Call for reforms as Kenya's steel industry operates below capacity amid rising imports

The industry has an installed production capacity of 4.2 million tonnes but continues to rely heavily on imports. In 2025, Kenya imported about 1.66 million tonnes of iron and steel products while exporting approximately 197,000 tonnes.

Speaking during the East African Steel Summit in Nairobi on Monday, Kenya Association of Manufacturers (KAM) Chief Executive Tobias Alando said the sector's low capacity utilisation is driven by the high cost of raw materials and production, declining exports of finished steel products, competition from cheap imports and unpredictable tax policies.

Alando said expanding local production would reduce Kenya's dependence on imported steel while strengthening local value addition and supply chains that support sectors such as construction, transport and energy.

"Despite the capacity we have built over the years, Kenya continues to import substantial volumes of steel products. This presents an opportunity to expand local production, deepen value addition, strengthen local supply chains and reduce our dependence on imports," Alando said.

Demand for steel is expected to grow as Kenya continues to invest in affordable housing, roads, railways, ports, industrial parks and energy projects. Manufacturers also see opportunities to expand into regional and international markets through the African Continental Free Trade Area (AfCFTA), COMESA and the Kenya-European Union Economic Partnership Agreement.

However, industry players say the sector will only be able to take advantage of those opportunities if challenges such as high energy costs, limited access to affordable financing, regulatory uncertainty, low-cost imports and the entry of substandard products are addressed.

KAM Metal and Allied Sector Chairman Bobby Johnson called for stronger enforcement of quality standards and closer cooperation among East African Community partner states to curb the circulation of substandard steel products.

"Harmonized standards that are fairly and consistently enforced across the East African Community will protect consumers, support manufacturers that comply with the law and strengthen the regional steel industry," Johnson said.

The two-day East African Steel Summit brought together manufacturers, processors, traders, policymakers, financiers and other stakeholders to discuss production, trade, technology, investment and sustainability in the regional steel industry.