Gerald Andae
Kenya’s miraa exports are taking a severe blow from steep levies, compelling traders in Somalia to halt purchases of the stimulant from Kenya due to its dwindling competitiveness in the market.
This development is adversely impacting local farmers who are unable to sell their produce due to the lack of market options, given that Somalia stands as the primary destination for miraa exports from Kenya.
To access the lucrative Somali market, Kenya’s stimulant is burdened with a hefty $4.5 levy per kilogramme, rendering it financially unviable for buyers in Mogadishu.
Kenya’s miraa traders argue that with the commission in place, the stimulant in Mogadishu must sell for upwards of $30 for a bundle, which many consumers cannot afford.
“With the effective rationalisation of the costs, the ideal price at the moment, with the current rains should be $15 per bundle,” said Chairman of the Nyambene Miraa Traders Association (Nyamita), Kimathi Munjuri.
the expensive nature of the Kenyan miraa has seen those from Ethiopia gain favour among buyers, overshadowing the Kenyan product.
“The imposition of this levy has significantly inflated miraa prices, rendering it inaccessible to consumers in Somalia,”
Mr Munjuri further highlighted the predicament faced by airlines involved in miraa transportation, as they grapple with idle capacity due to restricted shipment quotas imposed by cartels, leading to underutilisation of aircraft purchased specifically for servicing the stimulant trade.
Miraa plays a pivotal role in Kenya’s foreign exchange earnings, having contributed over Ksh50 billion since the resumption of exports to Somalia in July 2022.
Despite efforts by elected leaders from Meru to broker a resolution, their interventions have not yielded tangible results.
The industry lobby has vehemently criticised the government for neglecting the plight of producers, attributing the current predicament to governmental inaction against cartels responsible for imposing the punitive levy.
Expressing disappointment, the lobby emphasised the need for urgent dialogue between the Kenyan and Somali governments to dismantle the cartel network, reassess shipment quotas, and review import duties imposed in Somalia.
“We implore our government to fulfill its pledge of dismantling these cartels siphoning off commissions, as promised by the President,” remarked Munjuri, underscoring the urgency of the situation.
Source: Business Day Africa
