Kenya’s exports to Tanzania in the 10 months to October have plunged to a 10-year low amid unresolved trade spats between Nairobi and Dar es Salaam, hurting local manufacturers and traders.

Exports to Tanzania in the period to October stood at Ksh23.38 billion ($227 million), down from Ksh28.86 billion ($280.2 million) in the same period a year earlier — reflecting a 18.9 per cent drop.

This is the lowest exports since 2007 and suggests that trade between Kenya and Tanzania has not been lifted by the 2010 formation the East African Community (EAC), which was expected to boost commerce between the six-member countries.

Trade tensions

Simmering trade tensions and suspicions between the two countries over tariff and non-tariff barriers has hurt business between the countries over the years, further thinning sales by Kenyan firms already hit by growth of Tanzania’s manufacturing sector.

The coming into force of the EAC Common Market Protocol on July 1, 2010 saw export volumes to Tanzania rise to a record Ksh38.23 billion ($371.2 million) in the 10-month review period in 2012.

The pact allows for free movement of goods, people, labour, services and capital from each of the six partner states, South Sudan being the latest member.

Tanzania is, however, the only EAC member affiliated to the Southern African Development Community, meaning the country could also be looking south for supplies at preferential terms.

Trade disputes

A number of trade disputes last year, however, saw exports value sink to levels before the EAC trade deal was ratified.

The two countries bitterly squabbled over the 75 per cent tax charge on cigarettes from Kenya and Nairobi’s temporary ban on importation of liquefied petroleum gas through the Namanga border, disputes which were resolved through a temporary truce.

In November, however, the tiff between the two reached near boiling point when Tanzanian authorities auctioned 1,300 heads of cattle after Kenyan herders crossed the border, and burnt 6,400 day-old chicks.

Foreign Affairs secretary Amina Mohamed officially protested, but a long lasting deal is yet to be reached.

The Kenya Association of Manufacturers blamed the Tanzania Food and Drugs Authority’s for the woes Kenyan firms face at Namanga border.

source: The East African

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