Kenya has an ongoing problem of smuggled ethanol that dates back to 2019 and even further. Three years ago, in April, it was reported that officials from Kenya's Directorate of Criminal Investigations faced off with police who were alleged to have been bribed to protect an impounded vehicle planning to smuggle ethanol out of the Kitengela suburb. Back then, this black market activity cost the economy approximately $49 million per annum. However, today the figure stands at over $250 million yearly.
Porous borders due to corruption and feeble control remain the number one reason bootleggers continue to thrive in Kenya. Smugglers also take full advantage of the country's low export taxes and excise duties between Kenya and Tanzania. More reports surfaced last June where Kenyan authorities confiscated 29 000L of ethanol travelling from Uganda en route to Ethiopia. A further 30 000L of ethanol worth $60 451 from Tanzania was seized that same month. Smugglers can successfully carry out their operations by exporting the ethanol to Tanzania, bringing it back into Kenya, and distributing it to liquor producers.
The smuggled ethanol is solicited by illegal alcohol producers who brew a cheap and destructive type of spirit called "chang'aa," which means "kill me quickly." The popular drink has a vast history with the Kenyan population. For many years, under prohibition, liquor establishments would "fortify" their brew with toxic chemicals such as jet fuel, embalming fluid, or battery acid to make it stronger. As a result, Chang'aa consumers are known to suffer from blindness or die because of methanol poisoning. This prompted the Government's response to legalise the drink in 2010 in hopes that this would drive business away. Unfortunately, unlicensed and unregulated production and sale of the spirit and its many variations continue.
Kenya's ethanol smuggling issue has not only been at a grassroots level. In 2015 multiple Kenya Revenue Authority officials and members of Mumsia Sugar Company, which had recently expanded into ethanol production, were exposed for their plan to distribute falsely identified volumes of ethanol meant for export domestically. Furthermore, the plan was put in place to evade taxes. "A litre of ethanol meant for export is currently priced at Sh93. Kenya charges an additional Sh220 per litre in duty if the product is for the domestic market. However, for export, the Government charges no taxes." the Standard reported.
The Kenyan Government implemented the tax stamp system to curtail this illicit trade in 2016. the tax stamps allow products to be traced from producer to retailer using electronic communication. Over and above that, the Government has beefed up border patrol and surveillance, and thus far, approximately 115 illegal ethanol plants have shut down. Despite these efforts, however, the problem persists.
The complicated nature of this trade makes it extremely difficult to eradicate. More efforts are required from the Government to ensure that those complicit in exporting ethanol are prosecuted and the existence of the illegal alcohol producers is lessened.