The love-hate relationship of Kenya and Somali and the effect on their economies

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BY FUAD ABDIRAHMAN

The Somalia Miraa Traders Association has banned khat from Kenya, choosing to stand with their Government after Kenya severed diplomatic ties with their country following a maritime territorial dispute. Instead, the traders are now getting their khat from Ethiopia.

For Kenya, this means loss of millions of dollars in revenue from the miraa trade. One needs just to look back a few years to know why the Somalia miraa market means a lot for Kenya. Somalia has been able to leverage this advantage to blackmail and arm-twist the Nairobi Government. A few years back, Somalia closed the market for Kenya to force the later to rescind their decision to close all refuge camps hosting Somalis in Kenya. They had both their say and way.

Somalia forms one of the biggest miraa markets in the world for Kenya. Numerous cargo planes full of miraa are known to leave Nairobi for Somalia’s capital, Mogadishu, on a daily basis. According to the Kenya National Bureau of Statistics, over 50 tones of miraa leave Kenya daily, bringing millions of dollars into the economy with huge benefits going to the miraa farming regions of Mt Kenya including Meru, Embu and Tharaka Nithi counties.

Nyambene Miraa Traders Association spokesman Kimathi Munjuri says initially over 20 flights used to ferry mira to Somalia daily but a day after the diplomatic rift between the two nations only 4 flights on average leave the country with Miraa.

Kimathi also says that Somali authorities treat Kenyan khat traders unfairly. Ethiopa khat traders, he says, enjoy better rates than.

“The khat from Ethiopia is enjoying lower taxes in Mogadishu while Puntland slapped a $5 (Sh500) tax per kilo on miraa which cannot be transferred to the farmer,” he decries.

The association terms the business relationship between Kenya and Somalia as blackmail used by the Somali authorities. “Miraa is the soft spot targeted by Somalia whenever it wants to seek attention from Kenya. We ought to be preparing for the worst,” says Mr Munjuri.

Miraa farmers could lose upto 90% of the market if the diplomatic spat between Kenya and Somalia is not resolved. Other markets for miraa across the globe have already been banned causing business losses to the miraa growing communities of Mt Kenya, especially the Meru people who mainly rely on the crop as their main cash crop.

The complicated trade ties between the two nations is an on off issue. In February 2017, Kenya’s miraa traders withdrew exports to Somalia after the latter introduced high taxes. It took intervention by the Kenyan government to drop the new taxes for trade to resume.

“It is time the miraa taskforce report implementation technical team prioritized looking for new markets,” Kimathi says.

Now that the Somali traders of khat have opted for the Ethiopian khat which enjoys lower rates of taxation, it is unknown where khat from Kenya will go. What is certain however, is the drastic financial difficulties the miraa farming counties, and by extention, the national government will face in the period of the standoff.