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Economy

Kenya bets on Uhuru, Magufuli ties to boost Tanzania exports

 Dan Kazungu
Kenya’s High Commissioner to Tanzania Dan Kazungu. FILE PHOTO | NMG 

Kenya is betting on the mending of ties between President Uhuru Kenyatta and his Tanzanian counterpart, John Magufuli, to reverse the falling exports to the neighbouring nation.

Kenya’s High Commissioner to Tanzania Dan Kazungu reckons that talks between the two nations and recent visit of President Kenyatta to Tanzania look set to unlock barriers that had hampered trade between the two countries.

Trade relations between the two countries had been souring over the years due to tariff and non-tariff barriers, hurting the flow of goods which dipped to a 10-year low in 2017.

“What we needed was a reset button,” Mr Kazungu told the Business Daily in an interview yesterday. “That button was pressed when President Uhuru visited President Magufuli”.

Mr Kenyatta visited Mr Magufuli in July before embarking on a diplomatic charm offensive in the quest to secure Kenya a seat at the UN Security Council.

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During the visit to President Magufuli’s rural home in Geita, northern Tanzania, Mr Kenyatta was offered the rare gift of two peacocks as a sign of the renewing of ties between the two neighbouring countries, which had been wracked by diplomatic and economic tensions.

Before Mr Kenyatta’s visit, talks between the two countries had led to the elimination of 25 of the 37 tariff barriers by April.

Kenya accounted for 15 of these tariff barriers while Tanzania’s share stood at 22.

Negotiations to resolve the remaining 12 are ongoing although some can only be removed by changes in the law via the Finance Bill, which is under review by lawmakers.

Official data show that Kenya exports to Tanzania dropped to the 10-year low of Sh28.5 billion in 2017, but reversing to Sh29.7 billion last year. Kenya sold good worth Sh42.7 billion to Tanzania in 2014.

Imports from Tanzania to Kenya rose from Sh12.8 billion in 2016 to Sh17.8 billion last year, narrowing the trade gap between the two nations.

This weekend, Tanzania will be hosting the Southern Africa Development Community (SADC) Heads of State summit on Saturday and Sunday, during which President Magufuli is set to take over as chairman of the community for the next one year.

This could boost Kenya’s trade prospects with the SADC bloc, now that relations with Dar-es-Salaam have improved.

Kenya and Tanzania belong to the East Africa common market, which allows for free movement of goods, people, labour, services and capital within six member countries.

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