Kenya and Tanzania to Re-establish Trade Relationship

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Both countries’ traders will now freely export milk, wheat and liquefied petroleum gas (LPG) into either of the countries’ markets following a joint agreement announced on the 5th of July.

Delegates of the two governments, Prof Elisante Ole Gabriel (Tanzania) and Dr Chris Kiptoo (Kenya) stated on Thursday that they have reached an agreement to quickly remove trade barriers that appeared to have escalated recently. The agreement was reached following a three-day consultative meeting held in Dar es Salaam tagged ‘Kenya Day Trade and Investment Forum.

Both delegates disclosed that they have signed a communiqué and matrix on how the sticky trade issues should be resolved as both countries looked to better cross border trade relations. Trade volume between the two countries according to Dr Kiptoo has slowed to $285 million in 2017 from $420 million in 2012. Prof Ole Gabriel reiterated that Tanzania Revenue Authority (TRA) and Kenya Revenue Authority (KRA) have been directed to urgently meet and work on tax matters that were a bottleneck in the conduct of cross-border business between the two neighboring countries whose trade volumes across the border have plummeted by more than half.

“We have agreed to involve our Home Affairs ministries to ensure that we totally eradicate the problem of smuggling,” Prof Ole Gabriel said in line with the recently adopted Blueprint for the improvement of business environment in Tanzania, the government will do everything possible to ensure that it simplifies the procedures for doing business in the country.

Trade between the two countries whose combined gross domestic product account for 76 per cent of the economy of the East African Community (EAC) has been characterized by mistrusts, resulting into banning of several products from accessing the rival’s market.

In 2017, Tanzania banned unprocessed foods, milk products and cigarettes from Kenya while the latter also banned LPG and wheat from the former. The bans were only lifted after the intervention of President John Magufuli and his Kenya counterpart, Uhuru Kenyatta.