Lawmakers will debate on the reduction of export promotion levies on key steel imports, as proposed in the Finance Bill 2025, signalling a shift in the government’s strategy to bolster local manufacturing, and curb rising production and construction costs.
- •The Export Promotion Levy, introduced in 2023 to discourage imports and spur local steel production, had placed a 17.5% charge on a range of steel products.
- •However, the government now appears to be recalibrating its approach, prioritizing affordability and access to critical inputs for its construction and manufacturing sectors.
- •The proposed changes will reduce levies on semi-finished and semi-processed steel products from 17.5% to 5%.
Under the revised rules, semi-finished products of iron or non-alloy steel—specifically those with a rectangular cross-section where the width is at least twice the thickness—will see their levy drop to 5%.
Similarly, semi-processed steel items, including hot-worked bars and rods and hot-rolled flat products of iron or non-alloy steel, will also benefit from the reduced 5% rate.
Local manufacturers often rely on imported semi-finished steel to produce goods, as domestic capacity remains limited. Steel remains one of the most expensive construction materials, edging above the 150 cost index in the Construction Input Prices Indices released by the Kenya National Bureau of Statistics (KNBS).
The slashing of the levy in the Finance Bill 2025 for steel imports will also reduce costs for the government’s Affordable Housing Program. The state recently released 5,000 units to the public on the first phase of the project, with the government citing that half a million Kenyans had staked interest in occupying the units.
