Kenya, Tanzania trade surge a lesson for EAC
Thursday January 12 2023
The prospects of regional integration and shared prosperity depend on how well a bloc’s member States collaborate and trade with one another.
In just under two years since President Samia Suluhu came to power, Tanzania’s ties with Kenya thawed, and trade between Nairobi and Dar es Salaam crossed the Sh100 billion mark for the first time.
The two neighbors have also resolved 23 restrictive regulations that had impeded trade between them, which pushed the cumulative non-tariff barriers resolved and eliminated to 256 by the end of last June.
The significant jump in trade should be instructive to policymakers in the East African Community (EAC).
Relations between Kenya and Tanzania had been frosty, especially under Ms Suluhu’s predecessor, the late John Pombe Magufuli.
His protectionist policies led to trade spats that peaked in November 2017 when Dar burnt 6,400 live chicks from Kenya, claiming they had been smuggled into the country.
Later, Kenya banned maize imported from Uganda and Tanzania, arguing that the crop had been infected with cancer-causing aflatoxin.
The reality of unbalanced trade in regional economies is rather short-term benefits. Such trade wars cause a drag on the EAC integration treaties, often signed with much fanfare but little to show after that.
Trade barriers are a form of invisible tax which makes trade cumbersome, inefficient and expensive and denies market access to manufacturers.
To achieve a more integrated regime, the EAC citizens should be able to move, trade and work anywhere within the bloc. Perhaps then we could have a single currency.