Kenya’s new tax on Ugandan eggs sets the stage for another trade war

By GERALD ANDAE

Kenya and Uganda are staring at another round of trade wars after Nairobi reinstated a levy on eggs imported from the neighboring country.

Uganda says Kenya is now taxing its eggs at a rate of Ksh72 ($0.6) per tray, bringing back a levy that was suspended last December following bilateral talks between Kampala and Nairobi.

Ugandan traders have protested the move, saying it does not bode well for trade between the two countries.

“Kenya’s imposition of levies on Ugandan eggs is bad policy and goes against the East African Community’s policy of free movement of goods and services from member states,” Godfrey Oundo Ogwabe, the chair of Uganda National Cross-Border Trade, said daily monitor.

Read: OBBO: Why Ugandan chicken is causing trouble in Kenyan markets

Kenya’s Livestock PS Harry Kimtai said the fees could be a normal levy levied on imports.

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“I don’t have any specific information about the tax, but this could be the normal levy that the Kenyan tax authority levies on imports,” he said.

The new trade dispute comes at a time when the two countries have yet to settle a long-running dairy row after Kenya banned Uganda’s dairy products in 2019.

Kenya has restricted exports of poultry and dairy products from Uganda for the past two years, straining relations between the two countries. The poultry problem was solved after Uganda threatened to ban Nairobi from exporting its goods to its landlocked neighbor.

Uganda’s cabinet in November ordered its agriculture ministry to identify and list Kenyan products that Kampala will ban “soon” in retaliation for Kenya’s continued restrictions on its agricultural products.

Read: Kaheru: The trade war between Uganda and Kenya is misguided protectionism

The top agricultural exports from Kenya to Uganda include palm oil valued at Ksh 7.2 billion (US$61.5 million) in 2020, sorghum (Ksh 1.4 billion or US$12 million), vegetables (Ksh 311 million Ksh or $2.6 million) and legumes (Ksh 200 million or $1.7 million). .

Kenya and Uganda have long had trade wars, but recent hostilities between the two East African Community states began in December 2019, when Kenya stopped importing Ugandan milk, particularly the Lato brand.

In 2020, Kenya blocked Ugandan sugar and cane, costing traders who exported raw cane to sugar mills billions of shillings as the raw material had to rot on trucks at the border.

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$1 = Ksh117

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