Local manufacturers struggle with rising costs and influx of cheaper imports

Kenyan manufacturers are issuing urgent warnings as a combination of high production costs and an influx of cheap imported goods threatens the survival of local industries. The Kenya Association of Manufacturers (KAM) reported this week that the cost of key raw materials, electricity, and finance has continued to climb, squeezing profit margins to unsustainable levels. Simultaneously, finished products from Asia and the Middle East, often priced lower than locally manufactured equivalents, are flooding the market, taking advantage of existing trade agreements.

The situation is particularly acute in the textile, plastics, and metal fabrication sectors. Factory managers report running at less than 60% capacity due to low demand for their higher-priced goods. This has led to layoffs and reduced shifts in industrial hubs like Athi River and Thika. Industry leaders argue that without immediate protective measures, such as reviewing certain import tariffs and enforcing quality standards on incoming goods, decades of industrial growth could be undone.

The government, through the Ministry of Investment, Trade and Industry, has acknowledged the concerns and stated that a multi-agency task force is reviewing the situation. Proposed solutions include fast-tracking the provision of affordable industrial parks with subsidised electricity, enhancing the “Buy Kenya, Build Kenya” campaign, and providing targeted tax reliefs for manufacturers who invest in energy-efficient machinery to reduce their operational overheads.