Kenya’s spend on food imports exceeds machinery by Sh61bn

 

Kenya’s expenditure on food imports jumped by nearly Sh100 billion in the 12 months to September 2023, underlining the devastating impact of prolonged drought and disruptions in global supply chains on the country’s food security.

Traders splashed Sh338.96 billion on food and beverages from abroad in the review period compared with Sh239.98 billion in a similar period in the prior year, analysis of official data shows. The 41.25 percent or Sh98.98 billion bump came at a time when President William Ruto marked the first full year in office.

The provisional data collated by the Kenya National Bureau of Statistics indicate the food import bill exceeded expenditure on machinery and other capital goods, including parts and accessories, by Sh61.04 billion in the review period. This was after expenditure on the capital goods fell nearly by Sh25.36 billion or 8.36 percent to Sh277.92 billion.

Dr Ruto, who was voted in partly on the pledge to ease cost of living, took power at a time the country was undergoing the last phase of a biting drought, estimated to be the worst in four decades, which had resulted in poor food production in a country depending on rainfed agriculture.

The food production crisis was compounded by high cost of farm inputs such as fertiliser largely due to Russia’s brutal war in Ukraine that exacerbated global supply chain disruptions that were yet to fully recover from the Covid-19 shutdowns, which peaked in 2020.

This prompted the Ruto administration to allow a waiver on import duties to smoothen purchase of key food items from abroad in addition to implementing a fertiliser subsidy.

Food items that were brought into the country tax-free last year included white maize, rice, yellow maize, soya beans, soya bean meal, assorted protein concentrates and feed additives.

The waiver was granted in a bid to “bridge the food stocks deficit as well as lower and stabilise food prices”, according to Treasury Cabinet Secretary Njuguna Ndung’u.

The fall in importation of machinery, coupled with a similar drop in non-food industrial supplies and a largely flat value of fuel imports, is a signal to a potential drop in production in key sectors such as manufacturing.

Economic indicators have shown production of key items dropped especially in the first half of 2023 compared with the year before with growth in purchase of electricity from the grid also slowing.

For instance, production of assembled vehicles fell 14.7 percent in the first seven months of the year to 7,416 units, while that of cement reduced 4.2 percent to 5.36 million metric tonnes in the same period, according to provisional KNBS data.

Processing of soft drinks also contracted 3.6 percent year-over-year to 278.23 million litres in six months through June while sugar production dipped 32.2 percent to 357,308 tonnes in first the eight months of the year.

Kenya has been struggling to ramp up food production and cut its appetite for imports, with challenges such as erratic rainfall, smaller farm sizes and high production costs standing in the way.

This has in recent years been exacerbated by lingering bottlenecks in global supply chains and drought across the globe that saw some countries adopt protectionist policies, subjecting Kenyans to record high prices of items such as edible oil, staple maize meal, rice and wheat.

For example, protectionist rules in Indonesia, which accounts for about 60 percent of global palm oil production, to prioritise supply to its domestic factories in 2022, resulted in Kenyans paying high prices for edible oil

By CONSTANT MUNDA