In this country, windows for duty-free import of food can be opened and shut arbitrarily. It seems to me that it all depends on the cartels commanding the strongest political power and influence at any given time.
On May 12, the government put out a gazette notice announcing a free-for-all sugar imports regime that was supposed to run from this month to August 31.
This specific window for duty-free imports of sugar was not only very strange and unusual, suggesting lobbying and influence by a particular cartel of importers who wanted to bring imported sugar into the market as quickly as possible.
First, the gazette notice stipulated that ‘any person’ was allowed to import sugar. What was the significance of the introduction of the phrase ‘any person’ in the context of the gazette notice?
It implied that even unscrupulous importers whose consignments had been held at the port for months - impounded by customs authorities due to disputes over duty payments- were now able to push in their shiploads into the market quickly.
But more significant, the introduction of the phrase ‘any person’ in the gazette notice meant that importers bringing in duty-free sugar under this window did not have to go through registration and licensing.
Yet the law is that you cannot import sugar into the country unless you are registered as a sugar importer by the market regulator, the Kenya Sugar Directorate.
But being on the list of registered sugar importers does not automatically qualify you for a permit since you only get a permit after you have produced documents showing that you have already contracted a supplier and have the money to pay for the sugar you want to import.
In other words, sugar import permits are consignment-specific. Once you bring in a shipment, that specific licence expires. This is the regulatory regime that the crafters of the gazette notice of May 12 had decided to circumvent.
Just how these merchants manage to influence the government to arbitrarily change rules is a statement on how policy shifts at the command of the highest bidder.
The ‘any person’ rule reeks of double standards because in the very same gazette notice of May 12, the government - while allowing free imports of powdered milk - gave conditions such as quantities to be brought in within the window and permits by the market regulator, Kenya Dairy Board.
Registered sugar importers who had already put in orders for imports from Comesa protested that the window opened by the May 12 gazette notice had opened floodgates for cheap brown sugar imports from Brazil and Thailand.
Local sugar millers were up in arms, lamenting that the new duty-free window would kill the local industry.
On Thursday, with the window hardly a week old, I learnt that the government had succumbed to pressure by local millers and had agreed to revise gazette notice of May 12, by removing the phrase ‘any person’ and introducing a requirement that importers must have a permit from the Sugar Directorate.
That new gazette notice was to come out today, Friday. The impression you get is that the window starting on March 12 had been targeted to benefit consignments brought in by specific importers.
With the targeted consignments already accommodated, the window no longer served any purpose. Hence the decision to abruptly amend the rules. How does the consumer gain?
One would expect that the brisk activity in importing sugar would cause consumer prices to come down.
Unfortunately, the sugar business in this country does not respond to import competition. It profits a tiny elite of merchants and their political godfathers.
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