A recently introduced two percent import tax on food is expected to lead to shortages and increase the cost of living. The tax, which came into effect on July 1, affects a wide range of grains, including rice, wheat, corn and pulses such as beans and lentils.

As a result of these changes, traders are reporting a significant decline in import volumes due to higher business costs, which could further exacerbate food shortages and inflation.

Traders importing goods worth Sh40 million are expected to pay an additional Sh800,000 in duties, a burden that is likely to be passed on to consumers. The additional cost could put a strain on the budgets of the Kenyan people and contribute to the rising cost of living that the government is trying to avoid.

Industry players such as the Kenya International Freight and Warehousing Association (KIFWA) are warning of a sharp decline in rice imports, as the cultivation of important food crops is also associated with declining volumes.

The impact of these levies also affects root and tuber crops such as potatoes and cassava, affecting both regional and foreign imports. KIFWA criticised the levies as counterproductive and called on the government to suspend them to prevent further disruptions to the food supply.

The combination of high taxes and other government levies not only reduces imports but also poses the risk of shortages and rising prices. As Kenya is a net importer of food, the need to meet local demand for grains, particularly rice and maize, is becoming increasingly urgent. With domestic production lagging behind national demand, import levies threaten to worsen an already fragile situation.

Kenya produces an average of 100,000 to 130,000 tonnes of husked rice annually, while the national demand is about one million. This significant gap between production and demand forces the country to rely heavily on rice imports to meet the needs of its population.

Kenya’s maize production is insufficient to meet national demand. The country produces about 35 million bags of maize annually, but demand is forecast to rise to 60 million bags by 2025.

This shortage means that significant imports of corn will be necessary to ensure adequate supplies and prevent future shortages.

The recent floods have also disrupted agricultural activity and yields are expected to decline further, leading to even higher food prices in the coming months.

To avoid shortages and higher food prices in the short term, the government should respond to demands from traders and stakeholders and suspend import tariffs to allow for broader consultations to avert a possible food crisis.