Kenya’s exports to Uganda up for first time in 4 years

Kenya’s exports to Uganda have grown for the first time in four years over the seven months to July amid a political storm over the countries’ bilateral trade.

Data from the Kenya National Bureau of Statistics (KNBS) shows the country sold goods worth Sh36 billion to Uganda in the period to July, up from Sh27.7 billion in a similar period last year.

Exports to Uganda — the largest buyer of Kenyan goods — have been declining since 2011 on what experts attributed to a vibrant manufacturing sector in Kampala and local firms opening shop in the neighbouring country.

The drop defied the creation of the East African Community (EAC) common market in 2010, which was expected to boost commerce among five member states, including Tanzania, Rwanda and Burundi.

Uganda has been Kenya’s top importer since 2007. The UK, which has ruled the exports table for a long time, comes a distant second after Kenya bought goods worth Sh22.1 billion from its former colonial master, up from Sh21.3 billion in the first seven months of last year.

Goods to Tanzania were valued at Sh14.9 billion, down from Sh20.7 billion in the seven months to July 2014. Kenyan sales to Tanzania included medicines, soap, polish, sweets and snacks (sugar confectionery) and construction materials.

Tanzania has previously been accused of putting non-trade barriers on Kenyans including delay of work permits.

Kenyan companies operating in the country have also complained of being treated harshly by unfriendly authorities and slow licensing.

Earlier this year, the two countries were involved in a trade row following a ban on Kenyan tour vans from accessing Tanzanian parks. Kenya reciprocated by barring Dar tour vehicles from Nairobi’s Jomo Kenyatta International Airport.

But Kenya’s trade with Uganda has come under sharp focus following President Uhuru Kenyatta’s signing of a controversial sugar import agreement during his recent visit to Kampala.

The government has defended the deal, saying it needs to balance trade with its neighbours.

READ: Why Uhuru is keen on striking trade deals with Uganda

At Sh36 billion, Kenya’s exports to Uganda are more than double the Sh17.5 billion worth of goods Kenya bought from Uganda the whole of last year.

“I am here with my delegation to see how we can share ideas, opportunities and collaborate in resolving the problems that we face,” President Kenyatta said during his visit.

But the trade deal generated a political storm with the Opposition claiming that Uganda would kill Kenya’s maize and sugar industries via increased exports of cheaper goods.

Goods that Kenya mainly sells to Uganda include cement, iron and steel, polish, medicine and pharmaceuticals, petroleum products, paper and malt beer.

Kenya’s imports from Uganda included unprocessed tobacco (Sh6.1 billion), followed by oil seeds (Sh1.7 billion and tea at Sh735.4 million.

A growing presence of local manufacturers in Uganda has ensured a steady supply of goods that previously had to be imported from across the border.

Kenyan companies have recently set up plants in the neighbouring nation, including edible oil manufacturer Bidco and ARM Cement, manufacturer of Rhino brand.