Uma Protests Government’s Inability to Resolve the Unfair Trade Practices by Kenya

by | Nov 30, 2020 | Communication, Policy & Advocacy

At a glance, Uganda’s trade with Kenya is down to a trickle. Uganda has over the years been a supermarket for Kenyan made products, since the colonial days. Kenya has always benefited from both access to cheap Ugandan raw materials and fresh produce for their agro – processing industry and market for finished products.

With time however, Uganda has developed capacity to manufacture and process goods that were originally being imported from Kenya from her own raw materials as well as imported inputs in a bid to survive and promote her sense of National pride and economic independence in line with the NRM Government strategic aspiration of creating a self-sustaining and integrated National Economy. This has been facilitated by progress policies like the Buy Uganda Build Uganda (BUBU) Policy and the Reservations and Preference Schemes under the PPDA Act.

This has seen the established industries grow production efficiencies to be able to produce enough the local and for the export market, thus the justification for the formation of the EAC common market, to which Uganda has been the most committed partner. The EAC Common Market guarantees unfettered free movement of goods and services. However, the Republic of Kenya has completely ignored the EAC Common Market commitments and has wantonly barred Ugandan goods into Kenya, for the following ‘reasons’;

  1. Questioning the Origin of Uganda’s products even those with valid certificates of origin;
  2. Baseless claims that products from Uganda are counterfeit notwithstanding such products bearing Q mark issued by Uganda National Bureau of Standards;
  3. Claims that goods from Uganda are smuggled into Kenya hence evading taxes;
  4. Institution of permits that water down the very essence of the EAC Common Market through unilateral restrictions against Uganda originating goods;
  5. Structured and institutionalized harassment of Kenyan traders and dealers in Ugandan originating goods with the view to discouraging dealing in Uganda originating goods, especially poultry, milk, sugar;
  6. Impromptu stop overs and rampant raids on Ugandan warehouses or warehouses with Ugandan goods;
  7. Issuance of Quotas to Ugandan made Sugar which contradicts the EAC Common Market Protocol and;
  8. Institutionalizing untold uncertainty in business relations defined by unfounded allegations that prompt unending verifications whose findings that always vindicate Uganda never become basis for once and for all resolution of trade challenges. Example, Sugar and Milk impasse reigns despite several verification missions

Despite persistent trade distortions orchestrated against Uganda, Uganda’s exports to Kenya had been increasing exponentially until 2017, when Uganda managed to report for the first ever trade surplus with Kenya. Since then, The Republic of Kenya has intensified Non-Tariff Barriers with fears of possible takeover of the trade balance of power. Such acts contradict the EAC Common Market commitments. Table 1 below illustrates the negative impact Kenyan blockade on Ugandan products since 2017.

Total Exports to Kenya in 2017$159m
Total Exports to Kenya in 2018$164m
Total Exports to Kenya in 2019$190m
Total Exports Projected in 2020$73m
Employment loss in the affected sectorsabove 114,810
Source: Uganda Export Promotion Board

On the other hand, Kenyan exports into Uganda have increased from USD 1.1 Billion in 2017 to USD 1.2 Billion in 2018 and 2019.

The Kenyan market situation is not helped by the not so pleasant United Republic of Tanzania incessant tariff tinkering that also breaches the EAC Common Market commitments. The Rwanda scenario has only effectively shrunk Uganda’s market share for the EAC and one wonders if the EAC still makes any sense when Partner States just continue to mistreat Uganda in every respect.

In January 2020, the Ugandan Government issued a Protest Note that remains un-replied. Prior to that, there has been every effort at the level of Heads of States to resolve the trade issues between Kenya and Uganda, with minimal success since Kenya has consistently breached on commitments while Uganda continues to play second fiddle. The situation has since reached worrying levels warranting tough measures to address trade issues in EAC otherwise Uganda is doomed.

This Press Statement is a culmination from untold frustration by the Government of Uganda in the pursuit for equity from EAC Partner States. Yes, Uganda believes in Regional Integration. However, Uganda must also benefit from the integration process. UMA thus demands that Government of Uganda changes tactics to retaliate against Partner States that breach the EAC Common Market Protocol through blocking Ugandan originating goods into their markets. UMA expects action before Christmas Day.

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