Kenya's persistent trade squabbles with Tanzania

Thursday August 9 2018

Trucks wait to cross into Tanzania from Kenya at the Namanga border post. FILE PHOTO

Trucks wait to cross into Tanzania from Kenya at the Namanga border post. Nairobi and Dar are yet to fully resolve long-running trade disputes that have seen blockage of goods at the Namanga border. FILE PHOTO | NMG NATION MEDIA GROUP

By BUSINESS DAILY
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Trade relations between Nairobi and Dar es Salaam have appeared to sour in recent years because of tariff and non-tariff barriers.

The two squabbling neighbours are yet to fully resolve long-running trade disputes that have seen blockage of goods at the Namanga border despite being signatories to the EAC Common Market Protocol, which allows free movement of goods, services, capital and labour within the bloc.

The persistent squabbling has thrown trade flow across the neighbouring countries into a tailspin and eventually forcing a truce at ministerial level on July 5.

The truce followed a directive by President Uhuru Kenyatta and his Tanzanian counterpart John Magufuli last February.

Bilateral meetings

A joint statement on July 5 following months of bilateral meetings between Kenya’s Trade PS Chris Kiptoo and his counterpart Elisante ole Gabriel said a truce over trade tensions had been reached.

“The two partner states have called for effective and timely implementation of agreements made during bilateral meetings with a view to ease the flow of goods and services,” read a joint communique from Dar.

The deal with Dar was reached after Nairobi agreed not to ask for an extension of a stay on duty on textiles from EAC secretariat, meaning EPZ textiles firms will pay tax if they sell within EAC.

“We are making progress. There’s now improved relations between us and Tanzania. There’s an open channel; I can call the (Tanzanian) PS, he can also call me any time and resolve issues,” Dr Kiptoo said on June 28.

“I have really focused on this from last year…although there are other issues beyond us because they relate to other institutions such KRA, TFDA and TRA.”

Latest protests

The latest protests on Saturday that saw transport and business paralysed at the Namanga border, however, indicate that the problems has yet to be resolved.

The Kenyans were protesting mistreatment by the Tanzanian authorities after several milk traders were arrested and taken into custody.

The latest incident piles on to the recent spats between the two countries, which highlights an increasingly strenuous relationship.

Here are some recent examples:

  • Ban on LPG exports: Some of the past spats include the ban by Kenya on liquefied petroleum gas (LPG) from Tanzania citing consumer safety concerns in April last year, a move which saw Dar retaliate by blocking Kenyan milk and milk products, and cigarettes.
  • 1,300 heads of cattle seized: Tanzania last October also seized and auctioned estimated 1,300 heads of cattle that had crossed over in October 2017 before burning alive about 6,500 day-old chicks a month later, sparking a bitter protest from Nairobi.
  • Duty-free goods blocked: Earlier in this year, Tanzania blocked duty-free entry of Kenyan sugar confectionery, juice, ice cream and chewing gum over suspicion of use of zero-rated industrial sugar, which tilted competition in favour of Kenyan firms. The restricted entry was also extended to textiles made by firms in the Export Promotion Zones which enjoy tax incentives.
  • Unnecessary demands: Kenyan manufacturers have over the years accused Tanzania Food and Drugs Authority (TFDA) and Tanzania Revenue Authority of erecting unnecessary trade barriers such as demanding re-testing of goods before entry.