Contrary to earlier fears that Kenya would dominate its neighbours in a liberalised regional market, figures show a growing trend towards more balanced trade.

While Kenya retains its industrial advantage, earlier policies of import substitution and protectionism adopted by Uganda and Rwanda plus an open trade regime have led to more balanced trade.

The two countries, which had been Kenya’s biggest markets for long, have started to produce their own value added products thereby reducing the need for imports.

Moses Ogwal, director of policy advocacy and trade at Uganda’s Private Sector Foundation, said EAC integration which requires countries to abolish tariff and non-tariff barriers has opened the Kenyan market.

“Kenyan businessmen can come to Uganda to buy maize, beans, water melons and pineapples without anyone asking questions. This has increased our exports,” he said.

But while it is easy for such food products to enter the Kenyan market, the reverse is difficult because when the region was negotiating the Common Market Protocol, Kenya, which is considered a developing country could only protect few industries unlike the other four partner states which fall under the least developed category.

However, Richard Sezibera the EAC secretary general said this should not worry Kenya as the country’s trade in the region had increased in absolute terms.

“The rising exports to Kenya is a good thing for EAC as it increases intra-regional trade,” he said adding that it was important for intra-EAC trade to stay above 25 per cent for the planned single currency in 2023 to become operational.

In June, Kenya’s exports to Tanzania stood at $30 million. Those to Uganda slowed down from $680.8 million in the 2011/12 financial year to $599 million currently.

Bank of Uganda data shows that Uganda’s exports to Kenya increased from $85 million 10 years ago to $414 million last financial year; exports to Rwanda increased from $22 million to $224 million; those to Tanzania from $9 million to $73 million and Burundi from $12 million to $71 million.

Source URL: The East African

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