Iran seeks trade ties with East Africa

Saturday October 6 2018

The Kiira EV Smack was built by students of Makerere University. FILE PHOTO | SALATON NJAU

Ugandan-made Kiira EV Smack. Tehran has been keen to fund Kampala’s Kiira Electronic Vehicle Project. PHOTO | NMG 

By ALLAN OLINGO
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Iran is mounting a charm offensive in East Africa, seeking trade and investment opportunities barely two months after the region’s top two economies stopped oil and gas imports from Tehran ahead of the United States sanctions next month.

Iran's Vice President for Science and Technology Sorena Sattari was in Uganda and Kenya last week to explore business opportunities and boost bilateral trade ties tagging along government and business executives including those from petrochemicals.

On Tuesday, Mr Sattari met Ugandan President Yoweri Museveni in Kampala, where he said Tehran is trying to diversify its exports to the region.

The Iranian leaders visit comes barely a year after Iranian Minister for Foreign Affairs Mohammad Javad Zarif toured the region as the country tried to shake off the sanctions and seek new opportunities outside oil.

“Globally we are known for our oil and gas but we are now trying to move away from an oil based and dependent economy into a technology driven one and we believe the region offers us great opportunities to do this,” Mr Sattari said, adding that Tehran was ready to offer the region expertise in technology.

The visit to the region comes barely a month before the United States sanctions on Tehran’s oil and gas products come into effects, cutting off its exports to the world as Washington pushes for its isolation over its alleged nuclear weapons programme.

“We are happy to have a relationship with Iran, an influential partner that has over the years showed its resilience despite sanctions,” President Museveni said.

The EastAfrican understands that Tehran has been keen to fund Kampala’s Kiira Electronic Vehicle Project, which its Cabinet approved in mid-April.

Iran is also said to be interested in securing rights to the mining of the niobium mineral, a key component in the manufacture of car batteries, as well as to provide gas technical assistance with the country’s.

US sanctions

The US in May re-introduced sanctions on Iran to push it to abandon its nuclear programme, with President Donald Trump warning that he will push for sanctions against countries or firms that continue to trade with Iran, after Washington pulled out of the deal.

“The new sanctions relate to the purchase of petroleum products, which covers products obtained from the processing of crude oil (including lease condensate), natural gas, and other hydrocarbon compounds,” the US Treasury said in its updated factsheet on the Iran sanctions.

In July, Kenya and Tanzania pulled the plug on imports from Iran in the face of United States sanctions against countries that continue to trade with Tehran.

According to S&P Global, a New York-headquartered financial information and analytics firm, Tehran LPG exports in August were at their highest in more than two years at close to 600,000 metric tonnes with the bulk going to China.

“Customers like Kenya and Tanzania, which used to buy LPG from Iran, have stopped imports due to the upcoming sanctions. Kenya emerged as a consistent buyer of Iran's LPG since early 2016 but imports have stopped since July, according to tracking data,” S&P Global said in its latest analysis last week.

Kenya and Tanzania also leads the region as big importers of bitumen from Iran, with 60 per cent of the product being used in Kenya coming from Tehran and this is set to be affected by the sanctions.

Other products the region imports include industrial oils, urea, paraffin and fermented black tea. Kenya also boasts of more than 37 Iranian firms that have set up shop in the country.

Mr Sattari was also expected to meet Kenya’s top leadership and senior government officials after he touched down in Nairobi on Thursday evening.

In Nairobi, the delegation, through the Kenya National Chamber of Commerce and Industry also held the Kenya – Iran Business Forum.