Tanzania Dominates Trade In The East African Community Region

Uganda and Kenya have lost their balance of trade surpluses to Tanzania over the last one year, as the country opens up to regional integration.

This comes as the East African Community (EAC) is planning to roll out the 24-hour operating system across all the borders of the region to improve trade, according to the Secretary General Peter Mathuki.

The growth of Tanzania’s trade with other states is largely attributed to the removal of the non-trade barriers that had characterized cross-border operations, for some time, especially regarding trade with Kenya.

On the other hand, Tanzania’s huge export volumes to Uganda are being boosted by the growing amount of gold shipped into Uganda, while Uganda’s exports to Tanzania are yet to grow significantly since the ban on grain and sugar more than two years back.

On the onset of the COVID-19 in the region early 2020, travel was disrupted but the leaders tried to ensure that the containment measures do not affects some sectors including agriculture and cargo movement. However, other factors like screening of drivers at border points and restrictions on human movements within the countries, ensured that regional trade was affected, though not uniformly.

Fresh or perishable agricultural products were the most affected because of border delays and difficulties in labour movement.

In the calendar year 2020, Uganda’s exports to trade amounted to 95.13 million dollars, according to data supplied by the UN trade commercial and trade databank, COMTRADE, while between July 2020 and June 2021, they had dropped to about 90 Million.

On the other hand, Uganda imported from Tanzania goods worth 743.68 Million dollars in 2020, and this figure grew to more than 1.2 billion dollars between July 2020 and June 2021. Traditionally, Uganda’s exports to Tanzania have been iron and steel; grains, sugar and sugar products; body products, vegetable and animal oils; and beverages, among others, and recently, cargo trailers. So, a ban on sugar from Uganda would be a big dent on its earnings from commodity exports to Tanzania.

Uganda’s imports from Tanzania have evolved more, especially with the growing demand of gold in Uganda in recent years. Currently, Uganda has at least four refining companies, including Ilota Mining Group, Carvataro refinery ltd, African Gold Refinery (AGR) and Simba Gold Refinery Ltd.

At the same time, Uganda’s mining capacity is far below the capacity required to feed the refineries and this means, most of the gold is imported, mainly from Democratic Republic of Congo, Rwanda and Tanzania.

In the year 2020, Uganda imported gold from Tanzania worth 591 million dollars, which is more than half of all imports from the country and five times more than all that Uganda exports there.

“Regular consultations and dialogues within the national private sector bodies, is critical in building consensus within a Partner State. Divergent positions within a country will only delay in concluding trade deliberations at the regional level, further delaying implementation of regional trade policies,” said Dr. Mathuki.

Tanzania’s exports to Kenya had been dented by the different political approaches by the leaders on the two countries, Uhuru Kenyatta and the Late John Pombe Magufuli, to trade issues. Tanzania banned several agricultural products from Kenya over that period claiming poor standards and adequate output at home, while confectioneries and related products were banned over issues of origin of raw materials.

In 2018, Kenya banned importation of rice from Tanzania, just after stopping wheat and energy drinks, among others. However, this trend has since changed following an agreement between the two leaders to open up trade with each other, earlier this year.

Figures at the Kenya Revenue Authority show that Kenya’s imports from Tanzania grew by 70% from January 2021 to 167 million dollars to June 2021.On the other hand, Kenya exported goods to Tanzania valued at 158 million dollars, which was a drop in value by 21.4 percent, and a resulting in a deficit of 9.3 million dollars.

At Namanga border post itself, trade volume between the two countries increased six times.This has been attributed to the bilateral agreements signed in May 2021 between Kenyatta and Tanzania’s current president Samia Suluhu Hassan.

According to the data, the main imports from Tanzania by Kenya wood and wood products, like charcoal; cereals, and edible vegetables. Cargo traffic to the opposite direction included pharmaceutical products, plastics, iron, and steel products.

The Kenya Association of Manufacturers, Mocai Kunyiha told the EABC CEO’s meeting on Wednesday, of the need for countries in the region to abolish non-tariff barriers.

“We have the capability and capacity to add value to the wide array of resources that both countries have for export markets. However, achieving this is hindered every time the business community encounters impediments to trade, consequently impacting the benefits of trade to the entire region,” he said

The EAC Secretary General, Peter Mathuki on his part says urges the business community to push for public-private partnerships, saying that this is what has boosted trade between Kenya and Tanzania.

“Private sector needs to move beyond advocacy and liaise with the Government in providing solutions to some of the trade issues being faced across EAC Partner States,” he said.

-URN