Tax cut on wheat imports good for Kenyans

Consequently, this policy resulted in high consumer prices for Kenyan wheat products with cheaper Tanzanian wheat flour getting into the local market.

In addition, under the Comesa trade regime, wheat from Egypt and Mauritius is imported into Kenya duty-free, a factor that is disadvantageous to our millers since it makes them vulnerable, exposing them to unfair competition because wheat grain is imported with duty pegged on it while wheat flour is imported duty free. 

As a result of these disparities, large quantities of flour have been imported into Kenya from neighbouring countries resulting in disinvestment in the milling industry and eventually loss of major export markets such as Rwanda, Burundi and Eastern Democratic Republic of Congo.

This trend has negatively affected Kenyan millers resulting in a decline in capacity utilisation and relocation to Tanzania, Uganda, and Rwanda.

Relies on imports

In view of the foregoing, it is the opinion of the Kenya Association of Manufacturers that tariff reduction on wheat is good for local consumers as our country relies a lot on imports.

The government should actively pursue policies that make food more affordable.

Kenyan consumers should thank Mr Kenyatta and urge him to remain steadfast in the quest for cheaper food.

This does not, however, mean that we are insensitive to the needs of farmers and their desire for higher farm-gate prices in an environment of high farm input and operational costs that make it expensive to produce crops.

We recognise this fact, but it should be remembered that the price of grain makes up 70 per cent of the price of flour.

Care must be taken to reduce the price of flour by reviewing factors that make grain production in Kenya expensive. 

Imported wheat is not one of the causes of high production costs.

It will be myopic of the government to reintroduce high tariffs on wheat because the taxes hurt the poor most.

Maina is chief executive, Kenya Association of Manufacturers.