Kenya’s Sugar Tax Hike Opens Fresh Battle Over Trade and Consumer Prices

Kenya’s decision to sharply raise excise duty on imported sugar has triggered protests from Ugandan manufacturers, opening a fresh debate over how far the country should go in protecting its local sugar industry.

Under the Finance Act, 2026, excise duty on imported sugar will rise from KSh7,500 per tonne to KSh40,000 per tonne from July 1. Ugandan sugar manufacturers say the increase will make their sugar less competitive in Kenya, a market that absorbs about 100,000 tonnes of Ugandan sugar annually.

Kenya’s argument is protection. President William Ruto has defended the increase, saying it is meant to safeguard 17 operational sugar factories, two million farmers and nearly 10 million people who depend on the local sugar value chain.
But protection also comes with trade-offs. Sugar is a basic household commodity, and higher taxes on imports could reduce competition, limit supply when local production falls short and push consumer prices higher. For Kenyan households already dealing with high food and transport costs, that adds another layer of pressure.

The dispute also puts the East African Community’s free-trade agenda under pressure. Uganda argues that the levy goes against earlier commitments by both countries to remove tariff and non-tariff barriers and allow goods to move more freely across the region.

So the real question is not whether Kenya should protect its sugar sector. It is whether protection can be done without punishing consumers or weakening the regional market Kenya also depends on.