TANZANIA – Tanzania has reached an agreement to allow sugar imports from Uganda though this would only happen during periods of scarcity, a report from the Joint Permanent Commission meeting held in Kampala reveals.
According to theEastAfrican, the meeting was attended by permanent secretaries from the two East African countries and came after a series of negotiations to allow Ugandan sugar in the country.
One of the issues pointed out at the meeting was sugar manufacturing, where Uganda produces a surplus that averages at about 40,000 tonnes annually.
“The meeting agreed that where there is a deficit, Tanzania should give first preference to source sugar from Uganda. If there is any doubt about the origin, then verification can be conducted,” read the report.
East African trade wars
The meeting followed reports that Tanzania had imposed 25% import duty on some Ugandan goods including sugar, sweets among others.
Tanzania imposed a 25% tax on a consignment of sugar from Kakira Sugar works in Uganda destined for Tanzania, the sugar miller saying it had lost close to US$3 million in the trade row.
According to Mr Jim Mwine Kabeho, the chairman of Uganda Sugar Manufacturers’ Association, reaching the Tanzanian market was difficult due to a total disregard of the East African Community (EAC) agenda which eliminates the import duty on internally manufactured goods.
This is contrary to the East Africa Common Market protocol which dictates zero-rate provisions for such goods.
Earlier this month, Presidents Museveni of Uganda and Magufuli of Tanzania met over the sugar tariffs, pointing out Kenya as the source of the problem.
During the meeting, it emerged that Kenya had last year imported large amounts of sugar because of overwhelming domestic demand and that the product came in at a rate below the East African Community (CET).
The sugar is reported to have somehow found its way into neighbouring countries, leading to prices collapsing.
In May, Tanzania also moved to impose 25% tariffs on Kenyan products including sugar and confectionery with issues relating to certificates of origin.
Tanzania and Uganda revenue bodies have accused Kenyan manufacturers spearheading unfavourable competition by using industrial sugar imported under a 10% duty remission scheme.
A more similar move was taken by Kenya when it imposed non-tariff barriers on Uganda for years between 2011 and 2015 accusing it of importing sugar and then re-bagging.
Uganda had in 2011 sought an exemption from the 100% East African Community CET on sugar but even in 2014, Kenya was blocking Ugandan sugar, saying it had been imported below the EAC CET of 100%.
Following the two president’s meeting, a suggestion was reached to increase the EAC CET on sugar from the current 100% to 150% to stop Kenyan sugar from being dumped in the EAC.
Since all the three EAC members are seeking exemptions from the EAC CET, suggestions have been tabled to remove sugar, rice and cement from the list of sensitive commodities.
These exemptions would then be used as an excuse to introduce non-tariff barriers, affecting the EAC’s integration agenda.
Amb Julius Onen, the Trade Ministry permanent secretary said Uganda would propose a quota system that allows member countries to be first options in the event that there is scarcity within the region.
With the quota system, he said, EAC member states will be given the first shot in case of scarcity.