KENYA – Data collated by the Central Bank of Kenya (CBK) indicate that the value of Kenya’s goods imports from Tanzania plunged 31.12% year-on-year to KES 18.68 billion in the January-June period, a drop from KES 27.12 billion the previous year.
The official data attributes the dip to Tanzania’s imposed new guidelines on trade between the country and its partners in the East African Community bloc in the review period, which largely restricted the importation of maize into Kenya.
According to the report, in a period of renewed trade tiffs, Kenya’s imports from neighboring Tanzania have slumped at the sharpest pace in seven years.
Kenya has been experiencing a steady decline in maize production, from 42 million bags in 2020 to 36 million bags in 2021, due to poor rainfall and the high cost of inputs.
According to the Ministry of Agriculture, the national annual maize requirement is 52 million bags, which includes other uses such as the manufacture of livestock feeds, stock retained as seeds, and the manufacture of other products
Tanzania, on the other side, is a major exporter of maize and rice not only to Kenya but other EAC bloc members such as DR Congo, Burundi, and South Sudan.
Recently, however, Tanzania introduced fresh guidelines on maize imports, which saw more than 200 trucks from Kenya blocked for days at the Namanga and Holili borders.
The new rules required traders to open and register offices in Dar es Salaam for purposes of getting licenses to export maize and other grains as well as tax clearance certificates.
The measures were viewed as contrary to the EAC Common Market Protocol which allows the free movement of goods, services, capital, and labor within the bloc prompting the intervention of President William Ruto.
Tanzania’s Deputy Minister for Investment, Industry, and Trade Exaud Kigahe told Parliament in late June that the measures were helping Tanzania to “fight exploitation that farmers have experienced for years by middlemen and dishonest traders who have been purchasing crops to farmers at low prices.”
The rules, however, prompted Kenyan maize millers to look for other sources of the staple grain, including Zambia.
This comes at a time when the Kenya shilling has lost nearly 20% of its value against regional currencies, weakening its dominant position in the region in a trend that is serving pain to traders importing goods from Uganda and Tanzania.
Additionally, the continued weakening of the Kenyan shilling against the currencies of Uganda, Tanzania, and Rwanda means that Kenyan exports into the region are fetching far much less than before.
But the sharp drop in the value of imports through the Namanga border has seen Tanzania drop from second to fourth-largest source market for Kenya in Africa having been overtaken by Egypt and Uganda.
The CBK data, sourced from the Kenya Revenue Authority, show imports from Egypt increased 5.21 percent to KES 23.75 billion in the review period, while Uganda’s rose 10.57% to KES 18.99 billion.
The review reveals that it was the first time that Kenyan traders spent more on goods from Uganda than Tanzania since the first half of 2019.
However, traders claim that buying from Uganda is disadvantaged since they now spend about KES1.3 million to buy the same quantity of goods that they could get from the landlocked East African country for KES1 million in March 2020.
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