Kenyan traders of the local stimulant, miraa, are thrilled with the news that Somaliland has decreased the tax on the Kenyan version.
Previously, the tax on Kenyan produce was three times higher than that imposed on the Ethiopian khat. According to the Somalia Finance Ministry records, the region imported 44,958 tonnes of khat in 2021.
The Somaliland customs department announced that miraa from Ethiopia and Kenya will now be taxed equally at $3.78 per kilogram. This new directive, which took effect on January 23rd, replaces the previous system where Ethiopian traders paid $1.57 per kilogram of miraa while Kenyan traders paid $4.50.
The Nyambene Miraa Trade Association spokesperson, Kimathi Munjuri, expressed support for the change, stating that the previous unequal taxation had prevented Kenyan traders from accessing the profitable market.
We have not penetrated Hargeisa, the capital of Somaliland, because of the monopoly and undue advantage Ethiopian businesses enjoyed. We have only been delivering two tonnes to Lasanood, but the latest conflict disrupted the trade.
Spokesperson for the Nyambene Miraa Trade Association – Kimathi Munjuri
Mr Munjuri stated that Kenya can transport 60 tons of miraa to Hargeisa City every month, adding that the country has received orders of five tons from Somalia in the past but now has the opportunity to increase this number to over 20 tons by April. He emphasized the importance of having a level-playing field in trade. Furthermore, Mr Munjuri urged the Ministry of Agriculture to reinstate the Miraa Fund and provide irrigation in growing areas.
Kenya has been striving to break into the Somaliland market. However, their efforts have been met with opposition from Somalia. In 2020, President Kenyatta and Somaliland’s leader Bihi reached an agreement for direct flights to Hargeisa and recognition of Somaliland travel documents; these bilateral agreements were not implemented after Somalia barred two cargo flights due to alleged airspace violations.
Despite this setback, the amount of miraa exported to Mogadishu increased from 20 to 50 tons in just one day. Nyamita is pushing for the government to abolish a KES 550 per kilo commission introduced on the Mogadishu route last year. Traders also advocate for the government to open trade with Djibouti, which has expressed interest in purchasing Kenyan khat.
Read Also: Relief for Kenyan Traders as Somalia Doubles Miraa Export Cap to 50 Tonnes
