The Trade ministry has officially terminated its plans to repeal the controversial 17.5 percent levy on imported clinker, ending a push-pull with President William Ruto, who had opposed proposals to scrap the controversial tax.
Trade Cabinet Secretary Lee Kinyanjui, said the ministry has dropped earlier plans to repeal the levy, citing improved local production of the raw material used for manufacturing cement.
‘It did not go through (petition for repeal) because we were time- barred when the Finance Bill came, but it appears it may have been overtaken by events. It could mean because of the many companies that have invested in building clinker. We have like four of them already there.
“So somehow the industry is aligning to that reality. The initial inconvenience was very heavy, but it is aligning itself,’ he told Business Daily in a phone interview.
‘The point is that the country is adapting to local production of clinker, and companies are aligning in that direction, which is a good thing because it is saving on the forex. If you look at the total volume of imported clinker, maybe as of today the number has come down, so it is part of what we call import substitution strategy,’ he said.
The government introduced the 17.5 percent levy on the importation of clinker in the country in July 2023, rattling the cement sector with clinker imports falling from 148,000 tonnes in 2023 to 10,300 tonnes in 2024.
The ministry had previously petitioned for the removal of the export and investment promotion levy on imported clinker, arguing that relying on heavily protected raw materials skewed industry competition and choked independent manufacturers who lacked the internal grinding capacity for clinker, a raw material used in the manufacture of cement.
The ministry’s position, however, had contradicted President Ruto’s, who, in December 2025, indicated that he was not persuaded that Kenya lacks enough capacity to produce its own clinker.
Speaking during the signing of a Sh32 billion ($250 million) deal between Bamburi Cement and Sinoma CBMI Construction for the construction of a clinker plant in Matuga, Kwale County, the President maintained that Kenya has enough limestone to be used for the manufacture of clinker, a crucial raw material in cement production.
‘We have limestone, we have all other raw materials that are necessary for the production of cement here in Kenya. Somebody needs to explain to me why we want to go and import stones,’ President Ruto said.
In a change of tune, Mr Kinyanjui now says plans to repeal the levy have been overtaken by events.
The CS said that local production of clinker is part of the country’s import substitution strategy aimed at preserving the economy’s forex reserves and has also created an industry that was not there before.
‘The issue of import substitution is a way of reducing hemorrhage on the economy. So all other products we want to see how we can localise them; there is also localisation of raw materials, which is now the case of clinker, and adding value to it,’ he says.
He says the situation has changed from the time the ministry wanted to review the levy, with fresh details showing that the imposition of the levy has created an industry (clinker manufacturing) that was not there before.
‘At the time we wanted to change it (17.5 percent levy), our feeling was it should increase the cost of production in the short run and at the same time we were running the affordable housing programme, and you know you don’t want to say you are running an affordable housing programme while your cement is getting more expensive. So that was the real concern,’ he says.
‘… it took a bit long because you know parliamentary procedures and all those things, but looking at it in terms of its impact it has created an industry that was not there before which we need to build on now.’
In October last year, Mr Kinyanjui said the Executive would petition Parliament to repeal the 17.5 percent export and investment promotion levy on clinker and steel, noting that it had unintended effects on companies in these critical sectors.
‘We are currently charging 17.5 percent for anybody who imports clinker, yet we don’t have enough local clinker,’ he said.
‘So, many of our cement factories are operating sub-optimally because they don’t have enough clinker, and the people who have clinker sometimes refuse to sell to them because they’re also competitors,’ he added.