Warming Relations Between Kenya and Tanzania
Kenya and Tanzania have both in the recent past taken unilateral action hindering the movement of goods and/or people across their shared borders. However, the relationship between the two powers appears to be on an incline following Tanzanian President Samia Suluhu Hassan’s two-day state visit to Kenya earlier this month (4-6 May).
Significance – Boost for Infrastructure and Trade
Kenya and Tanzania are the two largest economies in the East African Community (EAC). Together, they account for over three quarters of the regional market. Furthermore, as stated by President Suluhu, Kenyan investment in Tanzania is now worth USD 1.7 billion and provides 51,000 jobs. The need for cordial relations between the two countries is clear and significant.
Despite this, bilateral trade fell from a high of around USD 1.1 billion in 2014 to only USD 493 million in 2017[1] on the back of trade disputes centring on non-tariff barriers, a lack of efficiency at border posts and failure to extend preferential treatment. Petty traders moving food items including meat, dairy products and vegetables have been hardest hit by the reduced trade flows and therefore stand to gain a lot from any détente. However, there are larger ticket items on the table as well.
The most significant announcement from the meeting was the signing of an MoU on Cooperation in Natural Gas Transportation which primarily covers the construction of a 600km, USD1.1 billion natural gas pipeline between the port cities of Mombasa and Dar es Salaam. The plan has been in existence for over a decade but was shelved during a difficult period between Nairobi and Dodoma. The not yet formalised intention, expressed at the meeting, is to work on further infrastructure projects including road and rail links.
Another development of note was a re-statement of Kenya’s intention to waive the requirement for work permits or business visas for those coming from Tanzania the de jure process of obtaining a work permit is complex and expensive, costing up to USD3,000 to register with a USD2,000 annual renewal fee[2]. To further ease cross-border trade, the countries will constitute a joint team of experts to examine why protocols (particularly those relating to Covid-19 protocols) are being so sporadically enforced[3].
Outlook – Cooperative competition can help support AfCFTA
Further cooperation will be needed, as will the spirit of friendly competition. Both Mombasa and Dar es Salaam ports (as well as the about-to-be-launched port at Lamu) compete for trade for the inland eastern African countries including Ethiopia, Uganda and parts of the Democratic Republic of Congo and Sudan. Political will on both sides will also need to be expended to quicken the pace of reform of necessary implementing agencies such as customs, port health and revenue collectors. The pace of rekindling the relationship may be slower than many (especially cross-border traders) had hoped for but the progress being made is significant. The ambition for moving towards a more efficient and cooperative partnership is clear on both sides and is also a positive step towards the regional and continental integration that is needed to make a success of the African Continental Free Trade Agreement (AfCFTA).
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[1] World Bank figures
[2] Depending on the specific category.
[3] Tanzania’s former president John Magafuli was notorious in his downplaying of the impact of Covid-19 so did not react well to Kenya requiring all truckers entering from Tanzania to have a negative Covid-19 test. Following his initial reluctance to implement testing procedures at border posts, the borders were closed for a week in May 2020 leading to a 40% drop in traffic at one crossing and delays of up to 5 days at others.
*image credit: Qim Manifester
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