News and knowhow for farmers

Increased transport & permit costs hinder Kenya’s agriculture imports

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By George Munene

As Kenya seeks to increase maize, sugar, and wheat imports to reduce rising costs and tackle food insecurity, rising permit costs and transportation, a dollar shortage, and delayed clearance at border points are reducing the ease of doing business for traders.

Tanzania has increased the cost of export permits by 93 per cent. The authorities in Tanzania have increased the cost of acquiring export permits from the previous Sh27,000 per truck to Sh52,000, according to border officials.

Transport costs of maize from the source markets has increased by 150 per cent resulting in transporters charging the equivalent of Sh1,500 from Sh600 previously for a single bag of maize transported from either Malawi or Zambia. This has pushed the landing cost of a 90-kilo bag in Nairobi to Sh6,000.

The Kenya Association of Manufacturers has for its part expressed worries over the prevailing dollar shortage. Members who mainly rely on imported raw materials, it claimed, cannot access dollars at the official market rates.

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According to a report by the Alliance for a Green Revolution in Africa (AGRA), delayed pre-arrival clearances by the Kenya Revenue Authority (KRA) is causing traffic queues at border points reducing the ease of doing business for traders.

Increased exports to Kenya have also forced the Tanzania Revenue Authority to post its officials to Mombasa and Nairobi to facilitate the pre-arrival clearance of goods.

Tanzania has imposed a new requirement on grain traders to get an export permit before shipping maize out of the country, in a policy shift that has locked already bought stocks of grain by Kenyan millers at the border.

Kenya and Uganda are staring at another round of trade wars after Nairobi reintroduced a levy on eggs imported from the neighbouring country. Uganda says Kenya is now taxing its eggs at a rate of Sh72 a tray.

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Importers and exporters in Kenya are however set to benefit from increased competitiveness and reduced cost of doing business from reduced shipment delays and demurrage charges after President Uhuru Kenyatta assented to the National Electronic Single Window System Bill, 2021, on June 21.

The government has also embarked on a sensitization campaign countrywide to create awareness amongst the business community on the opportunities offered by the African Continental Free-Trade (AfCFTA), and how to exploit the openings offered.

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