President Kenyatta orders that imports of Sugar and Milk Powder to be tariff free until August 2017, who in the Jubilee will eat the spoils?

President Uhuru Kenyatta finally found a solution to the rising the prices and inflation on basic foods. Therefore on the day there is 30,000 tons Sugar coming in at Mombasa this morning.

This after the first Executive Order of Kenyatta this year said: “That the drought and the famine in parts of Kenya is a national disaster, duty shall not be payable for the following items- 

(a) Sugar imported by any person, with effect from the date of Notice to the 31^st August, 2017; and

(b) nine thousand tonnes of milk powder imported by milk processors, with the authority of the Kenya Dairy Board, with effect from the date of this Notice to the 31^st August, 2017 Dated the 11^th May 2017” (The Kenya Gazette, Vol. CXIX – No. 62, Nairobi, 12^th May 2017).

So as this happens, you can wonder if the Sugar millers and Sugar exporters are connected with the government. Since the 30,000 tons just appear on the day after the gazette. That means, someone knew about the plans of the government and let it happen. It isn’t just appearing from the sky, that a holy angel sends 30,000 tons of sugar to Kenya and the Port of Mombasa on the day after the Executive Order was signed and than relieved to the public by Cabinet Secretary for the National Treasury Henry Rotich. He is just a useful CS, who certainly will have his pieces of deliverance of all the duty free goods.

That the government, close connections with the Jubilee government and the Sugar cartels will surely gain profits on these exported foods. This been in a country where the tariffs has been a 100% on Sugar and added VAT 16 %. Therefore, this reactions seem to be a ploy to earn monies on gullible people and think that the people will take it as goodwill. This is happening at the same time, as the prices on sugar is still on a two year low worldwide. President Uhuru Kenyatta and Deputy President William Ruto, might think the Kenyans doesn’t see through this. But they should question the companies, the boats and who orders the duty free goods to Kenya from today and until 31^st August.

Like who earns the profits on the sugar and the milk powder in these months. They are clearly planning it and not only for the famine and drought. But for sole purpose of gaining massive amount of funds in the period of campaigning. This just appearing and ordered in the critical time. The Jubilee government doesn’t know how to be subtle. Can wonder if any of the corporations and importing businesses owned by the Kenyatta’s or Ruto’s would benefit from this. I wouldn’t be shocked, neither if anyone else of the Jubilee government got a payday and huge amount of Bob’s in their accounts. Peace.

The law: 

Kenya: At the moment, Sugar is not sweet for Jubilee!

The prices of Sugar in Kenya is special experiment, as the taxation on imports of sugar is a 100% and also 16% VAT on the sugar imported. Secondly, the industry is controlled by the state, there been talk of privatization of millers owned and the Kenya Sugar Board who regulate the industry. As well as the Ministry of Agriculture is making sure the output of the farmers are corrected.

Therefore, as the prices worldwide is sinking and going-low, the prices of sugar are going up. This is happening in the months right before election time.

The government must know the industry is struggling as the only private miller Mumias are again on a downward spiral:  “Already, the miller has been closed for three months. According to managing director Errol Johnson the closure was meant to fix equipment, which had contributed to the company’s poor performance due to inconsistent maintenance. The closure from April 11 came barely a month after the cash-strapped miller received Sh239 million from the government, as part of the bailout strategy” (BiznaKenya, 2017).

That the Mumias miller proving the big-problems in the Sugar industry, as it has been evident for years. The agricultural output and yields haven’t been the issue alone, it is denial of the state to figure out working changes to the millers, the import and also control it has over it. That the government has the oversight and the insight to the issues, are clearly that the Jubilee haven’t been interested in-changing it, as the benefit of this system. Therefore, President Kenyatta and Deputy President Ruto hasn’t touched it or done anything else than bailing out Mumias on the last dive of the company. Therefore, the reports shown here. Proves the initial factors to the grand issues and why the prices are sky-rocketing, while the international prices are falling. Take a look!

Barriers for Sugar Productions:

“Sugar milling is a high fixed cost business requiring substantial economies of scale in cane crushed to break-even” (…) “Existing relationships of patronage between governments and large milling companies serve to align the incentives of government and millers such that new entrants would find it difficult to compete with incumbents and obtain the same benefits” (Chisanga, Gathiaka, Onyancha & Vilakazi, P: 12, 2014).

