Trade between Uganda and Tanzania hasn’t been flowing smoothly despite several engagements between the two neighbouring countries. In fact, trade balance between the two East African member states as of last year was is in negatives, precisely -$163 million.
Despite being members of East African Community (EAC), Uganda’s importers and exporters, have encountered restrictions while accessing Tanzania’s market.
According to the trade ministry statistics, whereas Uganda’s trade with Kenya and other EAC member states is steadily growing, that is not the case with Tanzania.
The Ministry of trade’s annual sector performance report, commissioned in October 2018 indicated that Uganda for the first time in decades, registered a favourable balance of trade with Kenya in the financial year 2017/18 of $122.78 million (about Shs450 trillion) of which exports amounted to $628.47 million against imports of $505.7 million.
In the same period, the report disclosed that Uganda registered a record trade balance in the East African region of $413.86 million (exports of $1,220.63 million against imports of $806.77 million). But there was a conspicuous deficit with Tanzania.
Speaking during the first Uganda-Tanzania Business Forum held in Tanzania early this month, Tanzania’s President John Pombe Magufuli, wondered why trade between the two countries is disturbingly regressing irrespective of what he describes as the “common bond” and history of the two countries.
“But how come we have more than 500 companies from Kenya that are operating here and only about 22 companies are from Uganda?” President Maagufuli questioned.
The chairperson of the National Logistic Platform (NLP) and the Private Sector Foundation Uganda (PSFU) board member, Ms Merian Sebunya, told President Magufuli and President Yoweri Museveni that it hasn’t been a smooth ride.
She said: “When we pronounced ourselves to the EAC common market, we undertook to remove all non-tariff barriers and resolved not to introduce any new ones. The intention was to help all of us deliver an East Africa that is fully people-centred and driven by private sector.”
She continued: “To date, businesses across the region and in particular Uganda and Tanzania are still challenged with Non-Tariff Barriers, most of which were introduced after the Common market protocol.”
According to Ms Sebunya, Non-Tariff Barriers (NTBs) have derailed EAC intra-regional trade which currently stands at 15 per cent.
Challenges such as denying preferential market access for Ugandan sugar exports to Tanzania, restriction on exports of utility treated poles from Uganda to Kagera region in Tanzania and imposition of road user fees of about $500 (Shs1.8m) against Ugandan trucks are some of the disturbing issues.
These are in addition to charges of $100 (Shs366,000) on a business visa for every business person that enters Tanzania.
Barring Uganda Customs agents from registering and working at the Dar port, charges on exports of dairy products which attracts four types of taxes and the small matter of one Network Area, resulting into serious communication challenges remain serious threats to efficient trade.
New ‘talking shops’
Ms Sebunya noted that such meetings risk becoming ‘talking shops’ if challenges are not addressed by government.
“We attend meetings, agree on what must be done and keep coming back to raise and promise to address the same issues over and over again,” she said amidst applause, before adding, “We want to see implementation of the things that have been agreed upon.”
President Magufuli concurred with Ms Sebunya, saying it makes no sense to keep talking and meeting over matters whose solution is known.
Mr Moses Ogwal, the director, Private Sector Foundation, said the tone of the two principles — President Magufuli and President Museveni struck a chord with the private sector who are looking for a solution to end NTBs.