Bring down production cost to boost export competitiveness

The fact that an egg from neighbouring Uganda can land in Kenya at a price as low as Sh1 betrays a hugely unfair common market. It demonstrates Kenya’s fast dwindling competitiveness. 

For long, Kenyan farmers have decried unprecedented flow of cheap eggs from Uganda. Indeed, most poultry farmers have given up on rearing chicken for eggs, selling them for meat instead. A fraction of the egg traders from Wangige market, one of the largest marketplaces for eggs, took to the streets recently, protesting against the cheap Kampala produce.

A tray of eggs is being sold at Sh200, over 20 per cent lower than it cost to buy 30 eggs some six months ago. According to figures from the Kenya National Bureau of Statistics (KNBS), 100,000 kilogrammes of eggs were imported from Uganda in December 2017 at a cost of Sh1.5 million, which translates to a Sh1 for an egg.

In 2018, Kenya imported 813,844 kilogrammes of fresh eggs from Uganda in the year to November. This was 11 per cent more compared to 730,834 kilogrammes of eggs that were imported in the same period in 2017.

The government is not convinced that there is evidence of dumping, and so will not ban Uganda egg imports. Nonetheless, Kenya must do something about the high cost of production. On eggs, for example, most analysts blame the government’s 2013 decision to introduce 16 per cent valued added tax on chicken feed.

And this applies to a range of other products for which the country seems to be losing its competitiveness to our neighbours.  Cheap products, irrespective of the source, go a long way in improving the livelihoods of consumers. If Kenyan producers cannot give consumers affordable products, consumers will source them from outside.