“Government ownership in the sector remains large, despite higher relative efficiency in the private sector and long term plans for privatization. While some privatization has taken place over the past decade, government-controlled factories held a 37 percent production share, with additional non-controlling shares in other firms. Part of the argument in favor of privatization is the relative efficiency of production in private mills over those controlled by the government” (…) “The local sugar milling market is quite concentrated, and combined with the barriers to trade this suggests that the largest players have significant power over prices. Mumias, the largest sugar company, had a market share of 38 percent of domestically produced sugar in 2011, lower than its typical market share due to cane shortages. Combined with the government-controlled share of the industry, this implies that essentially two entities control at least 75 percent of local production. The shares of local producers in domestic market sales vary quite widely depending on the period, as the volume of imports fluctuates a great deal. For example, Kenya Sugar Board data from the first two quarters of 2012 show importswere approximately 33% of local production” (Argent & Begazo, P: 5-6, 2015).

“Kenya National Bureau of Statistics, a government (Jubilee) body, reports that 2.2 million Micro Small and Medium Enterprises (MSME) have closed shop in kenya over the last five years. These are some of the reasons that inform our opposition to Jubilee. Personally, I think Uhuru and Ruto are fine Kenyans; wonderful husband to their spouses; incredible fathers to their children; and great benefactors to their elite friends, but have terribly failed in the duties of the office of the presidency” (…) “All sectors of Kenyan economy has been negatively affected by the floods of cheap imports, brought into kenya by unscrupulous businessmen connected to those in power, having unbridled freedom to import anything of their choice without paying taxes: From sugar industry; to textile; to agriculture, denying kenya the much needed revenue for development. Over the weekends, the leaders behave like Frank Lucas, donating part of the proceeds from these imports to the same societies they are killing by giving out these import certificates” (Sadat, 2017).

That the government haven’t made sure the industry and financial markets been sufficient is proven with the macro problems in Kenya. The import sanctions together with the stronghold control of certain millers and Kenya Sugar Board, there are patronage and cartels that sets the prices and the payments for the yields. Together with the storage and cane production that is initial to the issues that are there today. That President Kenyatta and DP Ruto hasn’t taken charge and paid amends is the reason for the prices at this point. That the Sugar Barons, Sugar Cartels and Sugar Companies are connected with government is understood as the politicians are taking handouts from them as well.

As the COFEK open letter to Kenyatta said so well and I will end with:

“No one in your government can categorically state how much stocks are being held in the strategic grain reserves. Casual talk of wanting quality of the same maize, from the millers lobby, heightens speculation that your government is unwilling to walk the talk on cutting the cost of living. As things stand, it is fair to say that your Government has taken a holiday on consumer protection as cartels take over the all-important food security sector. It follows that your government, is therefore, in breach of Article 46 of the Constitution you swore to protect. Needless to mention, it is a tall order for you to protect and uphold the sovereignty, integrity and dignity of the people of Kenya if they remain hungry – with a single or no meal at all, thanks to the high cost of living. Your government supposedly offers huge subsidies to farmers through farm inputs like fertilizers which do not get to them. It’s the middlemen and cartels who end up smiling to the bank as farmers toil in vain” (COFEK, 2017).

Peace.

Reference:

Argent, Jonathan & Begazo, Tania – ‘Competition in Kenyan Markets and Its Impact on Income and Poverty – A Case Study on Sugar and Maize’ (January 2015)

BiznaKenya – ‘Mumias Sugar to close indefinitely over cash problems’ (08.05.2017) link:https://biznakenya.com/mumias-sugar-close-indefinitely-cash-problems/

Chisanga, Brian; Gathiaka, John; Nguruse, George; Onyancha, Stellah & Vilakazi, Thando – ‘Competition in the regional sugar sector: the case of Kenya, South Africa, Tanzania and Zambia – Draft paper for presentation at pre-ICN conference, (22 April 2014)

Consumers Federation of Kenya (COFEK) – ‘Cofek open letter to Uhuru Kenyatta on high cost of living’ (02.05.2017) link: http://www.cofek.co.ke/index.php/news-and-media/1718-cofek-open-letter-to-uhuru-kenyatta-on-high-cost-of-living?showall=&start=1

Sadat, Anwar – ‘REVEALED: WHY The ECONOMY is Almost COLLAPSING Under Uhuru Jubilee Regime, GoK’s Kenya Bureau of STATISTICS Exposes Shocking Numbers’ (07.05.2017) link: https://www.kenya-today.com/opinion/revealed-economy-almost-collapsing-uhuru-jubilee-regime-government-body-kenya-bureau-statistics-exposes-shocking-numbers

Communiqué of the Consultative Meeting of IGAD Member States on the Current Drought Situation in the Region (31.03.2017)

IGAD: Nairobi Declaration on Durable Solutions for Somali Refugees and Reintegration of Returnees in Somalia (25.03.2017)

 

Statement of IGAD Council of Ministers’ Consultation on the Current Situation in the Region (17.03.2017)

World Bank Group President Calls for Urgent Action on Hunger Crisis (08.03.2017)

WASHINGTON, March 8, 2017—World Bank Group President Jim Yong Kim today issued the following statement on the devastating levels of food insecurity in sub-Saharan Africa and Yemen:

“Famine is a stain on our collective conscience. Millions of lives are at risk and more will die if we do not act quickly and decisively.

