Kenya, Uganda Locked In New Sugar Trade Dispute

Posted by: Kyeyune Andrew Jonathan in Business September 3, 2021

Uganda has protested a 79% cut on its scheduled sugar exports to Kenya, reigniting a trade dispute between the two countries. Agriculture Minister Frank Tumwebaze said Thursday Uganda was ‘’not happy’’ with the restrictions on its sugar exports to Kenya.

‘’We need an honest conversation about these trade restrictions from your side’’ he said in a tweet to his Kenyan counterpart, Peter Munya.

Mr. Tumwebze said this as a reaction to a notice by the Sugar Directorate in Nairobi. The notice said traders will only be allowed to import 18,923 tonnes from Uganda, down from 90,000 tonnes.

This is what Kenya had earlier agreed to import from its landlocked neighbor.

Betty Maina, Kenya’s Trade Cabinet Secretary, and her Ugandan counterpart had earlier come to an agreement in April.

They had agreed that Uganda would export 90,000 tonnes of sugar to Kenya as soon as the verification mission of the country of origin got completed.

A deal between the two countries struck three years ago allowed Uganda to export sugar into Kenya. But Nairobi delayed the implementation until late 2020 when they finally allowed Uganda to ship in 20,000 tonnes of the said 90,000.

The sudden change of plans by Kenyan authorities has rubbed their Ugandan counterparts the wrong way.

This slam even came amid threats of retaliatory action.

‘’Kenya imports about 450,000 tonnes. If your sugar board (trade police) allowed Uganda to export to Kenya its 150,000 tonnes still your sugar import demand would remain unmet. So nothing explains the restrictions on Uganda,’’ Mr. Tumwebaze said.

Official data shows that Uganda produces about 510,000 tonnes of sugar annually of which 360,000 are consumed locally. The balance is then left for exportation.

In response to Kenya’s concessions, Uganda committed to abolishing the 13% excise duty on many Kenyan manufactured products.

Additionally Uganda advanced to abolish the 18% VAT charged on processed poultry meat imported from Kenya.

Despite all these pledges, both countries have reneged on implementing some of them. This triggered intermittent disputes such as the one about sugar.

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