TZ, Kenya in danger of trade war

Tanzania and Kenya appear to be engrossed in a trade war threatening to strangle the former’s multi-million cut flower sub-industry.

This follows a ban that Kenya imposed on Tanzania’s cut flowers on transit through Jomo Kenyatta International Airport (JKIA) to overseas markets, while on its part, it is said to have put in place harsh rules for Kenyan products entering its market.

On May 10, 2011 Kenya banned Tanzania’s cut flowers from being exported to overseas markets through Kenya over pest risks, rendering the exporters suffering in silence due to non-existence of regular cargo flights from Tanzania. More than 80 per cent of Tanzania’s horticultural export was airlifted through JKIA.

A number of flower farms in both countries have been exporting their products jointly for years with the view of winning clients in overseas markets who require a mix of different flower types.

Tanzania Horticultural Association (Taha) executive director Jacqueline Mkindi told The Citizen at the weekend that the joint arrangement also helped to reduce paper work needed in European destinations as well as cut transportation cost.

Now with the ban in place for over a year and a half, Tanzania’s cut flower export hangs in the balance as farmers desperately await a lift on Kenyan import ban, with time and money running out. According to reports, in May 2011 Kenya Plant Health Inspectorate Services (Kephis) informed the government of the ban through JKIA citing pest control issues.

The government was then obliged to conduct Pest Risk Analysis (PRA) in one of the flower farms and submit the results to the Kenyan authority, which responded in May 2012 that it was ready to lift the ban on condition that Tanzania signs a Bilateral Quarantine Agreement (BQA).
The ministry of Agriculture and Food Security acted last October by submitting a reviewed BQA requesting the Kephis to sign it but to no avail.

“Kephis has not signed the agreement to date and the Tanzania flower industry continues to suffer because of the ban,” Taha Advocacy and Policy manager Antony Chamanga told The Citizen. Ministry of Agriculture, Food Security and Cooperatives Crop Development acting director Fabian Mkondo told this paper that to date they are yet to receive feedback from their Kenyan counterparts.

This stalemate threatens the over $80 million sub-sector that employees about 6,000 workers because lucrative European deals are being terminated.

The flower sub-sector, is mainly based in Arusha and Kilimanjaro regions, where there are over 20 farms covering 200 hectares with the capacity of yielding up to 10,000 tonnes of roses annually. Most of these farms were established in the past two decades by foreign investors.

Taha Fresh Handling acting general manager Bob Kisamo said that given the conditions, they have initiated talks with Qatar and Turkish airlines to seek the possibility for the two airlines to start cargo freighting from the Kilimanjaro International Airport (JRO).

It is understood that this initiative is backed by the state through Kilimanjaro Development Company (Kadco) a firm that runs KIA and ground cargo-handling company, Swissport.

“If all goes well, this year at the earliest, we’ll have a cargo freighter to carry 40 tonnes of horticultural products once a week from KIA to overseas markets,” Mr Kisamo said.

Meanwhile, Taha is also complaining over import levy of Ksh 2 ($0.024) per kilo on fresh produce, particularly vegetables and fruits, imported from Tanzania.

“This has for a long time severely affected our farmers in terms of competitiveness and profitability,” Ms Mkindi explained.

This levy is imposed to produce that goes directly to the Kenyan market, and astonishingly, even to produce which is in transit to overseas markets through JKIA. 

Through Taha’s persistence the ministry of East African Cooperation engaged their Kenyan counterparts in September, which after a number of bilateral meetings the other side admitted that the levy constituted a non-tariff barrier and should be eliminated. 

It pledged to remove it by December 31, 2012, but until last week, there was no sign this has been implemented.

Ms Mkindi is bitter that many smallholder farmers have pulled out from production of vegetables for export to and through Kenya because of the several NTBs, which make their farming unprofitable.

On the other hand, the Kenya private sector also points an accusing finger at the Tanzanian government claiming that it has been imposing harsh NTBs whenever they attempt to access its market.

Mr Vimal Shah, the chief executive of regional edible oils manufacturer Bidco, is on record as blaming unending NTBs for the shifts in regional trade.

“Countries like Tanzania have become very harsh about what is sold within their borders, to the extent that they reject even the packaging of some goods that were earlier allowed into the market but which they now say are substandard,” said Mr Shah.

Tanzania is also accused for re-imposing a visa charge of $200-$250 on Kenyan and Ugandan business people.

Tanzania said the fee was for a pass issued to persons entering the country on temporary assignment and short-term business activities.

However, the fee had been abolished for EAC citizens.Kenya also complained that Tanzania is still insisting on the requirement that cigarettes manufactured in Kenya should have 75 per cent local tobacco extract content.
Source: The Citizen, thecitizen.co.tz, reported by Adams Ihucha in Arusha
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