Kenyans have been put on a high alert over a possible increase in maize and wheat flour prices, just a day after the National Assembly opposed the introduction of VAT on the commodities as proposed by the Finance Bill 2022.
In a statement by the Kenya Association of Manufacturers (KAM) and Cereal Millers Association (CMA) dated Wednesday, May 25, the millers noted that the country was facing a shortage of maize and wheat owing to the ongoing war between Russia and Ukraine.
Further, the associations called on the government to form an emergency committee to discuss the looming shortage and draft strategies to cushion Kenyans from the already high flour prices.
The association called on the government to partner with neighboring countries such as Tanzania to allow for import of excess grains at their disposal.
“It is also critical that the government supports transport and logistics for the importation of maize from these countries,” the millers stated.
Additionally, the millers urged the government to exempt the commodities from taxes stating that the move will help them regulate the retail prices, further explaining that the tax exemptions will see the prices of flour drop in the coming months.
“The government should grant full duty exemption to bona fide food and feed millers charged on wheat for a period of 12 months to cushion consumers.
“In addition to this, the high and volatile international prices have resulted in unprecedented retail prices. A 2kg packet of maize flour is currently retailing at approximately Ksh155 to Ksh165, whereas that of wheat is Ksh185 to Ksh195,” the millers stated.
The increase in wheat flour prices in recent weeks has seen prices of some products such as bread go up by close to Ksh10.
In a report that was tabled before Parliament on May 25, the National Assembly Finance and National Planning Committee led by Homa Bay Woman Representative, Gladys Wanga, indicated that the introduction of VAT on the commodities would increase the cost of living, which is already a burden to many Kenyans.
The committee noted that while the government wanted to finance the 2022-2023 budget, there were other avenues of meeting the revenue targets.
“The committee observed that the amendment will increase the price of maize flour, cassava, and wheat flour. The committee recommends the deletion of the proposal as contained in the Finance Bill 2022,” the Wanga-led committee stated.