Joseph Isangura
Tanzania’s decision to impose fresh levies on Kenyan products, including eggs, dairy, meat, and confectionery, has raised concerns in Kenya, with traders fearing a potential setback in cross-border commerce.
The move, which Kenyan officials argue contradicts the principles of the East African Community (EAC) Customs Union, threatens to strain economic ties between the two neighboring countries.
For years, Kenya and Tanzania have had a complex trade relationship, often marked by disputes over tariffs and market access. While recent months had shown signs of improvement, the new levies risk reigniting tensions, with Kenyan manufacturers already reporting a decline in export earnings.
According to industry figures, Kenya’s exports to Tanzania suffered a Ksh4.2 billion drop last year—the first decline in eight years, excluding the pandemic-induced economic downturn of 2020. Many manufacturers blame Tanzania’s new taxation measures, which have made Kenyan goods more expensive in the neighboring market.
The latest charges include a sugar levy of Tsh1,000 (approximately Ksh50) per kilogram on Kenyan-made confectionery, including biscuits, chocolates, and sweets—an expense not applied to similar Tanzanian products. Dairy items such as yogurt, cheese, butter, and ice cream also face a levy of Tsh1,000 per kilogram or liter, significantly higher than the Tsh50 imposed on Tanzanian alternatives. Additionally, a 25% excise duty has been placed on Kenyan hatching eggs exported to Tanzania.
Tanzania’s government maintains that these measures are part of its broader strategy to boost local industries by reducing dependency on imports. However, Kenyan officials and business leaders argue that such levies undermine the spirit of the EAC Customs Union, which aims to promote free trade within the region by eliminating internal trade barriers.
Signed in 2005, the EAC Customs Union Protocol ensures the free movement of goods, services, capital, and labor among its seven member states.
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Under this agreement, partner countries are expected to maintain a common external tariff on imports while facilitating unrestricted trade within the region.
Despite Kenya’s concerns, Tanzania has remained firm in its stance, emphasizing its right to enforce policies that protect its local industries. As both nations navigate these trade tensions, business leaders and policymakers hope for constructive dialogue to prevent further disruptions in regional trade and cooperation.
For now, Kenyan exporters face a tough choice either absorb the extra costs or pass them on to consumers, potentially making their products less competitive in the Tanzanian market. The coming months will determine whether the two countries can find a middle ground or if the trade standoff will escalate further.
