Kenyan President Uhuru Kenyatta early this week visited Rwanda for talks with President Paul Kagame and addressed top government and private sector officials at a national leadership retreat.
He then flew directly to Entebbe to meet Ugandan leader Yoweri Museveni, with whom he discussed local and regional issues, according to a brief statement from State House Kampala.
So far, details of President Kenyatta’s mission have been scanty. Observers say the Kenyan leader had stepped forward to mediate the dispute between Uganda and Rwanda, which has seemed to escalate over the past two weeks.
Uganda has accused Rwanda of introducing trade barriers along their common border, and Rwandan businesses are pushing for abandonment of the Northern Corridor—the key transport channel that runs from Mombasa port through Uganda—in favour of the Central Corridor from Dar es Salaam port through Tanzania.
Kigali and Kampala have traded accusations of espionage, harassment of citizens, blockage of the common border and erection of non-tariff barriers.
Rwanda, on February 28, announced the partial closure of the busy Gatuna border post and blocked its nationals from crossing into neighbouring Uganda.
While addressing the national leadership retreat at the Rwanda Defence Forces Combat Training Centre in Gabiro, President Kenyatta touted the importance of regional integration.
He praised Rwanda’s steady growth and ease of doing business policies, and reminded the leaders that it was their ultimate goal to deepen integration.
“We have many Kenyans living and working in Rwanda and they feel very much at home. We have very many Rwandans living and working in Kenya, really showing that we are brothers and sisters. As leaders, we must continue to deepen that integration,” he said.
“We have challenges, let us not hide those,” he added. “But I am convinced that with goodwill and good intentions for our people, we will resolve the challenges that are ahead of us.”
In what appeared to be shuttle diplomacy to ensure that the squabbles between Uganda and Rwanda don’t affect his country’s economy, President Kenyatta avoided taking sides in the dispute, leading analysts to consider him a worthy mediator.
Few appeared to remember that President Kenyatta’s intervention, though abrupt, was deeply anchored in the quest to defend Kenya’s national interests considering the risk to the flow of goods from Mombasa port into the East African hinterland, which includes eastern Congo.
Kenya is the gateway to the landlocked countries in the Great Lakes Region through the Northern Corridor, and the standoff means potential losses of millions of dollars.
For instance, when Rwanda partially closed its Gatuna border post, some 37 Kenya-registered trucks were among those left stranded.
Uganda-registered trucks were the majority—about 50—and nine were Burundian.
Rwanda is an important trading partner that exports an estimated $104 million worth of goods to Kenya, against Kenya’s exports that topped $157 million in 2018, according to data from Rwanda’s Ministry of Trade.
Although Rwanda shares no common border with Kenya, the shortest route between the two countries is through the Gatuna border post, and Mombasa port serves as a major transit point for Rwanda’s exports, mainly coffee, tea and minerals.
Rwanda also serves as a major transit for Kenyan exports to the Democratic Republic of Congo and Burundi.
Data from the Kenya Ports Authority shows that although Uganda is the largest hinterland market for goods coming through Mombasa, accounting for 81.9 per cent of the traffic or 6.34 million tonnes, South Sudan, the DRC and Burundi also depend on it for their imports and exports.
With no solution in sight, these countries are increasingly looking to Dar es Salaam port as the next best option.
Kenya could lose business—maybe for good—as the John Magufuli administration continues to invest in transport infrastructure, including a standard gauge railway line to Kigali that would be cheaper for traders seeking a sea route.
Egged on by Uganda, Tanzania has been planning to establish a tea auction in Dar, a move that would hit the Mombasa auction hard and further deprive the port of business.
The EastAfrican has learnt that Rwanda’s decision to close the Gatuna border post, ostensibly to allow completion of the one-stop border post and to restrict its citizens from crossing to Uganda, had been well planned. Foreign diplomats in Kigali had been alerted, but the closure caught Uganda flat-footed.
Prior to that, Kigali had been mobilising its private sector to find alternative markets to source commodities previously coming from Uganda.
While no formal communication was made, The EastAfrican learnt that to encourage the Rwandan private sector to comply, several prohibitive import duties were introduced on goods coming in from Uganda though made elsewhere.
For instance, import duty charged on a pair of sandals rose from Rwf280 ($0.3) to Rwf1,500 ($1.7) while shoe importers were asked to pay Rwf2,000 per pair ($2.2), up from Rwf480 ($0.5).
“It became clear that Rwandan traders were importing goods from Uganda that were not made there yet they could easily mobilise themselves and place orders directly from manufacturers in Asia, including China and Malaysia,” a source within the Rwandan government said.
Rwandan traders who used to import individually have now formed associations to import directly from Asia and other markets through Dar es Salaam.
Kigali has established a loan facility—estimated at Rwf1.04 billion ($1 million)—to help traders import directly from China.
The funds will be available to any group comprising 52 people, with individuals contributing Rwf3 million ($3,333) each.
Last week, President Kagame visited Dar es Salaam for bilateral talks with his Tanzanian counterpart in a move that was seen as signalling the impending shift to Dar as the main route for Rwanda’s imports and exports.
President Kagame is also understood to have sought the intervention of President John Magufuli in mediating the dispute. However, President Magufuli is said to prefer non-interference, as he has important joint projects with both Kigali and Kampala.
One of the projects is Uganda’s crude oil pipeline, to run from Hoima to Tanga, and another is the SGR line from Kigali to Isaka on the border with Rwanda, which passes close to Uganda.
Kenyan banks, KCB, Equity, Co-op, I&M and CBA have branches in the region, as do other companies.
It is the threat of the collapse of economic integration and the potential loss of business that appeared to have called President Kenyatta into action.
Government spokesperson Kanze Dena did not respond to questions on the shuttle diplomacy, but sources in Uganda and Rwanda say he returned to Nairobi without any commitment from either leader.
Rwanda’s State Minister for EAC Affairs, Olivier Nduhungirehe, told The EastAfrican that President Kenyatta did not seek a mediation role during his visit.
“President Kenyatta has interest in understanding the situation since we are in the EAC. He also went to Uganda to understand the situation, but it was not on the agenda for him to become a mediator,” Mr Nduhungirehe said.
“He met President Kagame to discuss strengthening bilateral relations, but also took the opportunity to discuss the situation in the region, where there are strained relations between Rwanda and Uganda.”