We at the World Bank Group stand in solidarity with the people now threatened by famine. We are mobilizing an immediate response for Ethiopia, Kenya, Nigeria, Somalia, South Sudan, and Yemen. Our first priority is to work with partners to make sure that families have access to food and water. We are working toward a financial package of more than $1.6 billion to build social protection systems, strengthen community resilience, and maintain service delivery to the most vulnerable. This includes existing operations of over $870 million that will help communities threatened by famine. I am also working with our Board of Directors to secure the approval of new operations amounting to $770 million, funded substantially through IDA’s Crisis Response Window.

The World Bank Group will help respond to the immediate needs of the current famine, but we must recognize that famine will have lasting impacts on people’s health, ability to learn, and earn a living. So we will also continue to work with communities to reclaim their livelihoods and build resilience to future shocks.

We are coordinating closely with the UN and other partners in all areas of our response. We know that resolution to this acute crisis will not be possible without all humanitarian and development actors working together. We call on the international community to respond robustly and quickly to the UN global appeal for resources for the famine.

To prevent crises in the future, we must invest in addressing the root causes and drivers of fragility today and help countries build institutional and societal resilience.”

Background

A famine means that a significant part of the population has no access to basic food, suffers from severe malnutrition, and death from hunger reaches unprecedented levels. Children under five are disproportionately affected. A famine can affect the well-being of a whole generation. Famine was officially declared on February 20 in South Sudan, impacting approximately 100,000 people, and there is a credible risk of other famines in Yemen, Northeast Nigeria, and other countries. Ongoing conflicts and civil insecurity are further intensifying the food insecurity of millions of people across the region, and there is already widespread displacement and other cross-border spillovers. For instance, food insecurity in Somalia and famine in South Sudan are accelerating the flow of refugees into Ethiopia and Uganda. The UN estimates that about 20 million people in Nigeria, South Sudan, Somalia and Yemen are on the “tipping point” of famine. Drought conditions also extend to Uganda and parts of Tanzania. The last famine was declared in 2011 in Somalia during which 260,000 people died.

Statement by the IGAD Executive Secretary on the current drought in the Greater Horn of Africa (08.02.2017)

The Drought Situation

The Horn of Africa is in the midst of a major drought resulting from La Niña and reduced moisture influx due to the cooling of the ocean water in the east African coast. Whilst Member States of the Inter-Governmental Authority on Development (IGAD) are adept at managing droughts, what makes the current drought alarming in the Equatorial Greater Horn of Africa (GHA) region is that it follows two consecutive poor rainfall seasons in 2016 and the likelihood of depressed rainfall persisting into the March – May 2017 rainfall season remains high. The most affected areas include, most of Somalia, South-eastern Ethiopia, Northern Eastern and coastal Kenya, and Northern Uganda.

The climate predictions and early warnings produced by IGAD through advanced scientific modeling and prediction tools, which were provided to Member States and the general public, have elicited early actions (preparedness and mitigation measures). Highly comparable to the 2010 GHA drought, the current depressed rainfall and resultant poor vegetation conditions since March 2016 eroded the coping and adaptive capacities of the affected people. It also depleted water points, reduced crops, forages and livestock production, increased food insecurity, and adversely affected the livelihoods of vulnerable communities in the region.

The number of food insecure human population in the region is currently estimated at 17 million. Certain areas in South Sudan and Djibouti are already under an emergency food insecurity phase, according to the Intergovernmental Panel on Climate Change (IPCC) classification scale. In Somalia, the number of food insecure people doubled in the last year alone.

In the drought affected cropping lands (over Deyr area in Somalia and coastal Kenya), 70 to 100 percent crop failure has been registered. Livestock mortality has been particularly devastating amongst small ruminants with mortality rate ranging from 25 to 75 percent in the cross border areas of Somalia-Kenya-Ethiopia. In addition, livestock prices have dropped by as much as 700 percent.

