Local manufacturers decry high cost of production in Kenya

Local manufacturers have decried high cost of production in Kenya in comparison to regional peers.

The manufacturers say locally manufactured goods are more expensive compared to imported goods due to the high cost of production in the country.

Speaking during the third Kenya Manufacturing Summit, the Kenya Association of Manufacturers CEO Phylis Wakiaga said Kenya is 13 per cent cost disadvantaged compared to other countries hence the cognition for having more expensive goods.

Wakiaga further added that the government needs to cut the cost of energy and also cut railway development levy to help subsidize costs for local manufacturers.

“As manufacturers we have seen where the cost of manufacturing is building up first the cost of energy in the country is quite high, the cost for raw materials is also high and further the import declaration fee is also high,” said Wakiaga.

This comes after local manufacturers asked the government to lower energy tariffs leading to a presidential demand that the tariffs are lowered; however, not much came out of the deal.

The manufacturing industry targets to grow to 15 percent in the next six years, despite the challenges the sector is facing. However, until now the sector has only been growing at below 5 percent.

Currently, the Kenyan market is awash with a lot of imported products which informs the manufacturers concerns that for the government to achieve her manufacturing milestones, which leverages on the Buy-Kenya Build-Kenya moniker, incentives to lower the cost of products must be instituted.

Trade Cabinet Secretary Peter Munya said the government is working on new legal and regulatory policies which will address cost of production.