Tax waiver on imported maize to reduce the price of unga

Agriculture CS Peter Munya (right). State has suspended levies for 90 days to allow traders to bring in more stocks. [Edward Kiplimo, Standard]

Kenyans should expect the cost of unga to start decreasing from July 1, following the removal of duties and other charges on imported maize.

Agriculture Cabinet Secretary Peter Munya said the suspension applies to all border points including the East Africa Community and the Common Market for Eastern and Southern Africa member states.

“This measure is intended to reduce the costs of maize that is coming into the country and therefore impact on the price of unga that is increasing in our retailing points across the country,” he said on Tuesday.

“It is for a period of time as we target the next harvest, which is projected to be October, so in the next 90 days, we will suspend all those charges and levies.”

Mr Munya said the decision was made after a lengthy discussion with all government agencies that operate at entry points including Kenya Revenue Authority, Kenya Plant Health Inspectorate Service, Kenya Bureau of Standards and Agriculture and Food Authority.   

Reduced supply     

A tonne of imported maize was costing Kenya Sh28,260 last year, an increase from Sh27,279 the previous year and was the highest since 2017 when it was Sh30,321.

The price of a 90-kilogramme has now risen from about Sh2,800 in December 2021 to average Sh5,500 in June this year on reduced supply and lower rainfall that has affected maize growing regions.

The government, through the Agriculture ministry, is looking into ways of addressing the high cost of maize flour that is retailing above Sh200 for a two-kilo (2kg) packet.

“We are also asking those who are hoarding when this cheap maize comes, don’t complain that prices have gone down because you are hoarding maize and putting the country at ransom,” Mr Munya said.

Sifted maize meal at a supermarket. [Wilberforce Okwiri, Standard]

“We have evidence, studies and stock taking, we know there is maize. I am not saying the maize is enough but there could be maize out there. “Don’t blame the government when it takes extraordinary measures to ensure that there is maize that is affordable in the country.”

The waiver of levies adds to a series of interventions by the State as it battles the rising cost of living. Last month, National Treasury Cabinet Secretary Ukur Yatani approved the importation of up to 540,000 tonnes of white maize from outside the EAC.

“In addition to that, we are also looking for other ways and means of actually bringing maize,” Mr Munya said.

“We will not entirely rely on private citizens...we also want to look at ways the government can support the challenge that private sector is having in terms of accessing maize because that is also a challenge.”

Kenya National Bureau of Statistics data shows maize production declined by 12.8 per cent from 42.1 million bags in 2020 to 36.7 million bags last year on the back of erratic rains.

The decline in local production saw the volume of imported maize double from 273,500 tonnes in 2020 to 486,500 tonnes in 2021.