Kenya imposes new levies on grain imports, sparking fears of price rises

Kenya has slapped a two percent levy on cereal imports, which could lead to an increase in the prices of maize, rice, and wheat.

In a notice by the Agriculture and Food Authority (AFA), the government has also imposed a two per cent levy on the customs value of imports of legumes and pulses, including beans, lentils, soybeans and peanuts, and a one per cent levy on imported roots and tubers, including potatoes, cassava, sweet potatoes and yams.

The levies will take effect on July 1.

“The authority, through the Food Crops Directorate, hereby notifies food crop importers and exporters that starting July 1, 2024, the imposition of levies will commence as provided for in regulation 37 sub-regulations (1) to (8) of the Crops (Food Crops) Regulations, 2019,” AFA Director-General Bruno Linyiru said in the notice.

Food crops

The regulations mandate AFA to impose a levy, which is to be paid by traders “not later than the 10th day of the month following the month during which the levy fell due”.

According to the regulations, the levy will be used to fund the operations of AFA, develop the food crops sub-sector and “such other purpose as may be approved by the authority”.

Traders that fail to pay the levy face an interest rate of 25 per cent on the outstanding amount for the first month of default.

Thereafter, the traders will be charged a compound interest of 12 per cent on the arrears.

The levy is a blow to consumers who already are paying high prices for food items amid soaring production costs and shortages.

Unmilled wheat

Kenya is a net importer of food, primarily maize, rice and wheat, with local production lagging way behind demand by a rapidly growing population.

Last year, for instance, Kenya imported two million tonnes of unmilled wheat, 937,098 tonnes of rice and 507,932 tonnes of unmilled maize, according to the 2024 Economic Survey.

“In 2023, import volumes for food rose significantly, except maize. The increase was largely driven by high demand for food to alleviate hunger, following a prolonged drought in the first half of 2023 that affected domestic production,” the Kenya National Bureau of Statistics said.

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