Imports sourcing talks to start as virus cuts off China

By Constant Munda

Top government and private sector officials will hold a series of meetings starting this week to explore alternative source markets for supplies in the wake of deadly Covid-19 outbreak that has cut off imports from China.

Trade and Finance ministries will lead the talks. Kenya’s market is shielded by, among other things, tariffs and import quotas that may need to be reviewed to make imports from alternative sources such as African markets affordable.

Asked whether the Treasury will consider waiving duty on imports from alternative markets, Julius Muia, the Treasury principal secretary said: “We haven’t decided how the government will come in. What we will come up with will be in the best interest of our local industry in terms of ensuring we have inputs at best prices possible.

But we are not looking to interfere with the market because it determines a lot of things.”

A significant share of goods on the shelves of retail stores in Kenya are shipped in from China and other Far East countries because of their competitive prices.

Manufacturers have started feeling the cost pressures as a result of shortages of raw materials and intermediate goods after China put factories on a lockdown to manage the highly contagious disease, according to a closely watched monthly survey.

A dry up of stocks could hit consumers hardest.

On Friday, Health Cabinet Secretary Mutahi Kagwe said the meetings will explore ways to cushion the economy from looming stock-outs.

“Part of the reason we are holding the meeting is to ask ourselves those very questions: What’s the alternative source of some of the materials that we may be getting from China? What’s does the government need to do to stimulate the economy in the face of this obvious economically challenging situation that’s facing us?” Mr Kagwe told journalists in Nairobi.

Increased prices of some goods in February saw companies report a monthly drop in new orders for goods last month for the first time since November 2017, according to Stanbic Bank Kenya’s Purchasing Managers Index.

This article originally appeared in Business Daily.