According to the AGRA Food Security Monitor, East Africa has seen significant developments that are set to have a substantial impact on regional food trade in the month of August 2023. These events come in the context of efforts to bolster intra-African trade and navigate intricate trade relationships.
The Kenyan government has granted licenses to domestic sugar companies, permitting them to import sugar from beyond the Common Market for Eastern and Southern Africa (COMESA) region. This move aims to alleviate the burden on consumers who have been grappling with the soaring prices of sugar, currently priced at approximately Sh510 for a two-kilo packet.
Controversy has arisen over Kenya’s proposal to impose an Export Development and Promotion Levy (EIPL) on imports. This measure has faced opposition from various quarters, including the Kenya Association of Manufacturers (KAM), the Federation of Kenya Employers, and tax consulting firms. Concerns have been raised about the potential repercussions for Kenya’s trade relationships with its East African Community (EAC) allies.
Kenya has made a commitment to intensify trade volumes with Mozambique as part of a broader strategy to establish a more favorable trade balance for the country.
Trade dynamics with Tanzania have experienced a shift, as Tanzania has introduced new regulations restricting the issuance of export permits for goods destined for Kenya and Uganda. This has resulted in a reduction in Kenya’s imports from Tanzania.
The Rwandan government has granted authorization to 35 domestic manufacturers to import over 213,000 tonnes of sugar for industrial purposes in the current fiscal year, exempting them from import duties. This move is aimed at supporting local industries.
Rwandan goods now enjoy duty-free access to markets in Gabon, Ghana, Togo, Botswana, and South Africa. Additionally, service providers from Côte d’Ivoire, Cameroon, and Lesotho can provide their services in Rwanda without encountering barriers to market access or national treatment.
The Tanzania Ports Authority (TPA) has introduced several incentives for Ugandan shippers, including a 30-day free storage period for all imports, with the goal of boosting trade and facilitating smoother trade operations.
However, the Tanzanian government’s decision to restrict food exports to Uganda and Kenya has sparked criticism from several members of the Tanzanian parliament. They argue that this move has the potential to hinder free trade and has left farmers in Tanzania struggling with significant food stocks amid declining prices.
The World Bank has announced a substantial $730 million grant for the enhancement of the Addis-Djibouti corridor. This funding comes in the wake of the newly-approved Regional Economic Corridor Project under the Horn of Africa Initiative, signifying a major development aimed at improving regional trade infrastructure.
These developments underscore the dynamic nature of cross-border trade in East Africa and highlight the critical role of government policies and international collaborations in shaping the region’s trade landscape.
The Food Security Monitor is produced with support from the UK Government’s Foreign, Commonwealth & Development Office (FCDO) through the Africa Food Trade & Resilience Programme.