Government suspends renewal of scrap metal importation licenses

Evans Nganga Chairperson, Knight Scrap Metal Association before the National Assembly's Trade Commiitee. November 27, 2024. [Elvis Ogina, Standard] The government has announced the immediate suspension of scrap metal import license renewals, citing growing concerns over the impact on the domestic industry. In a statement on Friday, the State, through the Scrap Metal Council, responded to calls from industry dealers who have long advocated for a halt to the importation of cheap metal. "The Scrap Metal Council hereby suspends all renewals of scrap metal import licenses until further notice," said the Council chairperson, Francis Mugo. This move is aimed at curbing the rising influx of imported scrap metal, which industry experts say has been undermining the local scrap market. According to local traders, the growing preference for foreign scrap metals has adversely affected the industry, with the government now acknowledging the challenges. "These rising imports have disrupted the local scrap metal industry, as steel manufacturers are increasingly preferring imported scrap over locally available materials," the council noted. In response to mounting pressure from local collectors and recyclers, the council says it will initiate consultations with stakeholders to explore sustainable solutions that support both industry needs and the local economy. "The council will engage in consultations with key industry stakeholders and steel manufacturers to determine the best course of action to address the concerns raised," the statement read in part. The suspension follows a request by Knight Scrap Metal Association national chairperson, Evans Ng'ang'a, who urged President William Ruto to address their concerns during the May 1 Labour Day celebrations. "We will be celebrating Labour Day like other Kenyans, but we urge President William Ruto to stop over-taxation and focus on reducing taxes to help us create more employment opportunities," he said on Wednesday. Speaking again on Friday, Ng'ang'a added "We welcome the Scrap Metal Council's decision to halt the Importation of cheap metal. It is a positive step that will help boost local job creation." This is a great move that will ensure we also create jobs locally," said Ng'ang'a. Ng'ang'a noted that the metal recycling industry is a source of employment for many Kenyans, and that abandoning the sector would plunge many families relying on it into financial distress. "The industry feeds many families, pays school fees to many children whose lives and future will be disoriented when we close shop," he stated. He said, "We ask the government to introduce a dumping duty for imported scrap metals." Currently, he said that the importers only pay Value Added Tax (VAT). Ng'ang'a also wants the tax on imported metal finished products capped at 25 per cent from the current 17 per cent. "The government should be considerate in lowering the scrap metal licenses that are commensurate with the industry. Right now, we are charged Sh250,000," he stated. He said the association will hold a general meeting on May 21 to harmonise the issues bedeviling the industry.

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