Time to take bold decisions

Uganda Energy Minister Ruth Nankabirwa waves the flag when the first oil shipment destined for her country docked at the port of Mombasa on July 3, 2024. Photo | KEVIN ODIT | NMG

What you need to know:

The issue: Trade

Our view: While Uganda has been Kenya’s largest trade partner, the partnership seems to be clogged by several issues including the non-tariff barriers that have caused the blocking of eggs, maize, and milk from Uganda and now a punitive bond fee. Isn’t it time for Uganda to take bold steps and engage the officials for a lasting solution? The negotiating team should exhaust the issues and have them sorted once and for all.

The first oil shipment destined for Uganda docked at the port of Mombasa on Wednesday, marking an end of Kenyan oil market companies’ fuel transit monopoly on Uganda’s fuel.

The shipment was received with excitement as Ugandans saw a new dawn in the fuel supply security, stability and lower prices at the pump. Fuel prices in Uganda have been rising in the last year to about shs5,450 from sh5100 for petrol in the last 12 months. The same percentage increase has been registered for diesel and kerosene.

However, in March last year, President Yoweri Museveni opened what many Ugandans were not aware of; that fuel in Uganda was very expensive compared to other countries because there were middle men in Kenya who were making money off Ugandans. He mentioned that even the government of Kenya had, without informing us, started importing fuel from the Middle East under what was termed as the government-to-government arrangement, leaving us taking the beating with prices at the whims of middlemen in Kenya.

When the negotiations were going on to have UNOC be the sole importer of fuel, all Ugandans wanted was an assurance on the prices. Will the prices fall? The minister of energy Ruth Nankabirwa could not commit last week as he received the first consignment of fuel. But what is more puzzling is the fact that Kenya has thrown a fresh hurdle on Uganda’s direct fuel import scheme, doubling the bond fee for imported consignments destined for Kampala to over sh145b from about sh60b, sending the officials, including minister Nankabirwa back into negotiations.

Ugandans would wonder what negotiations entailed if they could not discuss and conclude on an issue like this before the first consignment arrived. The officials say the increase in the bond fee will affect the final prices. While Uganda has been Kenya’s largest trade partner, the partnership seems to be clogged by several issues including the non-tariff barriers that have caused the blocking of eggs, maize, and milk from Uganda and now a punitive bond fee. Isn’t it time for Uganda to take bold steps and engage the officials for a lasting solution? The negotiating team should exhaust the issues and have them sorted once and for all.

If the alternative is to go southwards for the Central corridor trade route of use of Tanga Port for all the imports into landlocked Uganda, the decision should be fast enough not to hurt the traders in both countries. Calls for respect of the East African Community trade protocols have not yielded much. The traders and consumers in Uganda or any country in the region want to have a smooth flow of goods and services across the region.​

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