Agriculture, food import bills in Kenya, Nigeria surge due to dwindling local supply

KENYA – Kenya’s enhanced importation of grain and cereals to cover for production shortfalls locally on the back of late planting in the main crop season and a weakened local currency against the US dollar, has led to surge of the import bill.

For instances maize imports from Uganda and Tanzania in the first five months of the year jumped nearly two-fold to cross 1.38 million 90-kilogramme bags from 495,813 bags last year, according to the Ministry of Agriculture’s data.

Wheat imports in the January-May 2021 period also increased 12.30 percent to 9.1 million 90-kg bags from 8.1 million bags last year, while rice volumes bumped 92.71 percent to 2.4 million 90-kg bags from nearly 1.25 million bags.

A similar trend was witnessed in beans imports, which climbed to 287,031 bags in the review period from 215,014 bags, a 33.49 percent growth, the ministry’s data shows.

According to reports by Business Daily, import data tracked by the Kenya Revenue Authority (KRA) shows traders ordered food including live farm animals for slaughter and breeding and beverages, valued at Ksh103.34 billion (US$942 million) between January and June this year.

This is Ksh12.35 billion (US$112 million), or 13.57 percent, more than the Ksh91 billion (US$830 million) that was spent on food imports in a similar period last year, according to the data collated by the Kenya National Bureau of Statistics (KNBS).

The expenditure on food imports in the half-year period is even higher than the Ksh96.41 billion that was spent in the first half of 2017 when a biting drought hurt crop and fodder production hit —triggering a national crisis that forced the Treasury to allow subsidies and waiver of import duties to smooth purchase of key food items such as maize, rice and milk powder from abroad.

Meanwhile in Nigeria, the foreign exchange supplied by the Central Bank of Nigeria for the importation of food products into the country rose by 23.81 per cent to US$1.04 billion in the first half of this year, compared to the same period of 2020.

Although the President, Major General Muhammadu Buhari, had in September 2020 directed the CBN to stop issuing forex for food and fertiliser imports, forex utilization of food imports accounted for about 10.34 per cent of the US$10.05 billion utilised for imports in the country in H1 2021.

The apex bank, in June 2015, excluded importers of 41 goods and services, including some food products, from accessing forex at the country’s forex markets in a bid to conserve the external reserves as well as encourage local production of those items.

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In December 2018, the CBN included fertiliser on the list of 41 items classified as ‘not valid for foreign exchange’ in the Nigerian forex market.

Later in July 2019 it restricted the sale of forex on the importation of milk and was recently considering halting foreign currency for sugar and wheat imports.

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