3 June 2018

Kenya: Nairobi Ultimatum on Dar, Uganda Row

Nairobi has given Tanzania and Uganda one more month to lift a ban on duty-free entry of Kenya-made sweets or face retaliatory action from July 1.

Dar and Kampala slapped a 25 per cent import duty on Kenyan confectionery, juice, ice cream and chewing gum earlier in the year, claiming use of zero-rated industrial sugar imports.

Trade Principal Secretary Chris Kiptoo said revenue and standards bodies from both countries will separately visit Kenyan factories from June 11 in a bid to resolve the trade spat.

"We will make the decision after the verification. We will retaliate (because) that's always there for us any time, but first let's allow this process to go on," he said following the five-day EAC Sectoral Council on Trade, Industry, Finance and Investment (SCTIFI) meeting in Arusha that ended last Wednesday.

"A decision will be made by June 30 and communication will be made by the EAC secretariat on the findings of that verification. But we don't want the verification process to be a moving the goal posts exercise."

The verification process, to be supervised by the East African Community's secretariat, will extend to factories making other products such as cement, lubricants, cosmetics and wooden pallets which have also had difficulties gaining free access into Tanzania.

Dr Kiptoo said Tanzania and Uganda have own lists of Kenyan products they suspect do not meet the rules of origin, which forms the basis for qualification for duty-free market access within EAC under the common market protocol of July 2010.

The blockade of Kenyan sweetened products intensified from March.

Official statistics show exports to Uganda fell 9.52 per cent to Sh12.92 billion in the first three months of the year compared to last year, while Tanzania's rose 20.37 per cent to nearly Sh6.01 billion.

The officials will investigate availability of stocks of duty-free raw sugar shipped into the country under the one-year zero-rate duty remission scheme that Kenya sought from the EAC secretariat last July.

The window, which followed reduced sugar production as a result of a biting drought, allowed importation of raw sugar at zero tax.


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