Millers have said plans by Agriculture Cabinet secretary Peter Munya to suspend all levies imposed on imported maize in pursuit of lower cost of the staple will only cut the price of flour by Sh2 for a two-kilo packet.
United Grain Millers Association (UGMA), an umbrella body of small and medium-scale millers, says the move is so insignificant that it will not have any impact on consumers.
Speaking at the Namanga border on Tuesday, Mr Munya said the government will gazette a directive by end of Thursday that will suspend the levies imposed on imported maize in a bid to lower the cost of flour that is now retailing at Sh210 for a two-kilo packet.
Imported maize is levied Sh100 for a 90-kilo bag, with a single bag giving 36 packets of two kilos when milled, meaning that suspending the levies will only cut the cost by Sh2.7.
The government through different agencies charges levies that comprise the Certificate of Conformity fee levied by the Kenya Bureau of Standards, the phytosanitary fee charged by the Kenya Health Inspectorate Service, and the Import Declaration Fee imposed by the Kenya Revenue Authority.
“The move is so insignificant, we need a serious government intervention on making the maize available in order to cut down significantly on the cost of flour,” said UGMA chairman Ken Nyaga.
Mr Munya said the current levies charged on maize have made the grain expensive when it gets to the country.
“We have decided to suspend all levies imposed on imported maize by 90 days that is coming to Kenya from any border post and from July 1, no charges will be levied on maize,” said Mr Munya.
Mr Nyaga said the government should open direct talks with countries like Tanzania, Zambia, and Malawi, which are currently the source market for maize imports, to abolish export permits and other border-related fees that have made the grain expensive.
“If we can have direct government talks to scrap export permit levy, then the price of maize will come down and this will impact on the cost of the final product,” he said.
The Tanzanian government last week doubled the cost of export permits by 93 percent. The authorities increased the cost of acquiring an export permit from Sh27,000 per truck previously to Sh52,000 currently according to border officials.