Kenya-Uganda trade becomes unfriendly as Kenya strengthens trade with other East African Nations

Data from the Central Bank of Kenya shows that its trade with Uganda has dipped in the last six months, while its trade with other nations in the region has skyrocketed.

Kenya’s trade with Uganda dipped by 8.5, Ksh46.77 billion ($386.3 million) from the start of the year till June. Surprisingly, the gap this dip created allowed Kenya to exceed its market penetration in other EAC countries including Tanzania, Rwanda, and South Sudan.

Kenya’s exports to Tanzania grew by 46% to Ksh28.66 billion ($236.7 million) prompting the establishment of good trade relations between both countries amid the ongoing elimination of non-tariff barriers.

Kenya’s exports to Rwanda jumped by a record 39% in the period under review, reaching Ksh19.28 billion ($159.2 million), while Kenya’s exports to South Sudan were up by 34.11% to Ksh 13.73 billion ($113.4 million) within the same period.

However, Kenya’s trade value with Uganda tells a different story. Trade disputes between both nations over products like sugar, eggs, and milk, have caused their relationship to sour and in effect dip. A good example is Uganda accusing Kenya of sparking a fresh trade row by reintroducing a levy on eggs from the neighboring country.

Uganda expressed its displeasure with Kenya taxing its eggs at a rate of Ksh72 ($0.59) a tray, reintroducing a levy that had been non-existent since late last year.

Both countries are also yet to untangle their long-standing dispute on milk after Kenya barred Uganda’s dairy products in 2019.

For the past two years, Kenya has restricted exports of poultry and dairy products from Uganda. This issue was partly resolved after Uganda threatened to ban Nairobi from exporting its goods to the landlocked neighbor.

In 2020, Kenya barred sugar from Uganda and sugarcane, causing traders to lose billions as the products intended for export were left to rot in trucks at the nation’s border.