EAC States asked to protect cement industry
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By John Oyuke East African Community (EAC) governments have been asked to save the cement industry in the region from collapse. The East African Business Council Executive Director Charles Mbogori petitioned regional governments to treat cement as a sensitive product and levy 35 per cent tariff on imports. "The Common External Tariff (CET) should be pegged at 35 per cent or $50 per tonne, whichever is higher as per the Customs Union Protocol agreement," he said in a statement released on Friday. He said the $50 per tonne tariff was intended to protect the industry from unfair competition from cheaper imports from India, China, Pakistan and Egypt. Mbogori said cheap cement imports from countries with lower production costs would hurt the cement industry in the region unless action is taken. Although CET is classified in three tariff bands — zero per cent for raw materials, 10 per cent for intermediate goods and 25 per cent for finished products — goods considered sensitive often attract a higher tariff. Cement, which fell in this category, was considered a sensitive product with tariff of 55 per cent in 2005. This tariff was to reduce at a rate of five per cent per year capping at 35 per cent this year. Import duty However, in June last year, the sensitive status accorded to the cement sector was removed, with import duty being reduced from 40 per cent to 25 per cent. And even as East African cement producers grapple with increased influx of cheap cement imports, Uganda wants it cut further from 25 per cent to zero. Ugandan Minister of Finance Syda Bbumba recently petitioned her East African finance ministers, during the EAC Extra-Ordinary Meeting, to reduce CET on imported cement to zero per cent to lower costs of construction.