Comesa to rule on Kenya bid for 2-year sugar imports extension limits Saturday

Kenya will on Saturday know whether the Common Market for Eastern and Southern Africa (Comesa) will approve its application seeking a further two-year extension of sugar import limits from a regional trade bloc to give it more time to overhaul its ailing sugar sector.

The intergovernmental committee, a technical wing of Comesa that is meeting in Madagascar, has recommended that Kenya be given a two-year extension to limit the amount of sugar that comes into the country from member states.

But the final decision on curbing the imports remains in the hands of the Council of Ministers that will meet on Friday and Saturday in Madagascar.

They will decide whether to reject Nairobi’s application or reduce the extension period sought given that Kenya has exhausted the allowable maximum limit of 10 years for capping cheaper imports.

Trade principal secretary Chris Kiptoo noted that the technical team had already reached consensus on the extension of the safeguards and was awaiting a ministerial decision.

“It is true that the technical team has recommended a two-year extension to safeguard our sugar industry, but this decision can only be authoritatively confirmed after it has been approved by the Council of Ministers,” said Dr Kiptoo.

“The media erred by creating impression that we got the extension. Yes, we made progress…so we can only authoritatively confirm after the summit meeting,” he added.

The Council of Ministers comprises trade ministers from 19 Comesa member countries.

The latest arrangement capping cheaper imports from Comesa was scheduled to expire in February. Kenya has sought extensions on import restrictions more than five times.

The expiry of the quota tariffs in February will expose the Kenyan market to stiff competition from sugar made cheaply from within the trading bloc.

READ: Sugar imports rise 67pc on low output from local factories

Kenya produces about 600,000 tonnes of sugar a year, compared with annual consumption of 800,000 tonnes. The deficit is covered by strictly controlled imports.
Experts have blamed the high cost of production for the problems facing Kenya’s sugar industry. Poorly funded government factories have aging machinery prone to break downs. Kenya produces a tonne of sugar at $800 compared to countries like Egypt at $500.
Agriculture and Food Authority (AFA) director-general Alfred Busolo, who is leading the Kenya sugar delegation, says that they are pushing for the two- year extension to allow the country to put its house in order. “We want to use the extension of the safeguard to agree on privatisation road map and court issues on the same. We also want to use this period to implement a seed cane policy on improved yields and policy,” said Mr Busolo.
Kenya is required to, among other things, privatise State-owned millers, diversify the revenue chain, transit to using early maturing cane, and move away from the current tonnage-based payment for sugar cane to one that is linked to sucrose content in the cane delivered.