Kenya imposes new tariffs on Tanzanian flour as trade war escalates

KENYA – Kenya has announced 25% import duty on Tanzania’s products like flour, saying it is produced from imported wheat which contravenes the East African Community (EAC) rules and regulations on such products, reports Business Daily.

The two countries have had a long-time battle regarding some products such as sugar, flours and cement products, blaming each other for taking advantage of the unrestricted access of goods in EAC.

Tanzania was the first to impose 25% duty on Kenyan-made confectioneries such as chocolate, ice cream, biscuits and sweets, citing use of imported industrial sugar.

The trade war increased when Uganda joined Tanzania to reject certificates of origin issued by the Kenya Revenue Authority (KRA).

The revenue authorities of Tanzania and Uganda have accused Kenyan manufacturers of competing unfairly by using imported industrial sugar under a 10% duty remission scheme.

Such a certificate which shows where a good has originated, allows free movement of locally manufactured goods within the bloc comprising of Tanzania, Kenya, Uganda, Rwanda and Burundi.

The fresh trade war comes after the two countries announced an end to all trade disputes barely a month ago.

This has called for intervention from the EAC who send a team to audit Kenyan firms and came up with a report which said: “Products manufactured using industrial sugar, when transferred to the EAC qualify for preferential tariff treatment provided they meet the criteria set under the EAC rules of origin 2015, and any other conditions set under the regional customs law.”

Blame game

Standard media reported that the trade spat between Kenya and Tanzania cost Kenyan firms US$74.35 million in exports.

In 2016, Kenya exported goods worth US$345.31 million to her neighbour while it imported US$127.01 million worth of products.

Tanzania had blocked unprocessed foods, milk products and cigarettes from Kenya and introduced a fee for business visas even for a one-day visit.

Tanzania claimed the Kenya National Bureau of Statistics (KNBS) conducts double checks on products approved by the Tanzania Bureau of Standards and Tanzania Food and Drugs Authority, something that was discriminatory.

Kenya, on the other hand, accuses Tanzania of subjecting its goods to the highest number of non-tariff barriers in the region.

Kenya also says its exports to Tanzania are subjected to verification three times — at the manufacturer’s premises and at the border which consumes time and is costly.

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