Tanzania’s exports overtake imports from Kenya for the first time in decades

Tanzania’s exports to Kenya exceeded its imports to the partner country of the East African Community (EAC) for the first time in decades, which points to improved trade flows under the government of President Samia Suluhu.

New data from the Central Bank of Kenya (CBK) shows that Kenya’s imports from Tanzania rose by almost three quarters in the six months to June 2021 compared to the previous year – at the same time as trade relations between the two nations were thawing.

The value of the goods Kenya imports from Tanzania – including grain, wood and edible vegetables – peaked at Sh 370 billion during the reporting period, according to data from the Kenya Revenue Authority (KRA) published by the CBK.

The 70.06 percent increase in goods purchased by Tanzania outpaced exports, which grew at a five-year high, resulting in a rare trade deficit of Sh21.02 billion.

The CBK data shows that exports to Tanzania – including pharmaceutical products, plastics, iron and steel – rose 21.39 percent to 340 billion shutters, the highest level since the first half of 2016.

President Uhuru Kenyatta and his Tanzanian counterpart Suluhu promised at the beginning of May that they would end the tense trade relations between the two largest economies in the six-nation EAC bloc, which have been hindering the smooth movement of goods and services for years.

The visit of the Tanzanian President to Nairobi, during which, among other things, an agreement on the construction of a gas pipeline from Dar es Salaam to Mombasa was signed between the two countries, was the prelude to a series of joint trade meetings aimed at removing the obstacles to the flow of goods dismantle.

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

A three-day investment forum for manufacturers from both countries followed in Dar es Salaam on July 7, at which the Kenyan Manufacturers’ Association (KAM) and the Association of Tanzanian Industries decided to jointly promote the authorities to remove crippling non-tariff trade barriers.

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

ALSO READ: Tanzania overtakes Kenya as Uganda’s largest import source in EAC

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

Kenyan manufacturers had protested in recent years against “discriminatory” tariffs and non-tariff barriers such as the double-checking of goods to standards by Tanzania, which had made supplies such as meat, milk and related products to the neighboring country uncompetitive.

READ: Tanzania exports to Uganda up 25 percent

The protectionist fees, argued Kenyan manufacturers, contradict the EAC Common Market Protocol, which obliges member states to open borders in order to facilitate the free movement of goods, labor, services and capital.

Less than two months before Ms. Suluhu’s visit, Kenya had banned corn imports from Tanzania and Uganda, as aflatoxin content was reported to be higher than the required minimum of 10 ppm and protests had been triggered in Dar es Salaam and Kampala.

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