Kenya, Uganda should improve trade relations

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Central Bank of Kenya. FILE PHOTO | NMG

Kenya’s dwindling fortunes in the Ugandan export market is a worrying issue that deserves urgent action.

Official data shows that Kenya’s exports to Uganda have been declining gradually since April in the wake of relentless trade feuds between the two nations.

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 import market in the East African Community (EAC).

This trend should be a major concern because Uganda has traditionally been Kenya’s single largest export market. Some may argue that there is an overall reduced demand for shipments due to tough economic times related to the pandemic.

But even before the economic fallout of Covid-19, the trade relations between the two countries had been fraught with rows that haven’t been resolved to date. The trade in commodities such as milk, sugar, and poultry, and poultry products remains contentious despite numerous pledges by officials from the two countries to end the feuding.

These standoffs are bad for both countries because they compromise the huge investments in the production of goods and services. Ugandan and Kenyan officials should be reminded that a healthy economy is one where both exports and imports are experiencing growth, which should not be compromised by petty fights.

Kenya and Uganda should urgently find a way to restore smooth trade between them. With tough economic times such as this, one is better off nurturing the existing market opportunities than straining to find new ones that may never meet aspirations.

The proximity of these markets is beneficial in many ways because traders are spared high transport and logistics costs. Additionally, Kenya and Uganda are part of the EAC Common Market, which provides for seamless cross-border trade with harmonised tariffs and quality standards.

These benefits are huge and should be protected by smoothing trade between Kenya and Uganda.