KENYA – Kenya has taken a significant step towards bolstering its industrial sector as eight local firms receive clearance to import 43,000 metric tonnes of sugar under a special tax scheme facilitated by the East Africa Community (EAC).
This move, announced by Deng Alor Kuol, Chairperson of the EAC Council of Ministers, aims to support the production of various industrial products, including soda, milk drinks, and chocolate.
Under the EAC-wide duty remission scheme, all sugar-based products manufactured in Kenya are reliant on imported industrial sugar, which typically attracts a payable duty rate of 10 percent.
Deng Alor Kuol emphasized the importance of this initiative, stating, “A remission of import duty is approved for Kenya for the following manufacturers on the specified quantities of sugar for industrial use to apply a duty rate of ten percentum for 12 months.”
Among the recipients of the clearance, Coca-Cola Beverages Kenya Limited received approval to import 20,000 tonnes of industrial sugar, primarily designated for carbonated drinks and juice production.
Equator Bottlers also secured clearance for 10,000 tonnes, while Trufoods Limited, among others, was granted approval for varying quantities to be used in the production of jams, marmalades, sauces, spices, and chocolate.
The importation of industrial sugar under the EAC remission scheme is subjected to stringent regulations. Every Kenyan manufacturer must be registered and maintain their registration with the sugar directorate.
Additionally, manufacturers must be gazetted under the EAC Customs management Duty Remission Scheme, unless they exclusively import sugar from Common Market for Eastern and Southern African (COMESA) member states.
The clearance process involves engaging with suppliers, obtaining a pro forma invoice, and applying for pre-approval from the sugar directorate for each shipment of refined sugar, irrespective of its origin.
Furthermore, manufacturers importing refined sugar from outside of COMESA must seek authority from the National Treasury for each separate shipment.
These import clearances are anticipated to facilitate uninterrupted production across various consumer goods, thus contributing to both the local economy and the broader East African market.
Farmers blame AFA
Meanwhile, a section of sugarcane farmers have expressed their frustrations with the Agriculture and Food Authority (AFA), accusing it of siding with cartels to exploit them.
The farmers cited a recent announcement by the interim Sugarcane Pricing Committee that reduced sugarcane buying prices to Kes5,100 (US$38.6) from Sh6,050 (US$45.79) per tonne.
The farmers thanked High Court Judge Eric Ogola for stopping the AFA and Kenya Revenue Authority (KRA) from increasing sugarcane prices and importing more sugar.
Simon Wesechere, secretary general of the Kenya National Federation of Sugarcane Farmers lamented: “It is clear that AFA is working for sugar barons and not farmers because it is only the sugar sector where the price fluctuates more than any other crop, giving a leeway for cartels to import sugar.
Sometimes you spend up to Kes5,900 (US$44.66), or even more, to produce a tonne of sugar, yet you have waited over a year for it to mature. This remains the key reason many farmers abandoned the crop, forcing factories to shut down for four months due to cane shortage last year,”
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