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Agriculture minister William Ruto is set to gazette new regulations to streamline the sugar industry this week.
Agriculture minister William Ruto is set to gazette new regulations to streamline the sugar industry this week.

The regulations were supposed to be gazetted on Friday but Mr Ruto told the Sunday Nation on telephone that the Kenya Sugar Board (KSB) had delayed the process by submitting their proposals late.

On Tuesday, when the minister was inaugurating the board, he asked the officials to send in their proposals for inclusion by Thursday saying that would ensure that the new rules were gazetted on Friday.

“The board is part of the stakeholders and I expect that by Thursday, I shall have received their input and gazette the regulations,” Mr Ruto told reporters.

The industry has been waiting for the new regulations aimed at giving direction to sugar importers.

“We are going to push for a special gazette notice either on Monday or Tuesday to have the regulations in place. If that is not possible then they will be part of next Friday gazette notice,” he said.

Last month, the minister imposed a ban on sugar importation, accusing licensed importers of misusing their certificates. Industrial sugar was however exempted from the ban after manufacturers experienced a shortage.

Hue and cry

There was hue and cry from a section of the importers and the Comesa secretariat. According to the secretariat, Mr Ruto violated sections of the agreement between Kenya and Comesa.

“While noting and supporting your government in this concern, we wish to advise that bans of imports as well as administrative measures such as lengthy import licensing procedures may constitute non-tariff barriers which are prohibited under Article 49 of the Comesa Treaty,” wrote Comesa secretary-general Sindiso Ngwenya.

Under the agreements, Kenya is to enjoy an exemption from allowing duty and quota-free market access to sugar from the Comesa Free Trade Area (FTA). This was granted to make the local industry efficient and commercially competitive.

The deal is to enable the country meet its sugar production deficit. Currently, Kenya produces about 520,000 tonnes of sugar each year against a consumption demand of 740,000 tonnes, with the deficit being plugged through imports from Comesa states. Mr Ruto however maintained that his action was mean to benefit both the Kenyan sugar and Comesa imports.

“My actions are purely targeted at imports that not only threatened the local millers but also sugar coming in under the Comesa tariffs. The imports I targeted do not come in as part of the Comesa quota,” he said.

Cases of contraband sugar coming into the country, undervaluing or lack of declaration of sugar at the port of Mombasa, El Wak and Namanga have been rampant. The sugar is sold in these far-flung areas that local millers have not penetrated.

Millers complained that their stocks pile up in stores as consumers go for contraband. They reported an excess of 55,000 tonnes in the stores while 60,000 bags of illegally imported sugar were sold in the local market every month while another 80,000 bags on transit were diverted into the market over the same period.

In May, the minister also revoked export licences for firms engaging in the sugar trade accusing some of them of engaging in malpractices, including evading taxes and diverting the commodity into the local market. The minister said his actions were aimed at sanitising the industry as well as eliminating market distortion.

“When we rid our markets of the imports and bring sanity, then these efforts will be appreciated. I will not relent on these efforts,” he said.