Bad deal? Questions on Kenya-Uganda import talks

President Uhuru Kenyatta welcomes his Ugandan counterpart Yoweri Museveni at Moi International Airport in Mombasa on March 27, 2019. The two leaders want to deepen trade ties between Nairobi and Kampala. PHOTO | PSCU 

In Summary

• The pledges seemed to incense the public, which went on social media to claim the country was mortgaging its economy.
• By allowing Uganda to sell more goods to Kenya and giving it free land for dry port, government hopes country will accept the railway pact.
• But the cries of Kenyan traders may have a basis. Since 2015, trade with Uganda has been benefiting Kampala. In 2012, Kenya sold to Uganda goods worth Sh76 billion but those sales dropped to Sh62 billion in 2017, as Uganda sold Sh49 billion.

By AGGREY MUTAMBO
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Kenya agreed to allow in more Ugandan goods in the hope that Kampala will finally reach a favourable decision to extend the Standard Gauge Railway to its territory.

On his three-day State visit, Ugandan President Yoweri Museveni seemed to have scored more points for his government to boost trade sales into Kenya, leaving the public to accuse Kenyan officials of way too much easily.

COMMERCE

Nairobi agreed to raise Ugandan sugar exports quota into Kenya from 36,000 to 90,000 metric tonnes, as long as they prove they manufactured it.

Kenya also lifted the ban on Ugandan poultry and offered it land in Naivasha for an inland dry port.

The pledges seemed to incense the public, which went on social media to claim the country was mortgaging its economy. Still, there was no guarantee from Kampala that it will buy into the railway deal.

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On Saturday, senior government officials were defending the deals as “mutually beneficial”. The Principal Secretary at the Foreign Affairs ministry Macharia Kamau stated in a short text message: “The point of all this is to create a more integrated market where we have free flow of goods and services between the two countries without hindrance. And to create better competition for our markets internally and within East Africa.” The chief administrative secretary at the same ministry, Mr Ababu Namwamba, was even more candid; “The talks led by our two presidents cleared a number of gridlocks that have been constraining free flow of commerce across our borders.”

“Overall, the deals should raise the volumes of trade between these two close partners with the domino effect likely to pull the rest of the East African Community along,” he added.

The unsaid target though seemed to be the SGR. At a cost of about Sh400 billion, the line that now runs from Mombasa to Naivasha is not yet viable, despite carrying 3.2 million containers of cargo between Kenya’s biggest cities so far.

State House said it was inviting Uganda to come on board, having done so initially without success.

“Kenya is inviting Uganda to join in the joint development of the SGR to ensure it continues to Kampala,” State House said during the visit.

REGIONAL RAIL

The actual length through Kenya could cost the government more than Sh750 billion, from Mombasa to Malaba. Most of the money is coming from China in form of loans. The matter of financing for the remainder of the line is currently under fresh discussion between Nairobi and Beijing, but Uganda has previously been reluctant because of high debt.

When President Uhuru Kenyatta toured Beijing last year, he proposed that part of the money from China should come as a grant, to alleviate the debt burden on Kenya.