Terms of trade have declined in the region, with Ethiopia registering a figure of almost 10 percent. This is exacerbated by a substantial negative impact on external balances, as well as a small impact on financial sector-soundness in the other countries. The overall impact on fiscal positions is a likely increase in current budget spending and deterioration in the fiscal balance and weak adaptation capacity.

Despite the downtrend in global agriculture commodity prices, the drought has resulted in an increase in domestic food prices in the region. Cereal prices (e.g. maize) have gone up by about 130 percent, while those of critical food items such as oils, beans and wheat flour increased by at least 50 percent in some pastoralist areas. The limited financial and institutional capacity for effective adaptation to reduce exposure and vulnerability will result in limited safety net to the most vulnerable households.

Drought Response in the Horn of Africa

With the early warning and technical assistance provided by IGAD, Member States have initiated early action to mitigate the adverse impact of the current drought.

Somalia and South Sudan have declared drought emergencies. Kenya announced a doubling of expenditure on food relief to ease the pressure in the drought-affected counties, while Uganda shifted some of its development resources to finance emergency response in order to address food insecurity and livelihood protection. In Somalia, the President of the Federal Republic, as well as state and regional administrations led the issuance of appeals for support and coordinated actors and efforts that scaled-up food security activities to respond to the humanitarian needs of the country.

The USD 730 million allocated by the Federal Democratic Republic of Ethiopia boosted the response effort which, coupled by an above-average meher harvest, resulted to an almost 50 percent reduction in the number of food insecure people, for example, from 10.2 million to 5.6 million.

IGAD continues to reinforce the actions of its Member States using them as guide for complementary action on drought responses. Below are some of the major actions being undertaken by the IGAD Secretariat and its specialized institutions to manage the drought in the region:

• Through its specialized institutions, IGAD continues to monitor and provide analysis of the evolving situation and advise Member States and the general public on measures to mitigate its impact. The 45th Greater Horn of Africa Climate Outlook Forum (GHACOF 45), which ends today in Addis Ababa, Ethiopia, will present the consensus climate outlook for the next season (March – May 2017) and its likely impact on disaster risk management, livestock production, water, energy and health etc.
• A multi- humanitarian coordination mechanism led by IGAD that includes UN agencies, Civil Society Organizations (CSOs), and other Non-State Actors (NSAs) is effectively working to coordinate the response effort, as well as guide the recovery process once the situation stabilizes.
• IGAD is also working with relevant national authorities, UN agencies and CSOs in each member state on the development of an Integrated Regional Appeal that will articulate the priority initiatives within the response plan for each Member State.
• Furthermore, IGAD will support institutional arrangements and capacity building that needs to be in place to allow humanitarian response plans to be implemented in timely, effective manner.
• A regional Ministerial Meeting will be convened by IGAD at the end of this month to launch the Integrated Regional Appeal and secure financial resources, which further complements the response undertaken by national authorities and humanitarian and development partners, while at the same time building resilience to climate-induced disasters.

Through the IGAD Drought Disaster Resilience and Sustainability Initiative (IDDRSI) Platform, the ultimate purpose and objective of IGAD and its Member States is to mitigate the adverse effects of disasters through building resilience of relevant national institutions, communities and people, to end drought emergencies and contribute to the achievement of sustainable development in the region.

In this regard, IGAD will remain vigilant in monitoring and advising the people of the region on the drought situation through its’ specialized institution, the IGAD Climate Prediction and Application Centre (ICPAC) domiciled in Nairobi, and shall continue to support and complement regional and national actions on drought response and recovery.

Kenya: “Re: Termination of the Kenya Electoral Assistance Program 2017” (20.12.2016)

With continued drought, Horn of Africa braces for another hunger season (20.12.2016)

Agricultural support critical now to protect livestock, equip families to plant in rainy season.

ROME, Italy, December 20, 2016 – Countries in the Horn of Africa are likely to see a rise in hunger and further decline of local livelihoods in the coming months, as farming families struggle with the knock-on effects of multiple droughts that hit the region this year, FAO warned today. Growing numbers of refugees in East Africa, meanwhile, are expected to place even more burden on already strained food and nutrition security.

Currently, close to 12 million people across Ethiopia, Kenya and Somalia are in need of food assistance, as families in the region face limited access to food and income, together with rising debt, low cereal and seed stocks, and low milk and meat production. Terms of trade are particularly bad for livestock farmers, as food prices are increasing at the same time that market prices for livestock are low.

