Impact of recent policy reforms

Under the IMF/World Bank-sponsored economic recovery programme, the government adopted a policy framework which included liberalization of marketing and pricing of agricultural inputs. In line with the framework, the Agricultural Sector Adjustment Credit (ASAC) funded by IDA/World Bank set aside in January 1991 US$ 68 million specifically for agricultural input importation for four years. In addition, the following monetary and fiscal policy reforms that impinge directly or indirectly on the distribution and utilization of inputs in the country have been effected.

Devaluation

In July 1990, the government liberalized the exchange market by allowing private licensed Bureaux de Change to operate and compete at open exchange market rates.

Removal of subsidies on inputs

At present, there is no direct subsidy on any agricultural inputs. This was one of the World Bank's conditionalities that had to be met.

Taxes on inputs

Taxes on importation of agricultural inputs were removed in 1990.

Privatization of inputs manufacture

The current government policy is to encourage private sector participation in local production of inputs. At present only a few inputs including hoes, stock feeds, vaccines, day-old chicks and barbed wires are produced locally by joint ventures, private firms and private individuals.

Liberalization of input marketing

In the early 1980s the government had virtual monopoly on input importation, handling and distribution. Now, importation, wholesaling and retailing have all been liberalized.