Home Business Cross-border traders protest new barriers to trade in food in EAC

Cross-border traders protest new barriers to trade in food in EAC

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Kenya’s Cabinet Secretary in charge of East African Community Affairs Rebecca Miano says she has held talks with her counterpart in Tanzania over the export crisis at the Namanga border, where more than 200 maize-laden trucks were stranded over permits, and a solution is on the cards.

Miano told journalists Thursday that she had been in talks with Stergomena Tax, Tanzania’s Minister for Foreign Affairs and East African Cooperation, to unlock the impasse at the border, which has lasted over two weeks.

Trucks loaded with maize from Tanzania were barred from crossing into Kenya after the Tanzanian authorities stopped issuing maize exportation permits.

Cross-border importers have termed the change in policy by Dodoma as a re-emergence of non-tariff barriers (NTBs), especially on food trade, even as the Community continues to seek resolution to these challenges.

“Tanzania changed its rules on maize exportation. This caused a problem in Namanga,” Miano said on Thursday.

The minister, speaking from Lusaka, Zambia, where she had accompanied President William Ruto to a Common Market for Eastern and Southern Africa (Comesa) Summit, said: “I spoke to my counterpart in Tanzania, Hon Tax, and she has assured me that the matter will be sorted out today (Thursday).”

By press time, at least 200 trucks, all carrying an average of 6,000 tonnes of maize, had been allowed to cross the border after the talks between the two countries, but a majority were yet to fully comply with Tanzania’s regulations.

Tanzania Minister for Agriculture Hussein Bashe blamed the impasse at the border on exporters, saying they lacked relevant documentation.

“There are no documents to legalise the export of the stranded maize at Namanga; and food safety and quality certificates from Kenya,” Bashe said, warning that confiscation of the consignments by the government was a possibility.

Up north in South Sudan, a similar dispute continued to simmer as 72 Ugandan trucks loaded with maize flour have been stuck at the Elegu-Nimule border crossing for a month now, after Juba said preliminary tests showed the flour had high aflatoxin levels.

While aflatoxin, caused by high moisture and poor drying methods, is a health risk, including potential to cause cancer, both sides can’t agree whose results should be relied on. Kampala says it tested the flour and approved the export, while Juba says random tests showed too high levels. Uganda this week formally protested the delays.

Last week, the EAC announced it had resolved 10 NTBs as four new ones emerged.

The 42nd Meeting of the Sectoral Council of Ministers on Trade, Industry, Finance and Investment (SCTIFI) that was held on June 6 at the EAC Headquarters in Arusha, was informed that eight NTBs remained outstanding and were at different levels of resolution.

The meeting chaired by Burundi’s Minister of Trade, Transport, Industry and Tourism, Marie Chantal Nijimbere, directed partner states to resolve all outstanding NTBs.

Food wars fears

The two cases of trade spats have heightened fears of an escalation of food wars in the region as other EAC partner states mull ways of protecting their scarce resources.

Kenyan importers are required to register in Tanzania as Dodoma moves to implement measures announced last year to regulate food trade.

Bashe said last week that traders from foreign countries are only allowed to buy agricultural crops through locally registered companies.

“Countries that purchase crops from Tanzania, including Rwanda, Uganda, Kenya, Democratic Republic of Congo, are required to follow outlined procedures,” Bashe said.

The government last September directed that all foreign traders register their companies in Tanzania before they can be issued with export permits.

Exporters and importers are to register with the Business Registrations and Licensing Agency (Brela) and obtain tax clearance certificates and business permits allowing them to trade in grain.

The directive, which traders who spoke with The EastAfrican consider punitive and double taxation, comes as millers grapple with supply gaps that have seen the price of a 90kg bag of maize hit a historic high of Ksh6,700 ($48), pushing the cost of a 2kg packet of flour close to Ksh250 ($1.80).

The move is also a major blow to Kenyan millers, who have been eyeing imports from Tanzania to meet their needs.

Tanzania, which is harvesting this season’s crop, is a major source market for Kenya, as Uganda sells to South Sudan, where the prices are better.

“We have been sourcing our maize from Tanzania, but we are no longer getting export permits from the authorities there,” said Atin Aggarwal, chief executive of Trident Millers Ltd.

“The Tanzanian government wants us to give money to local traders so that they source the grain and bring it to us at the border.”

Kenya waived duty on maize coming from outside the East African region starting February but has so far received only 100,000 tonnes, with millers citing scarcity in the global market.

Nairobi is at a crossroads over bringing down the cost of flour, with the import strategy appearing not to yield the desired results.

But Tanzania’s Agriculture minister Bashe said the restrictions imposed on purchase of agricultural crops, especially cereals, directly from farmers do not target any country. He said compliance was required for traders from all countries buying produce from Tanzania.

Meanwhile, Kampala and Juba are headed for a collision over the quality of maize flour exported to South Sudan from Uganda, following a disagreement on the test results for aflatoxin.

Edith Mwanje, Uganda’s Permanent Secretary in the Ministry of East African Affairs, in a June 5 letter to South Sudan’s East African Affairs ministry undersecretary Andrea Aguer Ariik Malueth, complained about delays in clearing of commodities from Uganda.

