Market News

World Bank sees UG-Kenya trade spat hurting EAC


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Livestock principal secretary Harry Kimtai. FILE PHOTO | NMG

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Summary

  • The two countries have been locked in a trade dispute since December 2019, stemming from Kenya’s decision to restrict milk imports from Uganda.
  • Kenya has been planning to visit Uganda to ascertain that all the milk that comes from there is produced by local farmers, following allegations that the commodity is imported from third-party countries.
  • Kenya wants to find out if Uganda has been adhering to the East African Community rules of origin on milk exports before resuming normal trade.

The World Bank has warned that the trade dispute between Kenya and Uganda could affect the smooth progression of economic pacts within the East African Community.

The two countries have been locked in a trade dispute since December 2019, stemming from Kenya’s decision to restrict milk imports from Uganda.

World Bank notes that this dispute does not augur well with the recently established African Continental Free Trade Area, pointing out that failure to find out a lasting solution to this restrictive non-tariff barrier would likely stall any major private investment in the dairy sector within the next few years.

“Such disputes within the EAC, an established and relatively successful economic bloc, hailed as one of the most successful on the continent, risks jeopardising all other trade pacts within the community,” said World Bank in its 2021 country diagnostic report.

Kenya has been planning to visit Uganda to ascertain that all the milk that comes from there is produced by local farmers, following allegations that the commodity is imported from third-party countries as powder and reconstituted before it is exported to Kenya.

Kenya wants to find out if Uganda has been adhering to the East African Community rules of origin on milk exports before resuming normal trade.

Livestock Principal Secretary Harry Kimtai said they are waiting for the Ministry of Trade to issue a date when they can visit Uganda for this trade mission.

The meeting has been postponed four times in the past year.

The bilateral talks in December discussed and resolved trade issues touching on poultry, eggs, sugar and fish.

World Bank says Uganda is home to Sub-Saharan Africa’s seventh-largest head of cattle, between 13 and 15 million—about a third of which are raised specifically for dairy production—ranking Uganda in the top 25 of all countries in 2021.

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