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September 22, 2018

Comesa bloc faults Kenya for importing contraband sugar

Contraband sugar being destroyed at Mombasa port 0n May 12, 2018 / JOHN CHESOLI
Contraband sugar being destroyed at Mombasa port 0n May 12, 2018 / JOHN CHESOLI

Kenya violated Common Market for Eastern and South Africa policies to promote regional integration and intra-African trade when it imported contraband sugar from outside the bloc.

Member countries question why Kenya had to import sugar from Brazil when the bloc had a surplus.

Led by Mauritius, the 19 member countries accused Kenya of diluting sugar prices in the region by exposing it to unfavourable competition.

“The importation of tax-free sugar into Kenya has lowered prices below the world market prices. This has affected potential exporters in the bloc,” Mauritius delegate Devish Dukhira said.

Mauritius produces 600,000 tonnes of sugar annually and has been exporting to European Union until recently when the union imposed hefty tariff barriers.

“We only consume 10 per cent of what we produce. We looking to direct the surplus to regional market and Kenya at market prices,” Dukhira said on Friday in Nairobi.

Kenya produces about 600,000 tonnes of sugar a year against an annual consumption of 870,000 tonnes. The sugar deficit is usually covered by stringently controlled imports from Comesa , where Kenya has a quota of 300,000 tonnes annually.

Trade PS Chris Kiptoo, in a statement, admitted that Kenya has been lagging in implementation of regional commitments and full-scale participation of all member states in the programmes.

He said despite developed instruments and policies, Kenya failed to promote trade and investment within the region.

“The low-level of transposition of regional instruments has negatively affected the implementation of various programmes,” Kiptoo said.

“There is need to revive our local industries and ensure that they tap into existing regional market in order to contribute to the regional development objectives seeking to improve the welfare of every citizen.”

Comesa aims to promote development of member states through facilitation of trade in all economic activities, seeking to revitalize domestic industries and improve the livelihoods of ordinary citizens.

The uncontrolled importation of sugar last year, during a duty-free window opened by Treasury Cabinet Secretary Henry Rotich, has strangled the local sugar industry and 500,000 sugarcane farmers. This has seen many farmers opt to shift from cane farming to other cash crops.

The committee will be looking to open markets for the product to member states and resolve customs and non-tariff barriers around the sugar sub-sector.

“We will be making policies to allow countries to monitor regulations and make the sugar industry competitive around the trading blocs,” programmes assistant secretary general Kipyego Cheluget said.

Kenya was given a two-year extension on sugar imports safeguards to allow a limit on quantity of sugar that member states are allowed to export to Kenya. The extension starts in February 2019 to 2021.

Despite numerous extensions, Kenya is far from meeting some of the conditions given.

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