According to Mwanje, Uganda has offered its laboratory in Gulu – built and equipped by TradeMark Africa – to South Sudan for further tests on the food items, but South Sudan has rejected the offer, preferring laboratories abroad.

“We are informed that the impounded consignments failed to pass the rapid tests conducted at Nimule and samples have been exported for further investigation. However, there is no clear timeline as to when the confirmatory results shall be available,” the letter reads.

Uganda’s technical team dispatched to defuse the tension at Elegu-Nimule questioned Juba’s competency in testing for aflatoxins in grains, and suggested the matter was being used to raise a new non-tariff barrier.

Stephen Asiimwe, Private Sector Foundation of Uganda CEO, who is coordinating the technical team, said experts from the Uganda National Bureau of Standards (UNBS) say the method used by South Sudan to disqualify Uganda’s products is not scientific.

This was after Ugandan drivers who deliver grains to Juba said that officials from the South Sudan Bureau of Standards (SSBS) make impromptu quick tests for aflatoxin, which, according to Ugandan officials, cannot be relied on.

Rapid tests involve subjecting samples to observation using hand-held mobile tools. The observation may raise the alarm but is not conclusive.

SSNBS says it has tightened food safety standards, especially on maize flour, wheat flour and sorghum imported from Uganda, over fears of inappropriate processing.

“We have tested a lot of maize containers, and we found, through measurements that there are some levels of aflatoxins that are higher than normal limits,” said Mary Gordon, chief executive of SSBS.

“We stopped them from moving, and we are doing further investigations.”

She, however, explained that the tests conducted were preliminary, and they have now involved a third-party laboratory outside South Sudan for another opinion.

There was no clear timeline on when the confirmatory results are expected, and neither was there indication of which labs had been contracted for the third opinion.

Uganda has since sent a team led by Stephen Asiimwe to the Elegu-South Sudan border to defuse the tension.

According to Asimwe, 72 trucks with maize flour have since been impounded, the bulk of which was milled by companies certified by the Uganda National Bureau of Standards.

Kampala has asked their counterparts in Juba to allow the truck drivers to offload the questionable maize flour in a designated area as they await investigation results.

“SSBS claims rapid tests were carried out to ascertain the levels of aflatoxins in Uganda maize,” UNBS executive director David Livingstone Ebilu said on Wednesday.

“The UNBS team was unable to physically inspect the impounded maize flour consignment, as it was denied the opportunity.”
Four millers – Richard Millers Ltd, Tariq General Suppliers Ltd, Lwabenge Investment and Beshir Milling Investments – had their maize flour certified by UNBS.

Emerging issues

According to UNBS, confiscation of Uganda’s maize flour started on the May 10 when South Sudan cited “infestation with living insects”. After that trucks containing 1,736 tonnes of maize flour were impounded for “high levels of aflatoxins” and were still being held as of June 7.

The EAC continues to grapple with emerging NTBs, but the complaints keep coming up.

For instance, Kenya has complained that Uganda is denying it market access under preferential treatment by charging the full Common External Tariff of 35 percent on juices originating from Kenya.

Nairobi has also reported Tanzania for allegedly subjecting its exports of animal and animal products to discriminatory treatment, despite their commitment in a bilateral meeting to resolve the discriminatory charges by June 2022.

Tanzania, on its part, has introduced new taxes on maize exports to Kenya.

The new barriers contravene Article 13 of the Customs Union Protocol, where EAC partner states agreed to remove NTBs and not impose any new ones.

John Kalisa, East African Business Council CEO, told The EastAfrican that the “ad hoc measures” that Tanzania has introduced disrupt trade.

“Before you introduce new measures there is a need to consult with the private sector to avoid a scenario such as the Namanga one. Goods produced within the region are treated as regional goods. They enjoy what we call national treatment. Traders, whether Rwandan, Ugandan or Kenyan, should be treated as Tanzanian traders. This is not the spirit of integration as it undermines the Customs Union and Common Market. The effect is that it increases the prices and hurts the consumers,” Kalisa said.

Traders whose cargo has been stuck at Namanga for two weeks are counting losses, especially because a majority of the trucks were hired.

Tanzania’s new requirements require maize traders to part with close to $1,000 in taxes payable under export and importation rules and requirements.

A truck with 20 tonnes of maize and above will pay Ksh75,000 ($760) while those carrying below 20 tonnes will part with Ksh45,000 ($323), a customs official at the Namanga border not officially authorised to speak to the media, said.

Some of the Kenyan traders who bought maize in Tanzania said they were issued with permits but on reaching the border, they found out the permits had expired.

“That permit should show that at that particular time I’m loading my cargo it is valid. Otherwise, it doesn’t reflect in the system at the border,” the official explained.

To import crops to Kenya, one must obtain clearance from the Kenya Plant Health Inspectorate Service (Kephis), a government agency whose responsibility is to assure the quality of agricultural inputs and produce to prevent adverse impacts on the economy, the environment and human health.

“With Kephis, a trader should have an inventory: there is a password that you are given. So they have control measures. You apply online so that they can see what you are bringing in,” explained the official at Namanga.