Kenya has imported duty-free sugars in almost all periods surrounding elections over the last decade, highlighting political decision-making that is harming the sector in exchange for patronage and votes. Over the past decade, Kenya has been crafting a unique economic narrative that is strategic and poses the most benefits to sugar importers.

The country imported subsidized sugar in 2013, around 2017, and is currently slowly distancing itself from another cycle of duty-free imports. In a quest to protect Kenya's sugar industry from extreme competition by COMESA states, the country entered into an agreement to safeguard its markets from cheaper sugar over a period of time so it could promote local production and subsequently increase the local supply.

However, the sector has been riddled with many challenges, and it hasn't been able to fulfill the country's needs for the commodity, sugar. The country has often had to resort to duty-free sugar imports to fully satisfy the country's needs and gaps left by local producers.

Today, approximately 52 percent of the sugar consumed locally is from imported sugar. The local industry faces a myriad of issues, including a high cost of production, low productivity, inefficiencies across the value chain, a weak regulatory framework and extension support, and delayed payment to farmers.

The woes have been present for a while, and efforts to privatize the millers have borne no fruit to date, even as state-owned millers struggle to compete with private players taking over cane plantations without investing in cane development, a practice known as poaching.

Harvesting immature cane

Reduced investment in the sector has led to a cane shortage, with some millers crushing immature cane, prompting the Agriculture and Food Authority (AFA) to order the closure of Nzoia and Miwani for four months. This is in response to efforts to find more lasting solutions for the shortages in sugarcane production, which have resulted in a surge in sugar prices, reaching an all-time high of at least Sh250 per kg.

In an effort to stabilize prices, the government announced an extension for the importation of duty-free sugar for the second time in 2023, as the first extension was from December 2022 to March 2023. Duty-free imports have not only reshaped the sector's economic landscape but have also had ripple effects on local industries and local sugar prices, greatly benefiting key players.

About a decade ago, in the year 2013, the nation faced a severe sugar drought. It could be attributed to a cocktail of factors, including meager sugar production, bad weather conditions, and insatiable demand from consumers.

The results? A surge in sugar prices and a lot of scrutiny into Kenya's sugar supply. It was in this window that the government decided to open its doors to duty-free sugar imports to quench the immediate thirst of its citizens. Ever since, "duty-free sugar imports" has been a term we've been hearing year in and year out. The presence of duty-free sugar has indeed been a salve to Kenya's sugar scarcity.

The trend is production steadily increases as the imports increase too. The statistics show there's a growing consumption of the commodity in the country, and with a need to keep prices stable, the country resorts to duty-free sugar imports since the local industry can't fully bridge the gap.

2017 saw the highest number of tonnes imported, and it could be attributed to the elections that were held in that year. "Some key players in the industry are notable politicians who wanted money to fund their campaigns; that could be part of the reason," was a response I got from a colleague when I asked for his opinion on the data.

YEARS	PRODUCTION (MT)	IMPORTS (MT)	DUTY-FREE YEARS
2013	600.2	238.0	DUTY FREE
2014	592.7	192.1
2015	635.7	247.4
2016	639.7	334.1
2017	376.1	989.6	DUTY FREE
2018	491.1	284.2	DUTY FREE
2019	440.9	458.6
2020	603.8	442.4
2021	700.2	426.3	DUTY FREE
2022	700.2	320.7	DUTY FREE
2023			DUTY FREE

Yet it hasn't been without its fair share of complications, ranging from the many multi-billion corruption scandals, seizures at the port over illegal sugar imports, importation of illicit sugar that's not up to KEBS standards, to the woes faced by the local sugar barons, etc.

Read also: Sugar barons dancing on Mumias graveyard

Lower costs of sugar production

Foreign sugar is often cheaper and more efficiently produced with better variants of sugarcane that have higher yields and lower costs of sugar production. For instance, the cost of sugar production per tonne in Kenya stands at $870, which is double in comparison to the $400 in Malawi, Egypt, Swaziland, and $450 in Sudan. It's especially cheaper in other large-scale production countries outside Africa such as Brazil, Mauritius, and Eswatini.

This casts a shadow on the local sugar barons, causing a clash between domestic production and foreign imports, pitting the need to fortify local industries against the call for affordable consumer prices. Other benefits of tax-free sugar imports include Kenya's diplomatic ties blooming as a result. The imports have rekindled old alliances and ignited new diplomatic flames.

Neighboring nations in the East African Community and far-flung regions in Asia and Europe find themselves in the heart of Kenya's sweet supply chain; let's call it sugar-coating diplomacy.

Kenya's reliance on duty-free sugar imports has opened a chapter of adaptation in response to scarcity and shifting markets. The dance between local yield and cheaper global supply raises questions about whether we should fully move to imports instead of relying on low local supply. But with that, we'd lose our production power and not be self-reliant. We move into new phases full of insights but with a lot of questions too.

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