Kenya-Uganda Trade Tensions Escalate Amid Dairy and Fish Export Disputes
By John Kusolo
Trade relations between Kenya and Uganda, two key players in East Africa's economy, are currently facing significant challenges. The longstanding rivalry between the neighboring countries has flared up once again, this time manifesting in restrictions on dairy and fish exports.
Despite recent efforts by their governments to solidify bilateral ties, businesses on both sides of the border are encountering substantial obstacles, frustrating efforts to foster economic cooperation.
Dairy Export Dispute
The Ugandan dairy industry is particularly aggrieved by Kenya's refusal to issue permits for milk product exports. Brookside Limited, a major player in Uganda's dairy sector and owned by Kenya's Brookside Dairy, has been significantly impacted. The company's general manager, Benson Mwangi, lamented the ongoing ban and revealed that since March last year, Brookside Limited has been denied 114 export permits by the Kenya Dairy Board (KDB).
“We were delighted to read the communique signed by the two countries when the two heads of State met in Nairobi, as we believe it was key to unlocking trade barriers which have existed since March last year. However, a month later, we are yet to receive export permits for our long-life milk, which includes powder and UHT processed milk,” Mwangi stated.
Uganda relies heavily on the Kenyan market, with over 80 percent of its milk exports destined for Kenya, according to data from the Uganda Dairy Development Authority. The restrictions have forced Ugandan dairy firms to consider alternative markets in North and West Africa, but these do not offer the same volume or ease of access as the Kenyan market.
Brookside Limited has experienced severe repercussions due to the permit denials, having to lay off half of its workforce in Uganda. The company claims the ongoing restrictions have cost it 75 percent of its market share, significantly hindering its operations and ability to service its major market at optimal levels.
Fish Export Impasse
The trade tensions are not limited to dairy products. Ugandan authorities have blocked fish exports from Kenya and South Sudan that were destined for the Democratic Republic of Congo (DRC). More than 400 tonnes of fish, valued at approximately Sh210 million, have been confiscated by the Uganda Fish Protection Unit (UFPU) at the Mpondwe border with DRC. The trucks carrying the fish have been denied exit, causing significant distress to exporters.
The Kenya National Chamber of Commerce and Industry has voiced its concern over this issue. In a letter dated June 4, 2024, addressed to Ugandan Minister for Trade, Industry, and Cooperatives Francis Mwebesa, the Chamber protested against the forced offloading of fish destined for DRC’s Bukavu, Kisangani, and Goma areas.
Political Efforts and Economic Implications
These trade disruptions occur despite recent high-level political engagements aimed at enhancing bilateral relations. In May, President William Ruto of Kenya hosted Ugandan President Yoweri Museveni in Nairobi, where they reaffirmed their commitment to strengthening cooperation in trade, transport, infrastructure, and regional integration. However, the practical implementation of these commitments appears to be lagging, with regulatory hurdles continuing to impede business operations.
The ongoing trade tensions between Kenya and Uganda highlight the fragility of economic relations in the region. While political leaders express intentions to bolster cooperation, on-the-ground realities reveal a starkly different picture. The dairy and fish export disputes underscore the need for effective mechanisms to resolve such conflicts and ensure that bilateral agreements translate into tangible benefits for businesses. Without such measures, the economic potential of the East African region may remain underutilized, to the detriment of all parties involved.
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