East African ministers have licensed 17 more Kenyan firms to import 117,500 tonnes of industrial sugar under preferential terms over the next one year amid rising demand for beverage and confectionery.
The region’s council of ministers chairperson Harrison Mwakyembe said the firms will import the sugar at preferential duty rate of 10 per cent under the East Africa Community (EAC) duty remission scheme.
The latest round of licences come just months after four other Kenyan firms were in April granted permission to import 30,500 tonnes of industrial sugar under preferential terms over a one year period.
The biggest beneficiaries of the EAC ministers’ latest gesture are Kenafric Industrafies, Nairobi Bottlers and Kenya Breweries who have been allowed to ship in 29,000, 26,000 and 20,000 tonnes of industrial sugar respectively. Industrial sugar is an essential input for production of various products and is not produced by local sugar manufacturers within the bloc.
Under the EAC’s common external tarrif (CET) regime, raw materials imported into the region attract no duty. Semi-finished goods attract 10 per cent duty while finished goods are charged 25 per cent duty.
The duty remissions scheme allows manufacturers of commodities deemed essential for the EAC economies such as sugar, to import inputs without paying the applicable tariff rate of 25 per cent. Tanzania and Rwanda table sugar exports to the region are currently attracting full duty after they were allowed to import from outside the bloc at a lower rate to cover for production shortfalls.
The EAC council of ministers in June permitted Tanzania to import 100,000 tonnes of sugar at a duty rate of 50 per cent between April and June while Rwanda was cleared to import 70,000 tonnes at 25 per cent for a period of one year.
The council also imposed other conditions aimed at protecting the sugar industries of other EAC economies including Kenya, Uganda and Burundi.
“Rwanda and Tanzania should give first priority by sourcing sugar from partner states that have excess production,” Dr Mwakyembe said in an EAC gazette notice.