Delayed Value Added Tax (VAT) refunds that have left many struggling to maintain their operations have put President William Ruto on the spotlight for touting the agricultural sector’s “stellar” performance in 2024 as farmers on the ground and stakeholders in the sector remain dissatisfied.

On his X account, Ruto shared milestones in the sector, emphasising his role in driving economic growth, by leveraging the agriculture sector.

“Meat exports generated $99.6 million (Sh12.84 billion) in 2024 while livestock insurance supported 238,394 TLUs, strengthening the sector’s resilience and contribution to Kenya’s economic growth. Ruto delivers numbers you can feel,” one of his posts read.

Another tweet celebrated an unusual achievement: “Goat semen production surged by 99.3 per cent, driving agricultural transformation in Kirinyaga County and enhancing local farming productivity and sustainability. Ruto delivers.”

He also noted that pasture seed distribution rose by 195.5 per cent, producing 17,402 bales of hay, which he claimed significantly supported sustainable livestock farming.

While these figures are striking and largely accurate, farmers paint a more sobering picture. According to many large operators, delayed tax refunds remain a thorn in the side of agricultural productivity. During a Federation of Kenya Employers (FKE) board meeting on the state of the business environment, President of the employers’ lobby Gilder Odera expressed concern over Sh12 billion in outstanding value added tax (VAT) refunds owed to farmers as a thorn in their flesh.

“Delayed VAT refunds totalling Sh12 billion continue to strain the agricultural sector,” she said. “These delays disrupt operations, hinder growth, and reduce employment opportunities, ultimately affecting the country’s economic progress.”

The impact of these delays is felt across various farming sectors. For instance, sugarcane farmers have benefited from increased production, but the underlying financial challenges persist.

According to data from the Kenya National Bureau of Statistics (KNBS), sugar deliveries rose significantly from 874,000 tonnes in the third quarter of 2023 to 2.5 million metric tonnes during the same period in 2024.

This improvement allowed Mumias sugarcane farmers to receive Sh150 million in bonuses, which President Ruto highlighted during an awarding ceremony in Kakamega County. “This is due to improved sugar production and sales proceeds,” he said at the event.

However, the bonuses were met with skepticism, given the financial woes that Mumias Sugar has faced over the past five years, including its suspension from trading at the Nairobi Securities Exchange in 2020. Critics question the sustainability of such pay outs, particularly in light of the unresolved VAT refund issues that continue to burden farmers.

Compounding the frustrations are policy contradictions that seem to undermine Ruto’s commitments to the agricultural sector.

Stakeholders in the fertilizer industry recently raised concerns over a Treasury proposal to reclassify fertilizer imports from zero-rated to tax-exempt status. “The reclassification means you will not be able to claim VAT on related services, such as packaging materials or transportation costs, making fertilisers more expensive,” said Lilian Mbuthia, a representative of the Fertilizer Association of Kenya (FAK).

“This contradicts the president’s long-standing efforts to make fertilisers more affordable and available to farmers.”

For farmers like John Kamau in Nakuru County, the delayed refunds and policy inconsistencies add layers of uncertainty to an already challenging environment.

“We hear about the achievements on TV and social media, but on the ground, we’re struggling to get refunds and access affordable inputs like fertilisers. It feels like we’re being left behind,” he said.

Despite these concerns, leather exports reportedly rose by 56.2 per cent, milk production reached 5.2 billion litres, and meat exports generated significant earnings. These figures underscore the sector’s potential to drive economic growth, but stakeholders insist that the success of agriculture hinges on resolving the structural issues holding farmers back.

Kenya’s agricultural sector recorded a modest 4 per cent growth in the third quarter of 2024, a decline from the 5.1 per cent growth achieved in the same quarter of 2023, according to KNBS data.

While improved sugar production and increased meat exports are notable achievements, the overall performance reflects challenges that need urgent attention. Stakeholders now call on the government to prioritise settling VAT refunds to farmers, which would inject much-needed liquidity into the sector and allow producers to reinvest in their operations.

“If the executive can address these pending refunds, we can unlock the full potential of the agricultural sector, ensuring food security and driving economic growth,” Mbuthia added.