The Kenyan business community is now hopeful Tanzania will uphold its commitment of opening up its borders for trade under the Single Customs Territory (SCT), after President Uhuru Kenyatta’s visit to Tanzania this weekend.
The diplomatic and trade relations of the two countries had last week plummeted following remarks by a Nairobi politician, which indicated foreigners would be thrown out.
Emotions ran high among legislators of the two countries, after Kenyan-Starehe MP Charles Njagua’s remarks on foreigners.
The legislator on June 26, turned the heat on foreign traders accusing them of taking over key city markets, while they harassed. He threatened to flash out foreigners and have them deported.
Njagua’s sentiments were not well received in Tanzania where a heated debate ensued in Parliament, with legislators threatening a diplomatic action against Kenya.
Tanzania’s opposition leader Freeman Mbowe said though Hon.Njagua had uttered the words as an individual, such cannot be ignored as it can easily jeopardise the lives of Tanzanians who have invested in the country.
The developments also provoked emotions among traders of both countries with fears that Tanzania will sanction Kenyan businesses and review its stand on the recently agreed SCT).
This would erode gains made from the week-long meeting held between April 23-27, in Arusha, Tanzania, where government officials from the two countries agreed to streamline cross border trade.
Tanzania has in recent years maintained a hard stand on key regional trade pacts such as the Economic Partnership Agreement (EPA) with the European Union, prompting Kenya and Rwanda to go it alone with individual ratifications.
The two East Africa Community (EAC) member states are also coming out of a trade row on local content which last year saw a tit-for-tat ban on some commodities, imposing of duty on goods, frustration of traders and reluctance in clearing cargo at border points.
President Kenyatta is in Tanzania on a two-day visit on the invite of his host President Magufuli.
The Kenyan leader jetted in the country on Friday in what was described as a “private visit”,where he held talks with his host. He was being hosted by Magufuli in his Mlimani village, Chato district.
Kenyatta’s visit reaffirms Kenya’s commitment to push for a stable and mutual relationship with Tanzania, as well as push for regional integration.
Addressing Chato residents, President Kenyatta insisted on building the East Africa Community (EAC) for growth of the region.
“President Uhuru Kenyatta has today called on East Africans to unite in order to develop a prosperous region. The President spoke when he addressed Chato town residents in Tanzania during the start of his private visit of the region at the invitation of President John Magufuli,” StateHouse Kenya said on its official Twitter handle.
President Uhuru Kenyatta has today called on East Africans to unite in order to develop a prosperous region. The President spoke when he addressed Chato town residents in Tanzania during the start of his private visit of the region at the invitation of President John Magufuli. pic.twitter.com/kSiZ6Uu7jG
— State House Kenya (@StateHouseKenya) July 5, 2019
“President Kenyatta has since cautioned political leaders against making inflammatory remarks saying “no one will be allowed to sow seeds of division among East Africans.”
The President said through open trade and enhanced people-to-people interactions, the region will be able to deal with the challenges facing its people including poverty.
The President said through open trade and enhanced people-to-people interactions, the region will be able to deal with the challenges facing its people including poverty. pic.twitter.com/RYOP1PXSp4
— State House Kenya (@StateHouseKenya) July 5, 2019
On his part, President Magufuli thanked President Kenyatta for the private visit saying he was honoured to host the Kenyan leader in his home village. He said President Kenyatta has made history for being the first Head of State to visit Chato which is a township in the Geita region.
Business community stand
The business community led by the East African Business Council (EABC) has expressed gratitude to the two Presidents’ meeting, saying it reaffirms unity among the two neighbouring countries.
“With the two brothers meeting, we are in safe hands. EABC and the Kenya Private Sector Alliance is clear on the stand of the Kenyan business community. We want businesses in the region to thrive. Political utterances do not reflect the stand of the business community,” EABC chairman Nicholas Nesbitt told The Exchange in a telephone interview.
“I have personally met Magufuli. He is a gentleman and wants to do good for the people and the region,” Nesbitt added.
Open borders and trade
The two countries recently agreed to implement a Single Customs Territory (SCT) to enhance clearance of goods and promote trade.
In a week-long meeting held between April 23-27, in Arusha, Tanzania, government officials from the two countries agreed to streamline cross border trade.
The fourth bilateral trade meeting on Non-Tariff Barriers (NTBs) was co-chaired by Tanzania’s Industry and Trade Minister Joseph Kakunda and Kenya’s Industry, Trade and Cooperative Principal Secretary Chris Kiptoo.
The meeting reviewed progress made in implementing decisions agreed upon during the bilateral trade meeting held in Dar es Salaam between July 3 -5 2018, and underscored the importance of ensuring they comply with the commitments made between the two countries.
“Out of the 37 NTBs reported, 19 have been resolved and the remaining 18 decisions have been made on how to resolve them,” the government officials reported after the Arusha meeting.
The two states have agreed to fast track the process of harmonization of domestic taxes, levies and fees while they follow procedures stipulated in the EAC Customs Management Act 2004 and the Standardization, Quality Assurance, Metrology and Testings (SQMT) Act, 2016 in the inspection and clearance of goods.
They also agreed to fast track the process of verification missions recommended for confirmation of product origin as provided for in the EAC Rules of Origin.
“It was agreed that compliance with the Rules of Origin to be upheld and preferential treatment to be accorded to products that qualify,” the joint communique read in part.
Regulatory Agencies have also been tasked to engage and address administrative issues whenever they arise before they are brought to bilateral meetings. The agencies are to meet ahead of bilateral meetings.
Kenya’s envoy to Tanzania Dan Kazungu has also reaffirmed the country’s commitment to the good relations with Tanzania.
Kazungu who recently met Tanzania’s Prime Minister Kassim Majaliwa said the two governments are keen to drive unity and support growth of businesses and cross-border investments.
“Tanzanians are our brothers and the two countries have a healthy cordial bilateral relationship. We are working to make things even better,” Kazungu told The Exchange.
“We want to make Kenya and Tanzania the leading industrial destinations in the region even as we head into the African Continental Free Trade Area,” Kazungu added, noting that the pending NTBs will be addressed within the shortest period possible with the next bilateral meeting set for set for this month, to be held in Mombasa, Kenya.
Kenya and Tanzania remain key trading partners. Trade volumes between the two states slightly gained last year with export value closing at US$290.5 million from US$277.9 million, 2017, the Kenya Economic Survey 2019 shows.
Imports from Tanzania increased to US$173.5million from US$167.7million in 2017 despite back-to-back trade differences.
The value of Kenyan investments in Tanzania is above US$2 billion mainly in financial services and information technology sectors, with over 500 projects, making it among the top five investors in the country.