Business

Kenya in tiff with Uganda over barriers

Wednesday, December 9th, 2020 00:00 | By
Kenya Association of Manufacturers. Photo/Courtesy

Tension is simmering between Kenya and Uganda as trade and industry officials from both countries start negotiations following demand that Kenya’s exports be denied entry before Christmas.

Kenya Association of Manufacturers (KAM) said yesterday its representatives would meet Ugandan officials to resolve the trade dispute after Ugandan manufacturers accused Kenya of blocking their milk, sugar and beef from entering the neighbouring country.

“KAM is aware of the concerns raised by Uganda’s manufacturers, we will be engaging the ministry of Industrialisation to assess the issues to be addressed,” KAM said, adding that a preparatory meeting had  started ahead of the bilateral meeting.

In recent years, Kenya’s agricultural sector has faced stiff competition from both Uganda and Tanzania, with Kenyan farmers protesting the local market is flooded with cheaper imports from the region.

But Kenyan officials’ explanation to farmers that they are honouring free market agreement has not been sufficient as tension abounds.

Ugandan manufacturers

The move comes even as Uganda Manufacturers Association (UMA) says Kenya is engaging in oppressive trade practices by blocking the entry of their goods into Kenya.

They now want the government of Uganda to take action before Christmas.  In a statement, the Uganda Manufacturers Association (UMA) expressed frustrations “over government’s inability to decisively resolve the unfair trade practices subjected to Uganda by Kenya in blatant disregard to the EAC common market commitments.”

UMA Executive Director Daniel Birungi said Uganda cannot be converted into a supermarket for imported goods from Kenya while her products are blocked from entering countries that benefit from its market

Birungi said Uganda currently has a sugar surplus but cannot easily export it to Kenya.

“We can not always be the good partner, if Ugandan goods are being denied entry into Kenya then maybe we should as well retaliate with the same approach,” said UMA in it’s official social media platforms.

Kenya exports Sh61 billion worth of animal and vegetable fats, mineral fuels, iron and steel, salt, sulphur, plastics, vehicles, paper, pharmaceutical products to Uganda annually.

However, whereas Kenya’s exports to Uganda have remained relatively unchanged, Uganda’s exports to Kenya have almost tripled from Sh17.5 billion in 2014 to Sh49.4 billion in 2018.

Uganda’s surplus sugar production continues to pose challenges to Kenya’s struggling sugar sector. Kenya has been obtaining Comesa tariff safeguards year on year and it just got another extension.

Uganda is the largest buyer of Kenya’s finished products meaning the retaliatory action could result in serious consequences for Kenya and will be a blow to intra-Africa trade.

Comparison with counterparts reveals that Kenyan manufacturers and farmers suffer from high cost of inputs, power and labour making their products uncompetitive in the export market especially compared to East African nations.

Kenyan poultry farmers have in the past protested stiff competition from Uganda’s eggs blaming their woes on high cost of animal feeds in Kenya.

The CS for Trade and Industry Betty Maina was not available to comment on the matter.

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