DISPUTE

Kenya and Tanzania border spat to erode free trade gains

Coronavirus war splits Kenya and Tanzania

In Summary
  • Data by the Kenya National Bureau of Statistics shows last year, the value of Kenyan goods exported to Tanzania grew 13 per cent to Sh33.9 billion.
  • Key export to Tanzania includes plastics, iron, and steel, machinery, animal and vegetable fats electrical equipment and vehicles among others.  
Entry point to Kenya at the Namanga border on the Tanzania side. Photo/Joseph Jamenya
Entry point to Kenya at the Namanga border on the Tanzania side. Photo/Joseph Jamenya

The closure of the Kenya-Tanzania border will negatively impact Kenya's export earnings, as the country is among Kenya's top export destinations. 

Kenya National Bureau of Statistics data shows that ast year, Kenyan exports to   Tanzania grew by 13 per cent to Sh33.9 billion.

Exports included plastics, iron, and steel, machinery, animal and vegetable fats electrical equipment, and vehicles among others.  

Kenya imported cereals, wastes of the food industry, paper and paperboard, beverages, spirits and vinegar from Tanzania.

EAC and Regional Development Cabinet Secretary Adan Mohamed said Kenya's exports to its EAC partner states are likely to drop 30 per cent this year as countries introduce strict measures to contain the spread of coronavirus. 

“Trucks that normally take three days to move from Mombasa to Kampala now take eight days. If this continues for up to six months the drastic will affect the demand side as well.” Mohamed said. 

 

On Monday, Tanzania barred Kenyan trucks a day after President Uhuru Kenyatta ordered the closure of the common border - except for cargo vehicles - with its southern neighbour to curb the spread of coronavirus.    

Tanga Provincial administrator ordered security personnel to ensure no Kenyan vehicle enters Tanzania, a move likely to dampen the EAC Common Market Protocol that promotes free movement of goods, labour, services and capital.

Kenya exported goods worth Sh140 billion to its five EAC counterparts, with Uganda taking pole position with imported Kenyan goods worth Sh64 billion.

Long-standing issues between Kenya and Tanzania have always slowed down EAC cross -order trade.

In 2018, Tanzania imposed a 25 per cent import duty on Kenyan confectionery, including juice, ice cream, chocolate, sweets, and chewing gums, claiming Kenya had used zero-rated industrial sugar imports to produce them.

 

Kenya, on the other hand, banned Tanzanian tour vans from accessing the Maasai Mara National Reserve, arguing that the neighbour had banned Kenyan operators from accessing the Serengeti National Park.

This saw Tanzania escalate the trade spat by imposing fresh quality verification standards on Kenyan products.

In April last year, trade officials from the two countries held bilateral meetings in Arusha to try and resolve contentious trade issues, including rules of origin for some products and persistent suspicion over the quality of products traded across the borders.

According to the East African Business Council (EABC), arbitrary trade restrictions deny consumers lower prices, a greater variety of goods, and harm investment inflows, among other negative consequences.

James Kiio, a regional trade expert questions why Kenya and Tanzania are always in contention yet they import the bulk of their goods — not from each other — but from the more developed economies.

‘’Should it be trade imbalance that the neighbours are concerned about, and then they are focusing on the wrong targets. What appears to be happening here is clearly a pure struggle for regional hegemony,’’ Kiio said.

Chief executive officers of National Private Sector Apex Body Associations in the EAC region have asked member states to ensure cargo seamlessly flows without and where a relay system and transshipment of cargo is adopted, the process does not lead to exorbitant costs that could adversely affect transporters and consequently consumer.

They appealed to the National Transport Associations coordinated by the Federation of East African Freight Forwarders Association (FEAFA) to work closely with EABC to ensure the private sector coordinated approach for smooth movement of cargo across the region.