23 September 2017

Tanzania: Govt Says Unaware of Kenya's Border Wheat Import Fee Hike

The government has said it is not aware of Kenya's decision to raise inspection fee on Tanzania's wheat exports by 13 times.

Kenya reportedly increased the wheat inspection fee at the border from Ksh600 (about Sh13,000) per truck to Ksh8,000 (Sh176,000), a move that will technically lock out the commodity, threatening to escalate a trade war between the two neighbouring countries, according to the Business Daily of Kenya.

"I am not aware of the decision," Industry, Trade and Investment Minister Charles Mwijage told The Citizen by telephone.

"Yes, we have issues pertaining to trade with our neighbours, which prompted the government through my Permanent Secretary to hold a meeting with them on September 8 in Dar es Salaam, but not the wheat inspection fee."

Mr Mwijage called on traders to inform him about any issues related to trade barriers so that they could be addressed. Unless the issue is solved, Kenya's decision will increase the cost of doing business for Tanzanian traders, who export their wheat products to the neighbouring nation, making Tanzania's wheat uncompetitive in Kenya's market.

The two East African countries have been in a head-on dispute over wheat trade with Tanzania citing Kenya at the East African Secretariat early this year for blocking it from exporting the commodity to the local market.

In April, the Council of Ministers from EAC said Kenya had ignored guidelines issued by the secretariat allowing wheat products from Tanzania to enter the country duty-free under the EAC common tariff.

Kenya and Tanzania do not produce sufficient wheat and rely on imports to meet demand.

Kenya is a net importer of wheat, bringing in two-thirds of the annual consumption of 900,000 tonnes against local production of 350,000 tonnes.

Tanzania has been Kenya's second largest market in the region after Uganda, providing a range of products, including palm oil, soap, medicine, cooking fats, iron sheets, sugar confectionery and margarine.

In April this year, Kenya's Ministry of Energy banned imports of cooking gas through the Kenya-Tanzania border, a move which, according to Kenya, meant to eliminate illegal cooking gas filling plants, which have cropped up in various parts of the country posing safety and security risks.

But in July this year, the two countries through their Heads of State President John Magufuli and Kenyan Uhuru Kenyatta held successful talks expected to see the lifting of restrictions on imports from either country.

Kenya's total exports to Tanzania went down by 34 per cent in the first five months of the year to Sh4.35 billion, raising concern over the impact of the trade standoff.

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