KENYA – Officials from the Ugandan Ministry of Trade and the Kenya High Commission in Uganda will make a joint verification visit to Malaba border post in the coming week as they try to defuse an escalating dispute over sugar exports.
The visit follows a crisis meeting held on November 13 between the two parties.
Through their umbrella organisation, the Uganda Sugar Manufacturers Association (USMA), sugar millers announced that they had given up on efforts to access the Kenyan market, citing anti-free trade practices by the Kenya Sugar Board (KSB), the Kenya Police and the Kenya Revenue Authority.
Speaking in Kampala on November 18, USMA chairman Jim Kabeho accused the three agencies of blocking Ugandan sugar from reaching the Kenyan market.
“We are stopping all sugar exports to Kenya until the two governments resolve the issue of continued blockage of our export consignments to Kenya. Kenyan products, including sugar, enter the Ugandan market without hindrance. However, despite assurances to the contrary, our efforts to export sugar to Kenya continue to encounter numerous obstacles,” Mr Kabeho said.
According to USMA, the Kenya Sugar Board subjects Ugandan sugar to import permits, a requirement that is defunct under the EAC Common Market Protocol.
Securing the permits is a protracted and expensive process; licensees are required to pay Ksh100,000 ($1,162) for each consignment, but even that is no guarantee that the sugar will get through.
“After KSB issues the permits, the consignments are either blocked by KRA, which disputes the valuation used on the invoices, or the police, who impound the trucks saying Ugandan sugar is not allowed into Kenya,” said Mr Kabeho.
This leads to additional costs in the form of demurrage charges for the additional time the trucks are held at the border.
James Onen, Permanent Secretary at the Ministry of Trade, said efforts are underway to resolve the impasse.
“Kenya allows the imports, but the challenge is the non-tariff barriers that delay the consignments at the border. Last week, we met the Kenyan High Commissioner to Uganda who had the full mandate of his government to handle the issue and we agreed to send a joint team to the border next week to ascertain what really happens on the ground,” Mr Onen said.
However, the manufacturers are not placing much faith in the latest initiative, saying that Kenyan delegations have always promised to act on the complaints but nothing changes.
The latest meeting on the issue was held in Kampala on July 21 between the Uganda Revenue Authority, KRA, KSB, Rwanda Revenue Authority, USMA and the respective ministries of trade.
USMA presented three issues — the lengthy clearance and authorisation Ugandan sugar exports are subjected to by KSB, the lack of progress towards resolving the issue despite several meetings, and Rwanda’s sugar imports, which are far above the annual deficit for that country.
As KSB outlined the procedures for importing sugar into Kenya, it acknowledged that quota restrictions were not applicable to sugar originating from the EAC.