The East African Community is working to promote regional capacity in the car manufacturing industry by taking measures against imports. The measures include locking out duty-free car imports from the Southern Africa Customs Union (SACU), as well as phasing down quotas on commodities.
In a bid to control the level of imports, the region is considering growing the local automotive assembly industries as part of the regional value chain.
SACU and EAC have different opinions regarding the Common External Tariff (CET) on car imports. On the one hand, EAC seeks to maintain the 25% tax, whereas the South African Customs Union (SACU) wants to waive the duty. Proponents from the EAC believe that the fee is necessary to protect local players and drive the regional value chain.
“We have agreed to discuss the sector in terms of the regional value chain and not liberalization of motor vehicles coming from SACU,” Kenya’s Principal Secretary in the Department of Trade Chris Kiptoo.
A review of the age limit for car imports.
Cutting down on imported cars includes revisiting the age limit of second-hand cars to East Africa. Currently, Kenya allows imports of up to 8-year-old second-hand vehicles. On the other hand, other players in EAC have lower limits. Uganda has an age limit of 15 years, whereas Tanzania maintains an age limit of 10 years.
East Africa seeks to develop its capacity to suit its car needs. Last year, leaders at the EAC advised cuts on the importation of used vehicles to boost local competitiveness.
Earlier this year, Kenya proposed to cut the age limit for car imports from 8 to 5 years, under the Draft National Automotive Policy. At the same time, the policy statement proposed a total ban on the importation of used full-body units.
“Towards this, the age limit of imported passenger vehicles will be progressively raised, to expand the market for locally assembled vehicles… This will be implemented from 8 years to 5 years in 2019; from 5 years to 3 years in 2021 and; from 3 years to zero in 2023.” added the Draft policy.