Consumers could soon pay less for potatoes, eggs, and onions as the government proposes to remove import taxes on the products sourced from East Africa, a decision that is however expected to rattle local farmers.
Treasury Cabinet Secretary (CS) Njuguna Ndung’u, while delivering the 2024/25 financial year speech before Parliament, proposed the removal of the 25 percent excise duty introduced on the products last year, which affected trade relations between Kenya and her neighbours.
“To promote trade across the East African region, I propose the removal of this excise duty on imported eggs, potatoes, and onions originating from East African Community (EAC) partner states, subject to goods meeting the EAC rules of origin,” he said.
Removal of the taxes could be the result of engagements between Kenya's President William Ruto and his Ugandan counterpart Yoweri Museveni, since Uganda is a big exporter of eggs to Kenya.
Kenyan consumers have witnessed a high increase in prices of the products, with the latest Kenya National Bureau of Statistics data showing that by May, prices of a kilo of onions had risen by 67.7 percent, and potatoes by 10 percent. Currently, two eggs retail at Sh35 across many places.
Treasury on Thursday listed agriculture as among the key priority sectors it is banking on to ensure economic growth in the year starting July, with the CS indicating that the government would implement measures to protect markets of sub-sectors including coffee, pyrethrum, and tea.
“To enhance price discovery and boost income for coffee farmers, the CMA has licensed 14 coffee brokers and so far 29 auctions have been conducted under the Capital Markets Coffee Exchange Regulations, 2020 at the Nairobi Coffee Exchange. In addition, the authority has approved the direct settlement system which has been operationalised,” Prof Ndung’u stated.
During the fiscal year 2024/25, the government has allocated Sh54.6 billion to the Agriculture sector, as it aims to boost productivity across value chains, mainly through the provision of working capital to farmers.
Prof Ndung’u indicated that the funding model would support farmers from a food deficit to a surplus position “through input finance subsidies and intensive agricultural extension support.”
“To attain food and nutrition security, I propose an allocation of Sh54.6 billion for various programmes under this sector. This includes Sh10 billion for fertiliser subsidy programme, Sh6.1 billion for the national agricultural value chain project, Sh2.5 billion for the Enable youth programme, Sh2.4 billion for the Enable youth and women in Agriculture, Sh747 million for small-scale irrigation and value addition project, and Sh642.5 million for the food security and crop diversification project,” the Treasury CS said.
The government has expressed concerns over growing threats to the sector due to climate change which has manifested in the form of extreme weather events, including recent floods that affected thousands of Kenyans, and droughts that preceded.
Prof Ndung’u said the cost of adapting to climate change events was rising and eating into essential budgets such as health and education, which could risk destabilising the economy.
Among measures for climate change adaptation and mitigation are reforestation and afforestation exercises being spearheaded by different players, with the Treasury allocating Sh10.7 billion during the year starting July,
“These extreme climate change events have emerged as key drivers of food insecurity and increased cost of living. Furthermore, the shocks have shifted budgetary resources from economic activity to saving lives and rebuilding damaged infrastructure,” Prof Ndung’u said.
