Clinker imports dip 93pc as construction sector growth slows

Imported clinker is loaded onto a Standard Gauge Railway train in Mombasa. [File, Standard] Kenya's cement clinker imports dropped 93.1 per cent last year amid contraction in the construction sector over the period, new data shows. According to the 2025 Economic Survey, the amount of clinker imported stood at 10.3 million tonnes compared to 148 million tonnes in 2023. Imports of the critical component in the manufacturing of cement have been on a downward trend, having fallen by 77.4 per cent in 2023. A year earlier, in 2022, the amount of clinker imported into the country stood at 656.5 million tonnes. In the latest report, the value of imported clinker dropped to Sh74 million compared to 2020, when it was Sh8.6 billion. In 2023, this figure stood at Sh1.1 billion. The amount of clinker imported in 2020 stood at 2.0 billion tonnes. This drop in the importation of the raw material also affected Kenya's balance of trade with Uganda, which is the country's leading business partner. "Exports to Uganda, Kenya's leading export destination in Africa, decreased from Sh126.3 billion in 2023 to Sh125.9 billion in 2024. This decline was largely attributable to a decline in domestic exports of cement clinker and palm oil to this destination," says the KNBS. The government in the Finance Act, 2023 imposed a 17.5 per cent export and investment promotion levy on imported clinker in a bid to grow local industries with the capacity to produce the same. "This initiative is not just about protecting jobs and safeguarding local industries but about laying the foundation for a more resilient and competitive economy that can thrive in the global marketplaces," said then Investments, Trade and Industry Cabinet Secretary Rebecca Miano. Kenya Association of Manufacturers (KAM), however, protested the move. As a result of the slowdown of clinker importation, the latest KNBS numbers also show cement production declined from 9.6 million to 8.9 million tonnes. "Similarly, cement consumption and stocks declined from 9.1 million to 8.5 million tonnes in 2024," the report says. This is a drop of 7.2 per cent metric tonnes. As a result of this slowdown in production and consumption of cement, the construction sector saw a negative growth of 0.7 per cent in 2024 compared to 3.0 per cent in 2023. "The contraction in construction activities was evidenced by a significant decline in consumption of cement," the report explains. "There was reduced momentum in both public infrastructure projects and private sector developments that signalled a period of adjustment for the industry. While input costs began to stabilise, structural constraints such as limited access to affordable financing and subdued investor confidence continued to impact the sector's growth." Importation of steel and iron also went down during the period. "Similarly, the volume of imported iron and steel decreased by 8.9 per cent to stand at 1.1 million tonnes in 2024," the report says. "The quantity of iron and steel exported in 2024 declined by 12.6 per cent to 171,300 tonnes following the introduction of an export and investment promotion levy on steel exports." The value of cement exported in 2024 stood at Sh4.5 billion compared to Sh6.0 billion in 2023. Exports of iron and steel also went down to Sh26.7 billion in 2024 compared to Sh32.3 billion in 2023. Loans and advances by commercial banks to the sector also dropped to Sh528.0 billion in 2024 from Sh602.7 billion in 2023. This is the lowest in the last five years. "Credit advanced to the building, construction and real estate sectors decreased from Sh602.7 billion as at December 2023 to Sh576.3 billion as at December 2024," the report adds. Private employment in the sector also saw a drop to 223,400 in 2024 from 226,300 in 2023. However, the situation was different for the public sector, with employment increasing to almost 10,000. "Public employment in the construction sector increased from 9,700 employees in 2023 to 9,900 employees in 2024," says the 2025 Economic Survey. Due to these challenges, the average annual inflation in the construction sector went up to 2.83 per cent in 2024 from 2.30 per cent in 2023. However, this is fairer compared to 7.48 per cent in 2022. The contraction in the construction sector was also evidenced by a reduced number of units completed by the National Government under the State Department for Housing and Urban Development. This figure went down from 3,357 units in 2023 to 1,655 in 2024. "The estimated government expenditure on housing for 2024/25 is Sh86.5 billion, which is 10.6 per cent higher than that of 2023/24," the report says. The drop can be linked to less utilisation of the allocated budget for affordable housing. "The utilisation rate of budgeted funding was 32.6 per cent in 2023/24 compared to 86.8 per cent recorded in 2022/23," the report explains.

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