Maize prices set to rise further as Kephis resumes tax charges after the lapse of tax waiver on imports.
Kenyans will have to tighten their belts as maize flour prices are expected to rise further amid the already high cost of the product.
This comes after a waiver on charges and fees on imported maize expired on Friday, 30, September.
The 90-day waiver that has been in place since July 1 was effected to control prices after they shot to Sh225 just a month before the elections.
This cushioned consumers from high prices amid rising food inflation.
Kenya Plant Health Inspectorate Services (Kephis) managing director Theophilus Mutui in an internal memo notified deputy directors within the organization to resume charges on maize effective October 1.
“The gazette notice No.7499 directive for waiver of fees and charges for maize with effect from July 1 to September 30 refers. Please note that the waiver period will lapse on September 30. You are hereby advised to resume charges for maize and animal feeds from October 1,” Dr Mutui said in the memo.
Early in July, as the government worked to contain an increase in maize flour prices that had left households paying an average of Sh225 for a 2kg package of flour, outgoing Agriculture cabinet secretary Peter Munya gazetted the waiver.
A subsidy on sifted maize flour would then come afterward, with the intention of bringing down costs to Sh100 for a 2kg packet.
However, this attempt failed as the subsidized commodity was mainly unavailable on the market.
Millers now say with the resumption of the charges – despite expected poor harvests in the country due to poor rains that have hit agricultural productivity – they may not have an option but to increase prices further.
A 2kg packet of maize flour is currently retailing below Sh200 on average, with many brands selling at Sh189 at local supermarkets.
In the Kenya National Bureau of Statistics (KNBS) latest Consumer Price Index (CPI) data released on Friday, maize flour prices contributed to the largest raise in the inflation rate from 8.5 percent in August to 9.2 percent in September.
KNBS reported that while food prices rose by 15.5 percent compared to a similar period last year, loose maize flour prices went up by 8.4 percent just within the month.
The maize flour prices increased by nearly thrice the rate of any other commodity.
The latest Central Bank of Kenya’s April-June economic review observed that the Agriculture sector contracted by 0.7 percent as it suffered impacts of inadequate rains last year.
This followed a further contraction of 1.2 percent in the first three months of the year.
“Activity in the sector remained subdued following inadequate rains last year and delayed onset of rains during the quarter under review which adversely affected production. Contribution of the sector to overall GDP growth stood at -0.1 percentage points during the quarter under review,” the CBK stated.