Kenya, Uganda and Tanzania, in their budget proposals for the 2008/2009 financial year, have given priorities to measures to cushion their populations against soaring food prices. During the budget presentation, which was read concurrently with those of uganda and Tanzania, Amos Kimunya, the Kenyan finance minister, said the government has zero-rated value added tax, , VAT, on wheat flour, milk, and maize flour.
Kimunya said he would also be proposing to remove tax on bread and rice while reducing the import duty on wheat to 10 per cent from 35. He added that Kenyan government has decided to allow a tax-free importation of maize, to boost the country’s strategic grain reserve to eight million bags.
The current poor maize harvest has been attributed to the post-election violence which affected farming activities in the fertile Rift Valley region where much of the crop is grown in the fertile Rift Valley region where much of the crop is grown in the country. Additional funding had also been allocated for the resettlement of internally displaced persons.
The minister said discussions are under way with Uganda and Tanzania on setting up a regional fertilizer factory to offset high costs and ensure long-term sustainable supplies. The cost of fertilizer has almost tripled in Kenya since the beginning of 2008.” further provisions will be made to give farmers access to affordable credit. At least 25,000 farmers have benefited from three billion shillings ( $ 48 million) provided under an existing seasonal credit loans scheme”, Kimunya said.