Bloomberg News

Kenya to Cut Food Duties, Boost Output to Fight Inflation

October 20, 2011

(Updates with president’s comment in second paragraph.)

    Oct. 20 (Bloomberg) -- Kenya, East Africa’s biggest economy, plans to slash duties on imported staple food and to subsidize fertilizers for farmers in a bid to fight inflation, President Mwai Kibaki said.

“I wish to assure Kenyans that the government is taking both long and short-term interventions to make life affordable, especially to the low income group in our country,” Kibaki said today in a speech marking Heroes Day.

Inflation accelerated to 17.3 percent last month, more than triple the government’s 5 percent target. Kenya’s central bank on Oct. 5 raised its benchmark interest rate by 4 percentage points to a record 11 percent to bolster the shilling, one of the world’s worst-performing currency this year.

The government will give farmers 700 million shillings ($7 million) to grow drought-resistant crops such as sorghum, millet and cassava and will invest 4.8 billion shillings to ensure availability of fertilizer, Kibaki said.

“We will also be establishing a permanent fertilizer and seed fund to address concerns of farmers in the long term,” he said.

--Editors: Karl Maier, Claudia Maedler

To contact the reporter on this story: Eric Ombok in Nairobi at

To contact the editor responsible for this story: Shaji Mathew at

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