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July 06, 2008

Kenya cancels sugar import permits to protect local farmers

Kenya has cancelled the licences of all its 55 sugar importers saying they had misused them, evaded taxes and that their imports were hurting local farmers, the agriculture minister said on July 5.

Kenya, a net importer of sugar, produced 475 670 t of sugar in 2006. Critics have long complained that procedures involved in granting sugar import and export licences were riddled with irregularities.

Agriculture Minister William Ruto said his decision to scrap all import licences was a follow up to last month's cancellation of all but two export licences. He said he cancelled the licences after finding out that the imported sugar went untaxed, thus encouraging local factories to stockpile their produce because they could hardly compete with imports.

"We have gangs hanging around Nairobi and Mombasa with friends in very high places pretending to be doing business with sugar and I was informed that they were very powerful people, very influential people," Ruto said.

"There are 55 licences and I have cancelled all of them. I want anybody to come and explain ... why we don't have legally imported sugar in the country and why the factories have stockpiled their produce from farmers because they cannot sell."

Kenya has been allowed to set a limit of 200 000 t of sugar that can be imported tax-free under rules of trade in the 19-member Common Markets for Eastern and Southern Africa economic bloc.

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