Government officials linked to illegal duty-free sugar imports

Sugarcane farmers have accused government officials of facilitating illegal and substandard sugar from other origins to get into the country.

Kenya Sugarcane and Growers Association secretary general Richard Ogendo said farmers have been fighting about imports while the government elements are busy fighting to get import permits.

He alleged sugar-loaded elsewhere is coming into the market in the pretence that it’s coming from Uganda.

“This is a scandal, Sh2.4 billion worth of sugar imported by two importers at the expense of 8 million Kenyans whose livelihood are now at risk,” Ogendo said.

He said they have gone out of their way to look for the entries, and documents related to that particular consignment because it was brought in over and above the Comesa quota.

“KRA should tell you where this sugar is, who inspected the sugar and why it is not on the cane trade and why the unique consignment reference number does not reflect on Kenya Bureau of Standard system,” Ogendo said.

According to sugar campaign for change coordinator Michael Arum, the issue of the Bilateral Trade Agreement on sugar with Uganda is being abused by government officials who pretend to be passionate about it.

They have called on the Interior Cabinet Secretary Fred Matiang’I to probe the illegal importation of sugar worth Sh2.4 billion.

Arum said the sugar came into the country without any approvals from the regulator.

They said this is a similar scenario that happened in December 2020 after the quota was declared exhausted and 10,000MT of sugar brought in illegally.

“Over mature cane of up to 36 months is still going to waste in the fields yet we say that there is sugar deficit,” Arum said.

They said the import caused a Sh1.3 billion loss in the sugar industry because it was over and above the yearly quota and violated a court order.

However, the farmers yesterday said the sugar did not come from Uganda as it was initially thought.

In 2020, the Kenya Sugar Board launched investigation on sugar dumping from Uganda and Tanzania after statistics showed that sugar imports from the two countries had risen exponentially.

KSB blocked several Ugandan and Tanzanian companies from bringing sugar into Kenya.

However, the board withdrew the ban before December 25,2020 following the creation of a joint secretariat that looped in authorities in Uganda and Tanzania to jointly carry out the investigations.

“If traders are engaging in unfair practices, we have the mandate to investigate. In this case, we have reason to believe that some traders from neighbouring countries may be misrepresenting the source of the sugar they sell to Kenya,” KSB chief executive Rosemary M’kok said.

Data from KSB shows that Kenya imported 504 tonnes of sugar from Tanzania in the eleven months to November 2012. Kenya recorded negligible imports from the country in 2019.

Ordinarily, sugar imported into the region is levied and a common external tariff (CET) of 25 per cents and value added tax (VAT) of 18 per cent is charged.

Sugar re-exports, such as the ones that are allegedly coming from Uganda, are supposed to be subject to a 100 per cent tax.

Last year, Kenya Revenue Authority recovered Sh20 million in taxes from people dealing in illegal sugar imports across the porous Kenya-Uganda border.

The money was recovered after the Authority disrupted smuggling schemes through prosecutions and alternative dispute resolution processes.

The smugglers are keen on avoiding major entry points along the Northern Corridor at Busia and Malaba towns which serve as the legitimate entry and exit points.