KAM seeks sugar levy exemptions to boost Kenya’s competitiveness in regional, global markets 

KENYA – The Kenya Association of Manufacturers (KAM) has called for targeted exemptions from the Sugar Development Levy (SDL) to improve the competitiveness of Kenyan sugar in regional and international markets.  

The proposals were presented during a consultative meeting with the Kenya Sugar Board CEO, Jude Chesire, where stakeholders discussed the challenges facing sugar manufacturers and processors, particularly in relation to the levy’s financial impact. 

Reintroduced in July 2025, the SDL has added cost pressures on millers and importers by taxing ex-factory sugar prices as well as imported sugar.  

KAM noted that the levy has contributed to rising production expenses at a time when the industry is already grappling with a 16% decline in national sugar output during the first half of 2025 due to high operating costs and supply constraints. 

To address these challenges, KAM requested several key reforms. These include exempting sugar exports from the SDL to enhance regional and global market competitiveness, and exempting registered manufacturers who import white refined industrial sugar strictly for industrial use.  

According to KAM, such measures would lower production costs, support industrial growth, and strengthen Kenya’s position within the East African and global value chains. 

KAM also urged the development of a comprehensive five-year strategic plan to boost sugarcane production. The plan would aim to ensure consistent supply for both domestic consumption and industrial applications, stabilizing the sector and improving long-term sustainability. 

The Kenya Sugar Board reaffirmed its commitment to supporting manufacturers, noting ongoing efforts to push for the removal of the proposed KES 7.5 increase in excise duty on imported sugar and to advocate for the elimination of biosafety fees levied on producers. The excise duty, imposed in late 2024, had risen from KSh5 (US$0.039) to KSh7.5 (US$0.058) per kilogram, adding further strain to the industry. 

Sector stakeholders emphasised that while certain levies have increased operational burdens; particularly in western Kenya, where sugarcane farming is heavily concentrated, some were designed to bring long-term improvements to the industry. 

The SDL, if effectively managed, could help reverse recent declines by funding sector revitalization efforts. 

KAM noted that the proposed five-year production plan would help stabilize prices for farmers, reduce reliance on imports, and support broader economic growth. 

Government initiatives, including mill leases and private investment incentives, are intended to advance Kenya’s goal of attaining sugar self-sufficiency by 2027. 

The consultation reflects growing collaboration between regulators and manufacturers aimed at reviving the sector, safeguarding local production, and strengthening the country’s industrial competitiveness. 

Sign up HERE to receive our email newsletters with the latest news and insights from Africa and around the world, and follow us on our WhatsApp channel for updates.