KENYA – The government of Kenya is planning to stimulate domestic oil crop production from 5% to 25%, in a bid to reduce the country’s heavy reliance on imports hitting over KS 90 billion (US$716M).

According to the Budget Policy Statement released on February 15, edible oils, primarily palm oil, are the second largest import item after petroleum.

The country’s annual expenditure on edible oil was about KES60 billion (US$477M). The recent price surge pushed the import bill to over KS90 billion (US$716M), attracting government attention to the sector.

Kenya imports a lot of vegetable oils, including soybean, corn, and the widely used crude palm oil, primarily from Malaysia and Indonesia, which together account for more than 90% of the world’s supply

However, the shortage of cooking oil, and other food products such as maize, and wheat has again brought to the fore Kenyans’ chronic food shortage and over-dependency on imported food amid the struggling economic state.

The Treasury also noted that despite a galore of locally grown alternatives such as potatoes, and traditional cereals, the demand for common commodities is still high leading to higher retail prices.

The statement noted that the move is part of the government’s economic turnaround plan that will look into boosting local oil crop production and processing capabilities

To achieve this goal, the government will be taking several steps to support the development of oil cottage industries, as well as providing critical infrastructure such as Common Manufacturing Facilities (CMFs) and processing machinery for small industries

Additionally, existing processing capacity will be expanded to ensure that local industries meet the needs of the domestic market.

“The government will attract investment to support oil cottage industries; provision of CMFs and processing machinery for small industries,” reported the People Daily news

The statement noted that the government’s key priority focus is attracting investors to support the growth of the sector.

The government has also committed to creating a favorable environment for investment in the industry, providing incentives for businesses to invest in the production of edible oils, and encouraging the development of local processing facilities.

If successful, the move towards increased domestic production of edible oils will have a significant benefit for the country not only in reduction of dependence on costly imports but will also in boosting local agriculture and economy.

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