Kenyan farmers petition court over Uganda’s sugar
What you need to know:
- The farmers also says the decision to accord Uganda preferential treatment was made without involvement and participation of various stakeholders in the Kenyan sugar industry.
NAIROBI. Kenyan farmers have petitioned court challenging a decision in which Uganda had been allowed to export duty-free sugar from above the Common Market for East and Southern Africa (Comesa) quota.
In a petition filed under Kongaren Multipurpose Cooperative Society, the farmers argue that it was wrong for Kenya and Uganda, being Comesa member states, to engage in separate bilateral trade agreements outside the bloc’s treaty.
The petition is filed at the Mombasa High Court.
It alleges that sometime in March 2019, the two countries entered into a special arrangement in which Kenya granted Uganda sugar-free access to its market of up to 90,000 metric tonnes, which is above the quota allocated by Comesa.
Acting through lawyer Gikandi Ngibuini, the farmers argue that based on the arrangement, Uganda has been exporting sugar to Kenya on zero percent import duty, going against the 20 percent import tax.
“There is a real threat of huge quantities of sugar flooding the Kenyan market, which are to be cleared for home use in the country from Uganda on a zero customs and excise duty basis,” the petition reads in part.
Farmers further argue that flooding of Ugandan sugar means that their produce will be more expensive thus not attractive to buyers.
Sued among others include the Kenya Ministry of Industrialisation Trade and Enterprise Development, Agriculture and Food Authority, Kenya Revenue Authority, Ministry of Finance and the Attorney-General.
The farmers want court to issue a declaratory order against the decision that allows Uganda to export duty-free sugar to Kenya that is outside the Comesa quota.
They also want court to issue an order against the preferential treatment accorded to Uganda, noting that Uganda’s sugar is granted free access tantamounts to discrimination.
In August, Kenya cut Uganda’s sugar imports by about 71,077 tonnes.
According to data from the Kenya’s Sugar Directorate, dealers would only be allowed to import 18,923 tonnes of sugar from Uganda down from 90,000 tonnes.
However, the Ministry of Trade in Uganda noted then that whereas the Comesa quota only allowed 18,923 tonnes, the balance of the 90,000 tonnes annual quota (ie 71,923.36 tonnes) would be catered for under the EAC bilateral window.
It is not clear whether the farmers are petitioning court to block importation of Uganda sugar outside the Comesa quota.
However, according to the farmers because Kenya has granted Uganda preferential treatment this discriminates against other Comesa member states with equal capacity to export sugar.
“Similarly, this arrangement is detrimental to other sugar industry stakeholders and businessmen in the country who have permits to import sugar from various member states of Comesa,” the petition reads.
The farmers also says the decision to accord Uganda preferential treatment was made without involvement and participation of various stakeholders in the Kenyan sugar industry.
Therefore, they argue that the Kenyan government should make a disclosure on the amount of sugar imported into the country from January to date and further disallow importation of any duty-free sugar from Comesa member states after the quota amount has been achieved.
The petitioners also say separate bilateral agreements between Kenya and Uganda are negatively impacting on the Kenyan economy in terms of revenue payable to the government.