Market News

Months of trade wars slash imports from Uganda 34pc

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Industrialisation, Trade and Enterprise Development CS Betty Maina during SMEs Conference. PHOTO | SILA KIPLAGAT | NMG

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Summary

  • The value of imports from Uganda dropped 34 percent in eight months to August as trade wars between the two countries took a toll on the flow of goods.
  • Trade data from Central Bank indicates that the imports from Kenya’s landlocked neighbour dropped from a record high of Sh3.2 billion in February to Sh2.09 billion in the review period, hitting a seven- month low.

The value of imports from Uganda dropped 34 percent in eight months to August as trade wars between the two countries took a toll on the flow of goods.

Trade data from Central Bank indicates that the imports from Kenya’s landlocked neighbour dropped from a record high of Sh3.2 billion in February to Sh2.09 billion in the review period, hitting a seven- month low.

The two countries have had trade disputes now running into the second year after Nairobi banned products like milk and poultry from Uganda.

Kenya’s delegation plans to visit Uganda this month to resolve the impasse on trade issues, according to the Livestock Principal Secretary Harry Kimtai.

“We have been exchanging some correspondence with Uganda and agreed that we shall be going there next month for a fact-finding mission,” said Mr Kimtai later last month.

However, export earnings jumped 32 percent in eight months to August to Sh60.4 billion from Sh45.8 in corresponding period last year.

In March, Kenya banned maize imports from Uganda owing to high levels of aflatoxin, which exceeded the required limit of 10 parts per billion.

In September, Kenya cut sugar imports from Uganda by 79 percent on its scheduled sugar exports to the country, reigniting trade disputes between the two East African Community members.

The Sugar Directorate said traders will only be allowed to import 18,923 tonnes of sugar from Uganda, down from 90,000 tonnes that Kenya had earlier said would be shipped in.

Trade Cabinet Secretary Betty Maina and her Ugandan counterpart had in April agreed that Uganda would export 90,000 tonnes of sugar to Kenya as soon as the verification mission on the country of origin was completed.

The forthcoming trade delegation to Kampala comes at a time when Uganda has been allowed to access the Zambian market, giving them an alternative for their commodity.

The Pearl Dairies, makers of Lato milk, have secured annual supplies of milk to Zambia after the company suffered major losses when Kenya stopped exports of its products in 2019.

The firm is the largest processor of milk in Uganda with a daily capacity of 800,000 litres.