Maize imports triple on tax waiver and demand
A prolonged drought and high input cost have cut output of the staple, pushing the price of a kilo of maize flour to Sh84 in September up from Sh57 last year.
Maize imports climbed over three times in the three months to June as traders rushed to take advantage of the government waiver of duty on imported grain to address local market shortages.
A prolonged drought and high input cost have cut output of the staple, pushing the price of a kilo of maize flour to Sh84 in September up from Sh57 last year.
Data by the Kenya National Bureau of Statistics (KNBS) show maize imports hit 223,528 tonnes between April and June this year—a 278 per cent increase from the quantities imported into the country during a similar quarter last year.
It’s also a 92 per cent increase from the 116,152 tonnes imported between January and March.
“There was a surge in the volume of imports of maize, which more than tripled from 59,100 tonnes in the second quarter of 2021 to 223,500 tonnes in the second quarter of 2022,” KNBS said.
“Consequently, expenditure on imported maize rose significantly from Sh1.5 billion to Sh6.2 billion over the same period,” it said.
Suspended tax
KNBS especially noted an increase in maize coming in from Tanzania with the total value of goods imported from the neighbouring country rising by 42 per cent to Sh15.4 billion compared to Sh10.8 billion last year.
National Treasury Cabinet Secretary Ukur Yatani in May suspended tax on maize imports of up to 540,000 tonnes to increase imports from outside the East African Community (EAC) in a bid to ease pressure on maize flour prices.
The government in July extended duty-free maize imports for two more months to allow importers to ship in the product to ease a shortage of the cereal that has pushed up the cost of maize flour.
Kenya is a net importer of maize but has traditionally restricted imports to cushion local maize farmers but at a cost to consumers who are forced to pay a higher cost for the produce.
Trade deficit
The country’s current account deficit widened by 9.7 per cent to Sh174.4 billion between April and June from Sh158.9 billion in the same quarter of 2021.
This was driven by a 34.6 per cent increase in the merchandise trade deficit, a major driver of the current account. It recorded a deficit of Sh365.6 billion in the quarter under review.
