Officials in Uganda have expressed frustration over the economic restriction placed on its product by its neighbor, Kenya, and have threatened to sue in the East African Court of Justices if the matter is not harmoniously resolved by the end of this week.
State Minister for East African Affairs, Julius Maganda, revealed that Uganda “has requested for the Attorney-General to put the matter to the community’s business council as we wait for what will come out of the summit scheduled for February 26 and 26, but if all the options fail, we are considering going to court…”.
The Government trade Minister Mr. Emmanuel Mutahunga argued that the government has tried all diplomatic channels with other states to resolve the standoff but to no avail and thus left no choice but to sue Kenya “If this fails” (referring to ongoing negotiations).
Kenya has last year placed restrictions on the importation of milk products from Uganda into its market, a move that authorities in Uganda consider to be a contravention of the East African Common Market commitments that guarantees the unfettered free movement of goods and services with the East African Community trading bloc.
Kenya is rated as the economic, financial, and transport hub of East Africa. Its GDP growth has been peaked at over 5% for the last decade. Since 2014, Kenya has been ranked as a lower middle-income country because its per capita GDP crossed a World Bank threshold but until the outbreak of the pandemic. On the other hand, its neighbor, Uganda’s economic growth has slowed since 2016 bad fiscal policies and public debt.
Amid the recent tough talks, Kenya’s Agriculture Cabinet Secretary, Peter Munya, has announced tighter measures to control the imports of milk coming in from Uganda. Mr. Daniel Birungi, the Uganda Manufacturers Association (UMA) executive director, is much irritated by the lack of option of retaliation by the Government of Uganda.
The trade war is not exclusively between Uganda and Kenya. In 2019, Tanzania blocked a key Uganda Product from entering its market. Only to allow 20,000 tons of sugar in 2020.
The East Africa economy has registered some improvements in the past decade with its trading relations, including the establishment of transcontinental trade corridors to international ports at Mombasa and Dar es Salam.
Although commentators have argued that intra-African trade is a panacea for the development of the continent, it remains to be realized in the continent despite the recent launching of the African Continental Free Trade Area (AfCFTA) which aim to boost the economy of the continent.
The trade restriction and counter restriction are detrimental to the economic growth of both nations.