Kenya has lost footing in its main export market in Uganda, losing out to Tanzania in the wake of long-drawn trade feuds between Nairobi and Kampala.
The value of Tanzania’s exports to Uganda has surpassed Kenya’s since April, a possible reflection of the negative impact of the trade fights.
The Bank of Uganda data shows that in the three months to June, the value of Kenya’s exports to Uganda totalled Sh24.04 billion($221 million) — almost half the Sh43.5 billion ($400 million) shipments Tanzania made to the landlocked country.
Kenya’s exports to Uganda have been declining gradually since April in the wake of trade rows. The value of Kenya’s exports to Uganda stood at Sh9.05 billion ($83.25 million) in April before sliding to Sh7.8 billion ($71.78 million) and Sh7.2 billion ($66.85 million) in May and June respectively — a streak that saw Kenya toppled by Tanzania as Uganda’s main export market in the East African Community (EAC).
High taxes
Kenya has in the last year had trade-related tensions with its landlocked neighbour, especially on milk products, which saw Nairobi confiscate hundreds of tonnes of Lato milk from Uganda in 2020.
Uganda maintains that if there are issues that need to be addressed, they can be handled through bilateral arrangements or the regional trade agreements in the EAC instead of using arbitrary means such as high taxes.
Last week, Uganda protested Kenya’s delay in abolishing the seven percent levy on milk imports following recent bilateral talks to resolve the stalemate.
In a letter dated July 19, Ugandan Agriculture minister Frank Tumwebaze asked Kenya and Tanzania to allow Ugandan milk into their markets, after a flawed soft diplomacy strategy.
Major imports from Tanzania include gold, rice, trailers, and semi-trailers, rolled iron and non-alloy steel, and dried and salted fish as well as rice and wheat.
Uganda has of late started embracing the use of the central corridor on its imports from overseas as it bypasses the Mombasa port.
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