In a move that threatens to further strain trade relations between Kenya and Tanzania, President Samia Suluhu Hassan’s administration has introduced new taxes on Kenyan dairy and meat products, including milk, sausages, and eggs.
These measures have raised concerns among Kenyan exporters and have the potential to disrupt the flow of goods within the East African Community (EAC).
Since July 2022, Tanzania has enforced an import fee of Tshs 3,000 per kilogram on meat products, as stipulated in the Animal Diseases (Animals and Animal Products Movement Control) (Amendment) Regulations, 2022.
This fee, along with additional charges such as a 2% Free on Board (FOB) fee by the Tanzania Meat Board, a 0.4% FOB fee by the Tanzania Atomic Energy Commission, and a 0.2% FOB fee by the Weights and Measures Agency, has made Kenyan meat products less competitive in the Tanzanian market.
Kenya argues that these charges violate the EAC Customs Union Protocol, which aims to eliminate internal tariffs and charges of equivalent effect.
Efforts to resolve this issue have included bilateral meetings, with Kenya urging Tanzania to abolish these discriminatory charges and treat Kenyan products on par with local goods.
The dairy sector has also been adversely affected by Tanzania’s trade measures.
Kenya plans to petition Tanzania to remove the $0.9 per liter tariff on milk and milk products, a fee that has significantly reduced Kenya’s dairy exports to Tanzania—from $20.8 million in 2015 to just $1.8 million in the previous year.
This tariff is viewed by Kenya as inconsistent with the EAC Common Market Protocol, which guarantees the free movement of goods within the community.
Efforts to harmonize these tariffs are ongoing, with the aim of ensuring fair competition and promoting regional trade.
On the other hand, Tanzania has expressed concerns over the influx of imported milk, particularly from Kenya.
Milk processors in Tanzania’s dairy industry have called on their government to implement protective measures against these imports, citing challenges such as drought, external competition, and high taxes.
They argue that the industry could generate significantly more tax revenue if shielded from excessive imports and competition.
In response, Tanzania has increased import duties on certain dairy products and has been considering additional measures to support local producers.
In an attempt to address these ongoing trade disputes, Kenya and Tanzania held a bilateral meeting in Kisumu, where they agreed to resolve at least 14 trade barriers affecting both countries.
While some issues were resolved, several, including those concerning dairy and meat product tariffs, remain pending.
The next meeting is scheduled to be held in Tanzania in July, where both nations aim to harmonize regulations and eliminate discriminatory charges to facilitate smoother trade.
