State says import levy saw creation of 16,000 jobs, 11 steel factories

The introduction of an export and investment promotion levy in the Finance Act of 2023, is said to have facilitated the reopening of 11 steel millers - further creating 16,000 jobs.

The National Treasury, in the draft Budget Policy Statement, says the levy imposed on imported clinker saved the economy Sh20 billion in foreign exchange. Clinker is a key ingredient in cement manufacturing.

The statement notes that the government plans to ringfence the gains from these milestones to grow the construction sector, which is key to President William Ruto's affordable housing programme.

This will be done over the medium term as it lays focus on micro, small and medium enterprises (MSMEs).

The statement said the government has continually supported building and construction value chains to boost job creation and foreign exchange earnings. This has been done with MSMEs in mind to attract investments in affordable housing.

"To accelerate local manufacturing, the government imposed levies on the importation of clinker, saving the country Sh20 billion in foreign exchange, as clinker imports dropped to zero," the statement says.

"The government also imposed levies on imported steel billets, enabling 11 steel factories that had closed in the past six years to come back into operation, now hired 16,000 workers and saved Sh110 billion in foreign exchange."

National Treasury says over the medium term, the government will consolidate the gains realised by continuing to support the establishment of an industrial park for construction materials.

It will also enhance local manufacturing of construction materials (clinker, cement, cabros, prefabs) and electrical and electronics fittings, cables and products, and ring-fence certain components of the low-cost housing project for MSMEs.

"Value addition will be enhanced through stimulating domestic investment into housing and construction sectors, modernisation of East Africa Portland Cement Company, promotion of alternative building technologies, establishment of heavy clay plant and promotion of cottage construction industries," the statement says.