Farmers in the region need urgent support to recover from consecutive lost harvests and to keep their breeding livestock healthy and productive at a time that pastures are the driest in years. Production outputs in the three countries are grim.

Rapid intervention

“We’re dealing with a cyclical phenomenon in the Horn of Africa,” said Dominique Burgeon, Director of FAO’s Emergency and Rehabilitation Division. “But we also know from experience that timely support to farming families can significantly boost their ability to withstand the impacts of these droughts and soften the blow to their livelihoods,” he stressed.

For this reason, FAO has already begun disbursing emergency funds for rapid interventions in Kenya and Somalia.

The funds will support emergency feed and vaccinations for breeding and weak animals, repairs of water points, and seeds and tools to plant in the spring season. FAO is also working with local officials to bolster countries’ emergency preparedness across the region.

“Especially in those areas where we know natural hazards are recurring, working with the Government to further build-up their ability to mitigate future shocks is a smart intervention that can significantly reduce the need for humanitarian and food aid further down the line,” Burgeon said.

Kenya is highly likely to see another drought in early 2017, and with it a rise in food insecurity. Current estimates show some 1.3 million people are food insecure.

Based on the latest predictions, the impacts of the current drought in the southern part of the country will lessen by mid-2017, but counties in the North – in particular Turkana, Marsabit, Wajir and Mandera – will steadily get worse.

Families in these areas are heavily dependent on livestock. Now, with their livelihoods already stressed – the last reliable rain they received was in December 2015- they will get little relief from the October-December short rains, which typically mark a recovery period but once again fell short this season.

In the affected counties, the terms of trade have become increasingly unfavourable for livestock keepers, as prices of staple foods are rising, while a flood of weakened sheep, goats and cows onto local markets has brought down livestock prices.

To ensure livestock markets remain functional throughout the dry season in 2017, FAO, is training local officials in better managing livestock markets — in addition to providing feed, water and veterinary support.

After two poor rainy seasons this year, Somalia is in a countrywide state of drought emergency, ranging from moderate to extreme. As a result, the Gu cereal harvest – from April to June – was 50 percent below average, and prospects for the October-December Deyr season are very grim.

To make matters worse, the country’s driest season – the Jilaal that begins in January- is expected to be even harsher than usual, which means Somali famers are unlikely to get a break anytime soon.

All indications are that crop farmers are already facing a second consecutive season with poor harvest. Pastoralists, meanwhile, are struggling to provide food for both their families and livestock, as pasture and water for grazing their animals are becoming poorer and scarcer by the day – in the south, pasture availability is the lowest it has been in the past five years.

Some five million Somalis are food insecure through December 2016. This includes 1.1 million people in Crisis and Emergency conditions of food insecurity (Phases 3 and 4 on the five-tier IPC scale used by humanitarian agencies). This is a 20 percent increase in just six months.

The latest analysis forecasts that the number of people in Crisis and Emergency conditions of food insecurity may further rise by more than a quarter of a million people between February and May 2017. Similar conditions in 2011 have resulted in famine and loss of lives, and therefore early action is urgently needed to avoid a repeat.

FAO calls on resource partners to urgently scale up assistance in rural areas, in the form of cash relief, emergency livestock support and agricultural inputs to plant in the April Gu season.

If farmers cannot plant during Gu – which traditionally produces 60 percent of the country’s annual cereal output — they will be left without another major harvest until 2018.

Farming families in Ethiopia, meanwhile, are extremely vulnerable as they have not been able to recover from the 2015 El Nino-induced drought. Some 5.6 million people remain food insecure, while millions more depend on livestock herds that need to be protected and treated to improve milk and meat production. Here, too, better access to feed and water is critical.

The crop situation is relatively stable after the country completed the most widespread emergency seed distribution in Ethiopia’s history. FAO and more than 25 NGOs and agencies reached 1.5 million households with drought-resistant seeds.

As a result of enabling farming families to grow their own food, the government and humanitarian community saved close to $1 billion in emergency aid, underlining that investing in farmers is not only the right thing to do but also the most cost-efficient.

FAO’s Early Warning early action work

Somalia and Kenya are among the first countries benefiting from FAO’s new Early Warning Early Action Fund (EWEA). The fund ensures quick activation of emergency plans when there is a high likelihood of a disaster that would affect agriculture and people’s food and nutrition security.

The fund will be part of a larger Early Warning Early Action System that tracks climate data and earth imaging to determine what areas are at risk of an imminent shock and will benefit from early intervention.

Kenya: Governor Kidero & Prof. Swazuri plans for ‘Housing Estates’ at the land of Uhuru Secondary School