Tanzania is turning the tables on Kenya as exports soar to $ 396 million in the nine months

BY CONSTANT NDUNDA

Kenya’s imports from Tanzania exceeded exports by nearly a third in nine months through September 2021, new official statistics show, suggesting the thawing of trade ties following regime change in Dar es Salaam.

Nairobi posted a goods trade deficit of $ 80.16 million, or 29.97 percent, with Dar es Salaam – the first during the reporting period according to publicly available data – after traders doubled orders from its southern neighbor.

Imports from Tanzania rose from $ 347.6 million a year ago to $ 396 million in January-September 2021, according to preliminary data from the Kenya National Bureau of Statistics (KNBS).

Kenyan traders and factories mainly source grain, wood, edible vegetables, animal feed, paper and cardboard from Tanzania.

The 101.76 percent increase in the value of goods purchased from Tanzania dwarfed exports growth of 34.81 percent to $ 267.47 million, leading to the rare deficit in goods trade during this period.

Kenya’s exports to its partner in the East African Community include pharmaceuticals, plastics, iron and steel.

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“There are many positive vibes within the EAC that are evolving and we want to build on that to bring back the previous EAC. For example, relations between Kenya and Tanzania are much better, ”Adan Mohamed, cabinet secretary for EAC affairs, told our sister magazine Business Daily in September.

“Ultimately, we as a government are trying to ensure that the environment is suitable for the private sector to do business.”

Samia’s first top

The surge in trade flows between the two countries came on the basis of a commitment between President Uhuru Kenyatta and his counterpart Samia Suluhu in early May to end the ongoing trade disputes between the EAC’s two largest economies.

President Samia made Nairobi her first stop to strengthen trade ties with EAC partners.

During her visit, she made it clear that her priority was to end the unresolved tense trade relations between the countries that had been hindering the smooth movement of goods and services for years.

The KNBS data show that the gap between imports and exports has widened in favor of Tanzania since the beginning of the year. The deficit in goods trade was $ 10.86 million in the first quarter, $ 16.12 million in the second, and nearly $ 53.17 million (July-September).

According to preliminary data, Tanzania is the only country in the six-nation trading bloc EAC that achieved a surplus against Kenya in the reporting period.

Kenya had a trade surplus of $ 313.73 million and $ 145.57 million with Uganda and Rwanda, respectively.

Unresolved disputes

A continued growing trade deficit will mean that Nairobi will export jobs to Dar es Salaam.

The meeting in Nairobi marked the beginning of a series of joint trade meetings with the aim of removing obstacles to the flow of goods.

Trade Minister Betty Maina and her Tanzanian counterpart Prof. Kitila Mkumbo led delegations to a four-day meeting in Arusha – the seat of the EAC Secretariat – weeks after the two presidents met in Nairobi to deal with unresolved trade disputes.

This was followed on July 7 by a three-day investment forum for manufacturers from both countries in Dar es Salaam, at which the Kenyan Manufacturers Association and the Association of Tanzanian Industries decided to jointly promote the abolition of crippling non-tariff trade barriers to the authorities.

“Kenya and Tanzania have the ability and capacity to add value to the wide range of resources that both countries have for export markets,” KAM Chairman Mucai Kunyiha told the forum.

“However, this is hampered every time the business world encounters barriers to trade, which consequently affects the benefits of trade for the whole [EAC] Region.”

In recent years, Kenyan manufacturers had protested against “discriminatory” tariffs and non-tariff trade barriers such as the double standard inspection by Dar es Salaam, which had made supplies such as meat, milk and their products to Tanzania uncompetitive.

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