Kenya, Tanzania advance talks to end cold trade ties with review of tax practices


Kenya, Tanzania advance talks to end cold trade ties with review of tax practices
Tanzania's President Samia Suluhu Hassan and her Kenyan counterpart Uhuru Kenyatta during a business forum meeting at a Nairobi hotel on May 5, 2021. PHOTO / PSCU

In Summary

  • The agreement will see the pair’s respective Trade Ministers meet at a summit in a month’s time to discuss the easing of non-tariff barriers (NTBs) which have characterized trade between the two East African Community (EAC) partners.
  • The value of trade between Kenya and Tanzania has plateaued in recent years easing to Ksh.58 billion in 2020 from a higher Ksh.60.4 billion in 2012.
  • Apart from assurances on ending frosty trade ties, Kenya wants Tanzania to ratify the European Union trade pact with the EAC (EU-EAC-EPA) along with the African Continent Free Trade Area (AfCTA) as a means of broadening its renewed plea of cooperation.

Head of States from Kenya and Tanzania have agreed to further discussions to end cold trade ties which have defined bilateral ties between the pair in recent years.

The agreement will see the pair’s respective Trade Ministers meet at a summit in a month’s time to discuss the easing of non-tariff barriers (NTBs) which have characterized trade between the two East African Community (EAC) partners.

On Wednesday, President Kenyatta admitted to the impact of the adverse ties which have cut down the volume of trade between the countries in the last decade.

The value of trade between Kenya and Tanzania has plateaued easing to Ksh.58 billion in 2020 from a higher Ksh.60.4 billion in 2012.

“Trade between our countries has thrived but we must accept that it has yet to reach the levels we expected,” President Kenyatta said on Wednesday.

“Prosperity for our two countries hinges on creating a conducive business environment, boosting economic cooperation and growing mutually beneficial trade and investment.”

East African Business Council (EABC) Chairman Nick Nesbitt further identified the barriers to trade as the reason behind declining regional trade with the value of intra-trade remaining below 20 per cent of all trade effected through the bloc.

During her address to delegates, Tanzania President Samia Suluhu was quick to acknowledge restrictive practices by her country as her administration embarks on regulatory reforms to better its business environment.

“Tanzania is highly committed to seeing a vibrant private sector through the industrialization of her economy,” she said.

“We are currently undertaking reviews on tariffs and non-tariff measures such as the issuance of work permits for foreign expatriates, the operation of one stop facilitation centers for investment, removal of nuisance taxes and levies, user fees and other charges. We are also streamlining the functions of regulatory authorities as part of our blueprint to improve the business environment.”

Under the previous regime steered by late President John Pombe Magufuli, Tanzania was fingered for destabilizing regional harmony through putting up fences to trade to leave desired regional integration in doubt.

Tanzania’s new steward has however moved to alleviate concerns assuring the end of the barriers to trade with not just Kenya but also it’s other EAC partners.

Last month, Suluhu made her first maiden visit as President to Uganda renewing hopes for harmony within the EAC trading bloc.

“Mna bahati kwamba, nchi zetu mbili, upande mmoja kuna Uhuru wa kufanya biashara na upande mwingine mna Suluhu wa kuondosha vikwazo vya biashara,” Suluhu told an elated audience.

Apart from assurances on ending frosty trade ties, Kenya wants Tanzania to ratify the European Union trade pact with the EAC (EU-EAC-EPA) along with the African Continent Free Trade Area (AfCTA) as a means of broadening its renewed plea of cooperation.

On its part, Kenya has assured it remains open for business with its Tanzanian counter parts.

“Hatuna lolote la kushindana, sisi letu ni kushirikiana,” added President Kenyatta.

“Wawekezaji wa Tanzania mjue mko na Uhuru wa kufanya biashara hapa bila kuitishwa business Visa na work permits.”

The President further wants respective trade and foreign affairs ministries to boldly engage on easing further debacles to relations.

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