Uganda, Kenya finally resolve sugar disagreement

Workers sort sugarcane for processing. Uganda and Kenya have finally resolved their sugar trade dispute. Photo/Morgan Mbabazi 

By Stephen Otage

In Summary

• 100 per cent - The amount of tax levied on sugar coming from outside the East African community to protect local industries.
• 150 - The number (in thousands) of metric tonnes of surplus sugar Uganda is currently producing.

The Uganda Revenue Authority (URA) and the Kenya Revenue Authority (KRA) have finally resolved the sugar trade dispute which has been raging between the two countries over the source of sugar entering Kenya.

 

According to Mr Jim Kabeho, the President Uganda Sugar Millers Association, the tri-lateral North Corridor Sugar trade meeting of the revenue authorities of Uganda, Kenya and Rwanda held on Monday in Kampala resolved that Kenya’s delays to issue permits for Ugandan sugar is becoming a non-tariff-barrier which has caused Ugandan millers heavy losses.

In an interview with the Daily Monitor yesterday, Mr Kabeho revealed that Uganda and Kenya instead blamed Rwanda for destabilising the regional sugar market by importing and repackaging duty free sugar which it is dumping in the region.

“Sugar is a very sensitive commodity and I am happy that Kenya has accepted our Sugar there and now we shall be sending our trucks but still, Rwanda is importing duty free sugar which it is dumping here and this is destabilising the market,” he said.

Since 2011, Uganda and Kenya have been locked in a sugar trade dispute where Kenya has been blocking Ugandan sugar from entering its market. Kenya claimed that Uganda was repackaging sugar which it allowed to be imported duty free at the height of scarcity in the domestic market in 2011.

READ: Attempts to shield local firms fuel trade disputes among EAC States

Richard Kamajugo, the commissioner of Customs at URA, said that the three revenue authorities agreed that that Kenya Sugar Board (KSB) should reduce the number of days it takes to issue permits from three months to seven days and that the Uganda Sugar Millers Association and KSB begin sharing information with the respective revenue authorities to avoid suspicion.

“We agreed that Kenya Sugar Board will issue sugar permits within seven days as opposed to previously where it could take up to three months, and we also agreed that they will be exchanging information with the revenue authorities,” he said.

Asked if indeed Uganda has met domestic demand to warrant supplies to the export market, Mr Kabeho said Uganda is the first country in the region to hit surplus production and it has enough sugar to feed the export market.

“Our domestic consumption is 320,000 tonnes yet we are producing close to 450,000 tonnes annually we are selling to the export market,” he said.

Source of sugar dispute

Uganda was hit by scarcity in 2011 resulting in riots popularly known as Walk-to-work which forced government to negotiate with the East African Community (EAC) member states to allow it import duty free sugar to stabilize the domestic market.

Later, Kenya suspected that Uganda imported sugar which was over and above what it had negotiated for and that it was repackaging it as Ugandan milled sugar and exporting to Kenya. This formed the base for disputes.

READ: Uganda sugar millers worry as country joins Comesa

This led to a number of technical team visits to verify Uganda’s capacity to produce surplus sugar for export which has been satisfactory.