Business Daily (Nairobi)
Allan Odhiambo
28 January 2008
Kenya and Tanzania appeared headed for a new round of a trade war over the latter's decision three years ago to leave the Common Market for Eastern and Southern Africa (Comesa).
Kenya's Ministry of Trade officials accused Tanzania of rocking the Common Market for Eastern and Southern Africa (Comesa) boat despite being a major beneficiary of its programmes.
"There is evidence that Tanzania remains one of the beneficiaries of the common market," Mr David Nalo, Kenya's Trade permanent secretary, said in a statement.
East African Community member states stood to gain more under the Comesa umbrella, he said, and urged Tanzania to reconsider its decision to leave the 21-member trade bloc.
"It has become clear that larger markets offer better opportunities for growth and development in terms of investments, export market and industrial development," Mr Nalo said.
"Fortunately, the Comesa market of which four East African countries except Tanzania are members, provide a much larger market," he said.
The statement came as the EAC member states prepared for a two-day meeting to review the interim trade agreement it signed with Europe in November last year to beat the World Trade Organisation's December 31 deadline for the EU to comply with global trade requirements barring preferential treatment to partners. The meeting is scheduled for Arusha next week.
Tanzanian High Commission in Nairobi did not reply to our requests for a response. Mr Nalo said Tanzania was a major beneficiary of Comesa programmes and should help expand its ties with the EAC.
Statistics show that between 2000 and 2006, Tanzania's overall exports to Comesa increased to $198.24 million from $72.93 million - nearly three times, while its imports nearly doubled from $133.83 to $239.4 million during the same period.
This compared unfavourably with its exports to the EAC that stood at $121.60 million in 2006, having risen from $49.25 million in 2000.
Besides, Mr Nalo said the business community in Tanzania continued to benefit from various Comesa programmes such as the "Yellow Card Scheme" that enables vehicles on transit within the regional bloc to do so without raising a third party motor vehicle insurance.
Insurance companies operating in Comesa member states are allowed to sell the yellow card and generate income. Official statistics showed that in 2004, Tanzania-based insurance companies generated $131,800 from the sale of 173,600 such premiums - three years after the country left Comesa.
Kenya further claimed that Tanzania was a beneficiary of Comesa's Re-Insurance Company (ZEP-Re) and Comesa Re-Insurance pool where it has a $1.4 million shareholding through the National Insurance Corporation (NIC) and the Peoples' Insurance Company of Zanzibar.
The schemes help companies to re-insure their projects. Tanzania is also linked to another Comesa initiative, the Africa Trade Insurance Agency (ATIA) that insures companies investing in or are engaged in export and import trade with countries that are perceived to be of high political risk. Through ATIA Tanzania won a soft loan worth $30 million.
Mr Nalo also revealed that 16 Tanzanian firms had received a $48 million credit from the Eastern and Southern Africa Trade and Development Bank (PTA Bank) and another $34.5 million in trade in finance credit to 10 firms.
Analysts said the remarks could renew a long-standing spat between Tanzania and other EAC member states over its relations with other trading blocs such as Comesa.
Commercial relations among the members of Africa's various trading blocs is already the subject of intense debate on the continent and has been listed among the subjects of discussion during this week's African Union (AU) summit in Addis Ababa.
Two weeks ago, Comesa's top organ raised the over the independent trade deal that the EAC signed with the EU last year saying it posed a threat to the future of Comesa's efforts to move towards a Customs Union (CU).
Mr Nalo however said that the Comesa Summit had adopted a common external tariff with a four tariff band similar to that of EAC leaving no room for conflict.
"The CET is to come to force in 2008 and when it is realised the EAC CET will no longer be unique," he said.
Be the first to Write a Comment!
Copyright © 2008 Business Daily. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections — or for permission to republish or make other authorized use of this material, click here.
AllAfrica aggregates and indexes content from over 125 African news organizations, plus more than 200 other sources, who are responsible for their own reporting and views. Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica.
