Kenya blames ‘rogue traders’ for EAC trade rows

Kenya has blamed persistent trade disputes among member states of the East African Community (EAC) on incidents of dishonest traders breaking the rules of cross-border commerce.

Adan Mohamed, the Cabinet Secretary for East African Community and Regional Development, said disputes in recent months between Kenya and its neighbours have largely been a result of non-conformity with controls and standards governing trade.

“Whilst the rules are very clear, there are some private business entities that abuse those rules. And the abuse of those rules is what normally leads to some of these disputes,” he told the Business Daily in an interview.

Kenya has over the years been involved in intermittent trade spats largely with Tanzania and Uganda over tariff and non-tariff rules, prompting intervention by respective ministers and sometimes heads of state.

The EAC Common Market Protocol, which came into force in July 2010, requires member states to open up their borders to facilitate free movement of goods, labour, services as well as capital.

Kenya early March banned maize imports from Tanzania and Uganda after the Kenya Bureau of Standards (Kebs) and the Agriculture and Food Authority (AFA) raised concerns that some of the consignments had surpassed the maximum aflatoxin levels of 10 parts per billion.

That row — together with other unresolved ones involving animal and animal products, confectionery and juices as well as cement — prompted Tanzania’s President Samia Suluhu to make the first official state visit to Nairobi to try to repair strained trade relations between the two countries.

Earlier in April Kenya had sent a high-powered delegation to Kampala, led by Trade Cabinet Secretary Betty Maina, to flatten trade barriers hindering the smooth flow of goods such as sugar and farm produce.

However, Uganda’s Agriculture minister Frank Tumwebaze in a Twitter post last week to his Kenya’s counterpart Peter Munya protested Nairobi’s decision to limit sugar imports to 18,923 tonnes as opposed to 90,000 tonnes agreed in the April deal.

Mr Mohamed, without making direct reference to Uganda, said there have been cases where sugar imported elsewhere has been repackaged and rebranded to look as if they were manufactured in the EAC market.

Past reports have singled out Ugandan traders as notorious for importing sugar from Brazil and reselling them to Kenya as Ugandan products.

“Countries want to make sure that you demonstrate that this is a product from East Africa and not a product from other places that are being paraded and packaged as an EAC product,” Mr Mohamed said.

“The principle behind having a customs union is that no business is being disadvantaged. You don’t give other people unfair advantage to actually come to get access into EAC without enjoying the same benefits.”

Trade disputes

The unending trade tiffs among EAC member states have slowed growth in intra-regional trade, currently estimated at about 15 percent of total volumes, despite the bloc being the most integrated in Africa.

EAC secretary-general Peter Mathuki in May blamed the unending trade disputes within the bloc on failure to enforce the EAC Elimination of Non-Tariff Barriers (NTBs) Act, 2017, and establish the EAC Committee on Trade Remedies to amicably resolve persistent rows.

“The EAC Elimination of NTBs Act 2017, shall facilitate the resolution of persistent NTB and force partner States to refrain from imposing new ones,” Dr Mathuki told the Business Daily in May.

“The mechanisms to report and resolve NTBs, as stipulated in the NTBs Act 2017, include compensation where the Council [of Ministers] finds that the imposing partner State caused unnecessary trade loss to the affected Partner States as shall be determined by the Committee on Trade Remedies.”

Removal of non-tariff trade barriers alone, the Arusha-based EAC secretariat estimated earlier in the year, will double intra-regional trade to 30 percent, rising to 50 percent in coming years.