production, saying it is eroding profits and weakening competitiveness in both local and international markets.
Speaking during an Exporters Round Table forum in Thika, Kiambu County, held by the Kenya Export Promotion and Branding Agency (Keproba), industry players cited high electricity tariffs, taxes and levies among the main challenges affecting operations.
David Kimani of Kevian Kenya that manufactures and exports fruit juices and other foodstuffs, noted that elevated power costs and multiple production levies have made it difficult for manufacturers to remain profitable.
He also highlighted that import duties on machinery used in agro-processing were increasing production costs despite the sector’s role in supporting farmers through value addition and input provision.
“The high cost of production is dwindling profits and affecting our operations. We ask the government to come up with policies that support production, including reduction of electricity tariffs, taxes and levies,” said Kimani.
Srinivas Garikipatis, Head of Exports at Mjengo Ltd Company, which manufactures Nuvita biscuits among other foodstuffs, said local producers of finished goods such as biscuits face stiff competition from cheaper imports from countries like India and China.
He argued that Kenyan manufacturers are disadvantaged by high local tariffs of up to 30 percent, calling for government incentives to boost competitiveness.
Garikipatis further urged the government to support regional market expansion within Africa to cushion exporters from global disruptions such as geopolitical conflicts and supply chain shocks.
“All growing economies around the world are giving their manufacturers incentives to produce more. Kenya needs to go that route,” said Garikipatis, noting that manufacturers are currently paying up to 30 percent in local tariffs.
Keproba Chief Executive Officer, Floice Mukabana, said the Agency is working closely with exporters to diversify markets and address structural bottlenecks affecting the sector.
She added that the collaboration aims to strengthen the competitiveness of Kenyan products and sustain their presence in international markets, despite the challenging operating environment.
by Muoki Charles
