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Uganda – Kenya trade tension

Ugandan manufacturers to ran to East African Court of Justice over trade restrictions

Kampala, Uganda | JULIUS BUSINGE | Tensions between Ugandan traders and the Kenyan government is likely to get worse a head of the festive season this December, according to executives at the Uganda Manufacturers Association.

The traders and the Kenyan government have been embroiled in a long-running trade conflict for the last two years.

They (Ugandan traders) have now threatened to tussle it out in the East African Court of Justice should the Ugandan government fail to block entry of Kenyan products onto its market before Christmas Day.

The traders have blamed authorities in Nairobi for blocking their products from accessing the Kenyan market on flimsy grounds and in contravention of the East African Common Market commitments that guarantees unfettered free movement of goods and services with the East African Community trading bloc.

“We want to find a diplomatic solution and not a diplomatic row,” Daniel Birungi, the executive director at the Uganda Manufacturers Association told The Independent in an interview on Dece.10. “We are aware that the two governments have been engaging but there seems not to be any movement on these issues.”

Neither the trade minister, Amelia Kyambadde, nor her junior staff, Emmanuel Atwine, the commissioner in charge of external trade could be reached through our repeated telephone calls to respond to this matter.

However, President Yoweri Museveni, has on several occasions said that he does not encourage retaliation. This is contrary to Tanzanian President, John Pombe Magufuli, who on several occasions has retaliated against Kenya’s decisions deemed to affect his citizens.

For instance, in July this year, Tanzanian government banned Kenya Airways and other Kenyan carriers from flying into its territory ostensibly to retaliate against Kenya’s move to remove Tanzania from a list of more than 30 countries allowed to resume international flights into Kenya from August this year.

The ban was only lifted when the Kenyan government included the east African nation on a list of countries whose flights were allowed into its territory.

This development comes at the time Uganda continues to develop capacity to manufacture and process goods that were originally being imported from Kenya, with the help of various favourable policies such as Buy Uganda Build Uganda policy and the Reservations and Preference Schemes under the PPDA Act.

However, the Kenyan government has on many occasions said products from Uganda are counterfeit yet bares Q mark issued by the standard’s body, Uganda National Bureau of Standards, an allegation that Ugandan manufacturers have vehemently denied.

Kenya has, in some instances, instituted permits that water down the very essence of the EAC Common Market through unilateral restrictions against Uganda originating goods.

Furthermore, Kenya has also been accused of institutionalising harassment of its traders dealing in Ugandan  manufactured  products with the view to discourage dealing in Ugandan products especially poultry, milk and sugar.

Birungi said Kenya’s move to block access of Ugandan products on its market started in 2017 when the country managed to report the first ever trade surplus with east Africa’s largest economy.

Even though  there have been efforts at the level of Heads of States to resolve the trade issues between Kenya and Uganda,  there has been minimal success as Kenya has consistently breached on commitments.

The situation, Birungi said, has since reached worrying levels warranting tough measures to address trade issues in the EAC bloc.

“UMA thus demands that Government of Uganda changes tactics to retaliate against partner states that breach the EAC Common Market,” Birungi said.

Meanwhile, the value of Kenya’s exports into Uganda have increased from $1.1bn in 2017 to $1.2bn in the past two years.

 

Exports for Uganda to Kenya since 2017

Total Exports to Kenya in 2017 $159m
Total Exports to Kenya in 2018 $164m
Total Exports to Kenya in 2019 $190m
Total Exports Projected in 2020 $73m

Source: Uganda Export Promotions Board

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