TRANSITION

Kenya's 'hot and cold' trade relations with Tanzania under Magufuli

The two neighbours are also jostling for economic influence in East Africa, as both seek to position their ports as regional transit hubs.

In Summary
  • He will be remembered for reminding Kenya that Tanzania is not its grazing land.
  • While Kenya is accustomed to capitalists ideologies, Tanzania favours socialism
Tanzanian President John Magufuli.
Tanzanian President John Magufuli.
Image: FILE

Kenya's trade relationship with Tanzania has been lukewarm, but since President John Pombe Magufuli took the reigns in 2015 the two neighbours have openly engaged in trade wars.

From  burning chicks imported from Kenya for fear of bird flu to auctioning 1,300 cows belonging to Kenyan herders in 2017, Magufuli did justice to his nickname -Bulldozer, punching Kenya hard at the slightest provocation. 

He will be remembered for reminding Kenya that Tanzania is not its grazing land, vowing to continue confiscating and auctioning livestock that cross the border illegally. 

However, in the same year the two governments reached a deal to lift long-standing trade restrictions that threatened to degenerate into a diplomatic row. 

In 2016, Kenya banned wheat imports from Tanzania, arguing that her southern neighbour should not enjoy reduced tariff if it has enough stocks to export. It also blocked the import of Tanzania's liquefied petroleum gas (LPG)  on safety grounds.

In retaliation, Tanzanian banned imports of Kenyan milk and cigarettes and blocked maize traders from Zambia from transiting its country to Kenya.

Tanzania Food and Drugs Authority’s (TFDA) demanded that Kenyan firms exporting to Tanzania register, re-label and retest goods that have already been certified by authorities such as the Kenya Bureau of Standards and Kenya Plant Health Inspectorate Service.

Despite talks between the two presidents the pact id not last.

Barely a year after the agreement, Kenyan traders started to complain that their goods were still being turned away at the Tanzanian border.

In September 2018, Nairobi was forced to hit back at Dar es Salaam by imposing new tariffs on Tanzania products like flour after the neighbouring country ignored a deal that granted Kenyan-made chocolate, ice cream, biscuits and sweets unrestricted entry into its market.

The two countries failed to resolve the trade war sparked by the use of imported materials in goods made in the countries, setting the stage for a fresh round of the trade war.

Tanzania maintains that it has retained 25 per cent import duty on Kenyan-made confectioneries such as chocolate, ice cream, biscuits and sweets, citing the use of imported industrial sugar.

It also continued to levy a 25 per cent duty on Kenya’s edible oils. Both countries ignored the EAC common market Protocol that allows for free movement of locally manufactured goods. 

In the latest trade spat, the late Magufuli's administration blocked Kenya's national airline from entering the country after the former decided against including Tanzania in a list of countries whose passengers would be permitted to enter Kenya when commercial flights resumed on August 1, 2020.

The hardline stand was softened by a phone between Uhuru and Magufuli. 

Although the two were colonised by the British colonial rule in the early 1960s, Tanzania and Kenya adopted quite different development models immediately after independence.

While Kenya is accustomed to capitalists ideologies, Tanzania favours socialism. The two often clash on the idea of free trade with Tanzania being protective of its farmers and manufacturesr.

The two neighbours are also jostling for economic influence in East Africa, as both seek to position their ports as regional transit hubs.

Access to the ocean gives Kenya and Tanzania a big trade advantage over their neighbours Uganda, Rwanda, Burundi, Zambia, and the eastern Democratic Republic of Congo (DRC), which all have to transit goods through the Indian Ocean ports of Mombasa, Kenya and Dar es Salaam.

Kenya and Tanzania are also building modern rail and petroleum networks, with each seeking to entice landlocked neighbours especially Uganda.