The Kenya Association of Manufacturers (KAM) on Wednesday, April 12, gave demands to President William Ruto in a bid to end an ongoing stalemate in the sector.
The Edible Oil sub-sector, under the KAM Food, asked the Kenya Kwanza administration to protect them from cheap imports.
While making reference to the Kenya National Bureau of Statistics (KNBS) 2022 Report, the manufacturers stated that KAM Food contributed an estimated 2.1 per cent revenue to Kenya’s overall share of manufacturing Gross Domestic Products (GDP).
As such, the manufacturers urged Ruto's government to put in place measures that will cushion them from cheap imports of edible oil.
"With duty-free importation there is a risk of industry closure due to the uncompetitiveness of local manufacturers.
"This will mean loss of approximately 100,000 jobs as well as loss of government revenue arising PAYE and corporate tax," KAM stated.
In a meeting with the Principal Secretary at the Ministry of Trade, Dr Juma Mukhwana, KAM noted that government's directive that allowed duty-free importation of edible oil was hurting local manufacturers.
The manufacturers also claimed that the directive was going to negatively hit the country's economy since the biggest beneficiaries were foreign nations.
"Kenya has a vibrant Edible Oil Processing industry made up of 13 manufacturers with a combined installed production and processing capacity of approximately 2 million Metric Tons per year," KAM stated.
The conglomeration told PS Mukhwana that Kenyan manufacturers refine edible oils from a crude form into finished form, including palm oil, rapeseed oil, sunflower oil, corn oil and soybean oil.
Some of the challenges facing the edible oil sector were supply chain disruptions, trade issues, quality and environmental concerns.
KAM also presented raised concerns on the decision allow importation of finished edible oils.
"This will have far-reaching implications to the economy, with minimal to no impact on price stability as intended," KAM warned the government.
In his response, Dr Mukhwana assured the traders of setting up systems that will not relent to ensure the supply chain disruption is addressed.
"A system that will serve the interests of everyone," PS Mukhwana assured KAM.
On February 22, Treasury announced plans to Import 125K MT of duty-free edible oils.
Through the Kenya National Trading Corporation (KNTC), the government noted that the importation would cushion consumers from skyrocketing basic commodity prices.
In 2022, the World Bank data showed that Kenya's unemployment stood at 5.6 per cent as compared to other nations like the US at 5.3 per cent, South Africa at 28.8 per cent, Tanzania at 2.7 per cent and Rwanda at 13.3 per cent. By Mark Obar, Kenyans.co.ke
