Kenya exports to Uganda drop as rest of EAC soar

Kenya’s exports to Tanzania grew the sharpest among all East Africa Community (EAC) markets in the six months to June, new data shows, outshining the country’s slumped performance in its top trading destination, Uganda.

Statistics by the Central Bank of Kenya shows Kenya’s exports to Uganda dipped 8.5 per cent to Ksh46.77 billion ($386.3 million) during the half year compared to a similar period in 2021—breaking a growth trend in all EAC markets including Tanzania, Rwanda, and South Sudan.

Kenya’s exports to Tanzania jumped the highest by 46 per cent to Ksh28.66 billion ($236.7 million) extending a good trade run between the pair amid ongoing elimination of non-tariff barriers.

There was a 39 per cent growth in Kenya’s exports to Rwanda in the half year to June to hit Ksh19.28 billion ($159.2 million). Kenya's exports to South Sudan were up 34.11 per cent to Ksh13.73 billion ($113.4 million) in the period.

Although Uganda remains Kenya’s main export market, frequent trade tiffs over items such as sugar, eggs and milk have often soured trade. For instance, in June Uganda accused Kenya of sparking a fresh trade row by reintroducing a levy on eggs from the neighbouring country.

Uganda said Kenya is now taxing its eggs at a rate of Ksh72 ($0.59) a tray, bringing back a levy that had been suspended last December following bilateral talks between Kampala and Nairobi. The latest row came at a time when the two countries are yet to resolve a long-standing dispute on milk after Kenya barred Uganda’s dairy products in 2019.

Kenya had in the last two years restricted exports of poultry and dairy products from Uganda, straining the relationship between the duo.

The issue on poultry was resolved after Uganda threatened to ban Nairobi from exporting its goods to the landlocked neighbour. In 2020, Kenya barred sugar from Uganda and sugarcane, costing traders who were exporting the raw material to sugar mills billions of shillings as the crop was left to rot on trucks at the border.

Contrastingly, Kenya’s trade with Tanzania has grown steadily in the past years in the wake of improved relations between the two countries after years of feuds that at one point resulted in retaliatory measures such as trade bans.

Retired President Uhuru Kenyatta and his Tanzanian counterpart, Samia Suluhu ended persistent strained trade ties between the two largest economies in the six-nation EAC bloc which have, for years, hindered the smooth flow of goods and services.

Data by the KNBS shows that the value of Kenya’s exports to Tanzania jumped 43.39 percent to Ksh45.6 billion ($376.6 million) in 2021 compared to the previous year.

Tanzania’s exports to Kenya on the other hand grew 95.3 percent last year—nearly double-to Ksh54.47 billion ($449.9 million) last year.