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East Africa experiences some trade tensions as trade between Tanzania and Kenya dip

Kenya and Tanzania on the map
  • Kenya experiences the fastest decline in imports from Tanzania in seven years, as trade disputes drive Nairobi to seek goods from distant sources. 
  • Tanzania's cereal export restrictions led to a one-third decrease in goods trucked to Kenya over six months, causing a 31.12% drop in imports. 
  • Tanzania's declining imports see it slip from Kenya's second to fourth-largest source market in Africa, overtaken by Egypt and Uganda due to new regulations and disputes.

Kenya's imports from Tanzania have decreased at the fastest rate in seven years, during which time fresh trade disputes caused Nairobi to avoid Dar es Salaam and purchase more goods from as far away as Egypt. In response to limits on cereal exports to Kenya, according to a report by the Tanzanian news outlet The Citizen, expenditure on products trucked from Tanzania in the six months leading up to June fell by approximately a third.

During the review period, Tanzania implemented new limits on grain trade with its neighbors in the East African Community bloc, laws that significantly curtailed the entry of maize into Kenya.

According to information gathered by the Central Bank of Kenya (CBK), the value of Kenya's goods imports from Tanzania fell 31.12% on-year to Sh18.68 billion between January and June. The decrease was the quickest since 2016 from Sh27.12 billion, a record-high for the half-year period, in a comparable period the previous year.

At the height of the disputes between Nairobi and the government of former Tanzanian President John Magufuli (dead), imports for the first half of the year had dropped 36.99 percent to Sh6.06 billion.

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Tanzania overcame South Africa to become the country’s second-largest source market as a result of the warming of trade ties between the two largest economies in the EAC bloc, which consists of seven nations, under the leadership of former Presidents Uhuru Kenyatta and Samia Suluhu.

Tanzania, however, has dropped from being Kenya's second to fourth-largest source market in Africa as a result of the dramatic decline in the value of imports over the Namanga border, having been surpassed by Egypt and Uganda. According to CBK statistics obtained from the Kenya Revenue Authority, Uganda's imports jumped by 10.57% to Sh18.99 billion during the review period while Egypt's imports increased by 5.21% to Sh23.75 billion.

Since the first half of 2019, Kenyan traders have not spent more on items from Tanzania than from Uganda. More than 200 trucks from Kenya were delayed for days at the Namanga and Holili crossings when Tanzania issued new import regulations for maize, leading President William Ruto to step in.

The actions were a part of export limits that Dar es Salaam began imposing last year to maintain food security in a trade bloc that consistently has a maize shortfall, a staple.

For the aim of obtaining permits to export maize and other commodities as well as tax clearance certificates, the new regulations obliged traders to establish and register offices in Dar es Salaam. The EAC Common Market Protocol, which permits the free movement of commodities, services, capital, and labor within the bloc, was seen as being in conflict with the measures.

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“Fight exploitation that farmers have experienced for years by middlemen and dishonest traders who have been purchasing crops to farmers at low prices.” Tanzania’s Deputy Minister for Investment, Industry and Trade Exaud Kigahe, stated.

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