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Economy

Trade dispute with Uganda, Dar casts shadow on summit

Oil tankers and traders
Oil tankers and traders at the Kenya-Uganda border in Busia. EAC states aim to address standards and custom issues to allow free flow of goods made in partner countries. FILE PHOTO | NMG 

Kenyan traders have declared a market access dispute with Tanzania and Uganda, upping stakes for the East African presidents who are set to hold their annual housekeeping meeting later this month.

The traders want Tanzania and Uganda compelled to scrap “punitive taxes that make Kenya-made products unwelcome within their borders.”

In a petition handed over to the newly appointed East Africa Co-operation Principal Secretary Kevit Desai, the Kenya Association of Manufacturers (KAM) has accused Uganda and Tanzania of locking out their goods by discriminative taxes

“While KAM appreciates any initiative that increases production and consumption of local products in EAC region, we do not agree with other Partner States that have developed discriminative policies contrary to the Protocol on the Establishment of the EAC Customs Union,” states the petition signed by KAM chief executive Phyllis Wakiaga. Ms Wakiaga, who was accompanied by KAM board chairman Sachen Gudka and other members said Kenya-made cigarettes entering Tanzania were being subjected to 80 percent higher tax despite an agreement that such taxes do not apply on products made from raw materials sourced locally.

The industrialists have a similar dispute with Uganda. “In 2017, Uganda illegally introduced a 12 percent inspection fee for Kenya’s pharmaceutical exports while it zero rated Uganda- made drugs. Uganda should accord equal treatment to products from Kenya and other partner states,” it said.

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The disputes are expected to creep into the agenda of the EAC heads of State Summit tentatively scheduled for February 29.

According to Kenya National Bureau of Statistics, Kenyan traders earned Sh102.69 billion in the first nine months of 2019, being a Sh5.60 billion growth or 5.77 percent compared to the same period in 2018.

Exports to Rwanda surged Sh3.38 billion, or 25.06 percent to nearly Sh16.89 billion while orders from Tanzania climbed Sh2.25 billion, or 10.12 percent to stand at Sh24.43 billion.

On Thursday, KAM said the gains made could be further enhanced if heads of EAC states swiftly addressed standards and custom issues to allow free flow of goods made in partner states.

KAM said Uganda stamped a 13 percent excise duty on Kenya-made juices while excluding Uganda-made juices. This has made Kenya-made juices uncompetitive in the Uganda market. Tanzania has imposed new levies on Kenya-processed beef and dairy products adversely hurting te Kenya products market share in Tanzania.

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