Uhuru visit to Uganda unlocks trade in cheap sugar and meat

Tuesday August 11 2015

President Kenyatta and his Ugandan counterpart Yoweri Museveni during bilateral talks at State House, Kampala on Saturday. PHOTO | PSCU

President Uhuru Kenyatta and his Ugandan counterpart Yoweri Museveni during bilateral talks at State House, Kampala on Saturday. PHOTO | PSCU 

By NEVILLE OTUKI, [email protected]

Kenya and Uganda have struck a deal allowing cheaper Ugandan sugar into the Kenyan market, ending the long-running feud over the trading of the commodity across their common border.

The deal President Uhuru Kenyatta signed with his Ugandan counterpart Yoweri Museveni in Kampala also clears the way for Kenyan traders to export beef to Uganda under similar terms, deepening the commercial ties between Kampala and East Africa’s largest economy.

The agreements were signed during Mr Kenyatta’s three-day visit to Kampala where he held bilateral meetings with his host Mr Museveni and addressed the Ugandan parliament.

Ministry of Trade officials said they were expediting issuance of import permits to Ugandan sugar traders to enable them feed the undersupplied Kenyan market.

Kenya has had a near diplomatic stand-off with Kampala over the Ugandan traders’ quest to export sugar to the region’s largest economy, arguing that the country did not produce enough sugar to meet its consumption needs and would therefore not have excess to export.

The Kenyan authorities have maintained that Ugandan traders were importing sugar cheaply for repackaging and exporting to lucrative markets such as Kenya.

Uganda has strongly defended itself against the allegation, arguing it has excess production capacity that can produce sugar for export to the Common Market for Eastern and Southern Africa (Comesa).

Foreign Affairs and International Trade secretary Amina Mohamed said the slow pace of processing of permits for Ugandan sugar exporters was behind the stalemate, adding that the issue had been resolved.

Mrs Mohamed said the delays had been caused by Kenya’s re-organisation of ministries and directorates in the sector, including the Kenya Sugar Board which is now a unit within the Agriculture, Fisheries and Food Authority (AFFA).

The AFFA, however, maintained yesterday that the agreement did not provide for free flow of Ugandan sugar into Kenya but a guided movement of the lucrative commodity to prevent the flooding of the Kenyan market and killing local millers.

“The imports would have to be based on Kenya’s deficit,” said AFFA director-general Alfred Busolo.

Uganda has continually faulted Kenya’s 2012 decision to block sugar imports from the neighbouring country in violation of the East African Community (EAC) common market protocol, which provides for free movement of goods without restrictions.

Kenya’s sugar market remains protected from cheaper Comesa imports under special safeguard measures that were supposed to end in January 2012 but have since been extended annually at the request of Nairobi.

Uganda produces about 465,000 tonnes of sugar against a consumption of 320,000 tonnes, leaving it with a 145,000-tonne surplus.
Kenya produces 650,000 tonnes of sugar against a demand of 860,000 tonnes, leaving a 210,000-tonne deficit that is met through imports, according to the AFFA.

Kenyan authorities have in the past couple of years capped sugar imports at 300,000 tonnes to protect local millers.

“We have a deficit of 110,000 tonnes of table sugar and import all our industrial sugar which is not produced locally,” said Mr Busolo.

Mr Kenyatta and Mr Museveni yesterday underscored the critical role that bilateral trade, investments and security play in forging regional integration.

President Kenyatta cited the economic benefits East Africa would reap from closer cooperation in areas such as infrastructure development and interconnectivity.

This story was first appeared on the Business Daily. Read the rest of it here.