Kenya’s recent decision to impose new tariffs on the import and export of cereals, legumes, herbs, and tubers has sparked widespread criticism from local traders.
They argue that these new levies breach regional trade agreements, including those set by the East African Community (EAC) and the Common Market for Eastern and Southern Africa (Comesa).
The Agriculture and Food Authority (AFA) has introduced a 2% levy on the customs value of grain imports and a 0.3% levy on grain exports. Similar charges apply to legumes, while roots and tubers will face a 1% import duty and a 0.3% export levy.
Initially scheduled to take effect on July 1, the AFA postponed the implementation to August 12. The authority claims the new charges are intended to support small-scale local growers by leveling the playing field against imported goods.
The levies will be collected at entry or exit points, and traders who do not comply will incur a 25% penalty on overdue amounts after the first month.
Agayo Ogambi, CEO of the Shippers Council of East Africa, has criticized the levies as detrimental to businesses and an additional strain on farmers.
He stressed the need for more stakeholder discussions, warning that the new tariffs could drive up consumer prices and hinder the recovery of Kenyan farmers and exporters.
“The levies and more taxes on exports will make our products uncompetitive in East Africa and in Comesa as already Uganda and Tanzania are up in arms against the imposition of the levies,” said Mr Ogambi.
“While AFA needs to raise revenues for the services provided, considerations must be made not to hurt consumers and also not to outprice our exports in the international markets.”
The CEO said Kenya must take a decision to support its exports and reduce levies and charges as they are negatively affecting the import to export ratio, which has remained at 5 containers of imports to 1 container of exports.
Roy Mwanthi, the chairman of the Kenya International Freight & Warehousing Association (KIFWA), said rice importation has stopped since AFA imposed the levies on August 12 this year and it will affect households as the cost of rice is expected to increase.
“We anticipate serious shortage of rice and wheat due to the levies and those who import will have to pass the cost to consumers. Currently, rice from East African countries that would ordinarily be free are subject to high levies and is stuck in different border pints,” said Mr Mwanthi.
Mr. Mwanthi has criticized Kenya’s new tariffs on food crop imports and exports, calling them a significant obstacle to international trade. He argued that these additional taxes on essential food products could lead to increased prices and reduced import volumes.
Tanzanian traders have voiced their dissatisfaction with Kenya’s decision to impose a 2% levy on the customs value of cereals and pulses. They claim that this would result in additional costs of $153.923 (Ksh20,000) for a truckload of maize and $384.806 (Ksh50,000) for a truckload of rice, on top of existing fees for various regulatory services.
The total costs for importing food crops into Kenya are substantial. Traders are already paying $23,088 (Sh3,000) for an AFA import permit, $4,617 (Sh600) for an import permit fee, $57,721 (Sh7,500) for inspection by Kephis, $8.46 (Sh1,100) for port health and biosafety fees, and $55.41 (Sh7,200) for moisture and aflatoxin testing by Kebs.
In response to the backlash, AFA Director-General Bruno Linyiru announced that the government has temporarily suspended these new levies for a month. This pause will give the regulator time to address concerns from traders and adjust the policy if necessary.