Sh65 billion trade at stake in neighbours tiff

Wednesday, May 20th, 2020 00:00 |
Truck drivers stranded at the Namanga border point recently after Kenya closed its borders with Tanzania. Photo/PD/Christine Musa

The current Kenya-Tanzania tiff over closure of borders is set to disrupt an annual bilateral trade worth Sh65 billion.

As the border row between the two countries ensues, local consumers are set to fork out more cash to buy food since Kenya imports more agricultural produce from her neighbour.

Meanwhile, Tanzania imports more processed goods from Kenya. The imports have already taken a hit as consumers halt expenditure on non-essential goods in the wake of Covid-19 pandemic. 

On this tiff, experts expect Kenya to be the first to blink if it is to salvage the market. Last year alone, Kenya exported goods worth Sh33.7 billion to Tanzania, making it one of the country’s biggest trading partners in East and Central Africa, while Tanzanian imports in the country stood at  Sh27.6 billion.

The value of exports to Tanzania, increased by 13.0 per cent per cent showing an upward trajectory as relations between the two states improved.

Kenya imports vegetables, oil seeds, rice, wheat, textiles and clothing, hides and skin, paper and paperboard, footwear, wood, plastic and rubber and other products from Tanzania.

Tanzania is the fourth largest seller of goods to Kenya behind South Africa (Sh53.094 billion), Egypt (Sh28.868 billion) and Uganda (Sh27.490 billion).

Experts have for long argued that Tanzania feels that Kenya is benefiting more from trade partnerships hence the strained relations.

In September 2014, Tanzania was the largest export destination of Kenyan goods within East Africa.

Kenya’s total exports to Tanzania in 2011 were valued at Sh50 billion as compared to Sh39 billion in 2010. 

Kenya’s imports from Tanzania were valued at Sh18.5 billion in 2011, an increase from Sh12.6 in 2010.

In the years between 2007 and 2008, Tanzanian exports to Kenya increased by 17 per cent. 

The balance of trade still favours Kenya. In terms of Foreign Direct Investment (FDI), Kenyan firms have operations in Tanzania. 

Some of which are Kenya Airways, Kenya Commercial Bank (Tanzania), Equity Bank (Tanzania) as well as manufacturing firms.

In 2009 Kenyan investment was estimated at over Sh200 billion (US$2 billion) making Kenya the second largest FDI contributors in Tanzania.

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