Private sector welcomes Kenya-Uganda trade deal

After six days of joint mission verification of the sugar sub-sector, a decision to allow Uganda’s sugar exports access to the Kenyan market was last Thursday collectively endorsed, bringing to an end about three years of brewing trade hostilities between the two countries.

Private sector players are now hoping that the two governments will quickly implement what they jointly agreed upon in a communique they both endorsed.
When contacted yesterday, Mr Jim Kabeho, the Uganda Sugar Manufacturers Association chairperson, noted that the two government must go beyond words as contained in the joint communique and enforce the agreed position.

“We have been here before and nothing happened thereafter. This is not the first verification mission conducted. About two or so years ago, similar activities were done and here we are again pretty much doing the same thing,” Mr Kabeho said.

“The good news is that the Kenyans have established for themselves that we have surplus sugar as demonstrated by raw cane from Uganda that ends up in their country. They have also noticed that more sugar processors have opened up shop, an indication that we have the capacity to produce surplus sugar. So what is important is to implement the communique and we are ready to fulfil our quota of 90,000 metric tonnes annually as agreed,” he added.

The executive director of the Private Sector Foundation Uganda (PSFU), Mr Gideon Badagawa, described the development contained in the joint communique as a win-win situation for both countries.

“Uganda or Kenya cannot have their cake and it. There must be a compromise where both parties are willing to take away some and give away some,” he said when contacted yesterday.

Mr Badagwa wants to see the same engagement happen with Rwanda and Tanzania. This is because Tanzania’s incessant tariff tinkering also breaches the EAC Common Market commitments while the Rwanda’s border situation has shrunk Uganda’s market share for the EAC.

In the joint communique on improving bilateral trade relations between the two EAC member states, Uganda’s Minister of Trade Amelia Kyambadde and her Kenya’s counterpart, Ms Betty Maina, the Cabinet Secretary of Industrialisation, lifted the ban on Uganda’s sugar export before declaring 90,000 metric tonnes of duty free quota up for grab annually.

Regarding Kenya’s restrictive measures on Uganda’s export of maize, both countries agreed that any further restrictions shouldn’t be imposed arbitrarily as has been the practice by Kenya, but instead it should be done respectfully and formally for ease of compliance.

As pertaining to the Kenya’s continued ban of Uganda’s milk exports, there was a stalemate, pending another verification mission to be undertaken within two months. Meanwhile, feedback regarding Kenya’s ban on Uganda’s poultry products will also be communicated in due course.

However, Kenya’s imposition of 35 per cent excise duty on LPG cylinders manufactured in Uganda was deemed in contravention of the EAC Custom Union Protocol. And in the coming financial year, this will be no more the case, according to joint communique issued last Thursday. 

However, Uganda’s imposition of 13 per cent excise duty on Kenyan manufactured juices, malted beer, and spirits, is in contravention of the EAC custom union protocols. The same applies to the imposition of 20 per cent excise duty on Kenyan furniture.

The good news is that all these itchy issues will be no more by beginning of the next financial year, according to the communique.      

Trade relations
Total trade between Uganda and Kenya has increased from $168 million in 1999 to $1.2 billion as of last year, an increment of 644 per cent, according to the ministry of Trade data. And total trade was recorded at $1.3 billion in the year before Covid-19. In the joint communique last Thursday, Uganda lifted the ban on Uganda’s sugar export before declaring 90,000 metric tonnes of duty free quota up for grab annually.

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