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State to stop imports of used cars in five years

BUSINESS NEWS
By Wainaina Wambu | January 26th 2021
Drivers off-load imported cars from the MV Grand Venus soon after the ship docked at the port of Mombasa loaded with more than two thousand motor vehicles in 2019. [File, Standard]

The government plans to phase out the importation of second-hand vehicles by 2026 in an effort to grow the local car assembly industry.

This is among several measures planned by the Industrialisation ministry to streamline the motor assembly sector.

In the Draft 2021 Budget Policy Statement released yesterday, the Treasury noted that second-hand car models make up more than 85 per cent of the imported fully built units (FBUs) in Kenya.

“The government, through the Ministry of Industrialisation, drafted the National Automotive Policy to streamline the motor assembly industry with the ultimate goal of phasing out the importation of second-hand vehicles by 2026,” said the Treasury in the draft Budget paper.

“The policy also aims at spurring growth in local car assembly as it prescribes clear measures to promote utilisation of locally manufactured products, local content, sub-contracting, innovation, research and development, capacity and skills development and training, and technology transfer.”

VALUE ADDITION

The draft 2021 Budget statement lays out the country’s development plans for the financial year that begins on July 1, 2021. The Treasury said the automotive policy would create jobs for the youth, enhance local value addition and help raise the manufacturing sector’s contribution to the economy. Last week, Trade CS Betty Maina said Sh600 million has been set aside to purchase locally assembled or manufactured vehicles as part of the government’s economic stimulus plan to fight off the effects of Covid-19.

Further, according to the draft 2021 Budget, the manufacturing pillar under President Uhuru Kenyatta’s Big Four Agenda would continue to offer the “necessary training ground” for youth to acquire skills.

“In order to hasten the process of shifting the youth from wage earners to owners of capital, the government, through this pillar, is developing productive capabilities to necessitate their movement from rudimentary to complex operations,” said the Treasury.

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