29 January 2007, by Elly Wamari in Nairobi, Kenya. About three years ago, sugar manufacturers in Kenya had reason to give the government a huge friendly pat on the back. Now they are shadow boxing in warm-up for a possible conflict with the managers of the country"s affairs, if their latest request goes unheeded.
On March 1, 2004, the Common Market for East and Southern Africa (Comesa) allowed Kenya to impose a four-year safeguard measure that restricted duty-free sugar imports into the Kenyan market, from other Comesa country members.
Kenyan authorities had spiritedly negotiated for this, hence the friendly pat on the back. The country had argued that Comesa protection was necessary to allow the troubled local sugar industry time to undertake reforms that would then put them at equitable competition with other sugar manufacturing countries within the region under the free trade arrangement.
In the preceding years, the disadvantaged Kenyan sugar manufacturer had been dealt some serious blows by cheap imports from comparatively advantaged sugar producing countries such as Malawi, Sudan and Mauritius. Some local manufacturers had actually ground to a halt.
And so, with the imposition of an import restriction that allowed only 200,000 tons of sugar importation to specifically bridge the local supply deficit, the Kenyan sugar manufacturer was going to be protected from unbalanced competition for four years. This would allow many of them to come back alive, and the industry to institute management reforms for boosting production.
Now, with only about one more year to go before the expiry of the import restriction, the sugar manufacturers are beginning to tense up from prospects of the stiff impending competition from the region. They do not like it. Not just yet, they say.
Accordingly, they have lately been nudging the Government to seek a further extension of the Comesa safeguard provision. The import restriction is due to expire on March 1, 2008.
Under their umbrella body – Kenya Sugar Manufacturers Association – the sugar manufacturers have teamed up with Kenya Sugar Growers Association, and even enlisted the support of the parliamentary committee on agriculture, to urge the Government to negotiate again with Comesa for extension of the preferential treatment.
They are arguing that many manufacturers were still operating at an average of 60 percent efficiency level, implying that the industry would not yet be ready next year to compete with imports.
Said chairman of the parliamentary committee on agriculture, Franklin Bett, two weeks ago: "Our local sugar industry is yet to come out of the woods, and unless the Government moves fast to seek an extension (of import restriction) from Comesa, we risk losing out completely."
Needless to say, the situation is causing anxiety among sugar import firms, who must already be keenly waiting for the lifting of the import ban in about 13 months time.
Click here to visit Elly Wamari's weblogpage.