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Tanzanian’s Soften borders helps Kenya Economy

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A year after President Samia Suluhu assumed office, Tanzania’s softened borders with Kenya, reduced non-tariff obstacles, and solutions to bilateral disputes have resulted in commercial growth in both countries.

Tanzanian exports to Kenya increased in ten months, according to the Kenya National Bureau of Statistics Economic Survey 2022. PBeforePresident Samia’s appointment, the two nations had several commercial disagreements, with Dar es Salaam turning inward and imposing trade restrictions on Kenya.

Despite the pandemic, the survey showed that Kenya imported more commodities from Tanzania in the past year than it had previously.

According to the research, Kenya’s GDP increased at a pace of 7.5 percent, the highest since 2010, and more than 20 times the rate of 0.3 percent seen during the Covid-19 outbreak in 2020.

President Samia and her Kenyan counterpart, Uhuru Kenyatta, agreed on a set of goals in May of last year, including the removal of more than 14 non-tariff barriers in six months. The leaders assured business lobbies in Nairobi at the time that they wanted to enhance commerce.

“We can only achieve true progress if we develop together,” President Samia addressed a gathering of business leaders at the Serena Hotel. “Business to business relationships allow organizations to capitalize on shared interests and build mutually beneficial partnerships.” Such collaborations generate jobs, which improve our people’s economic well-being.”

According to a report released on Thursday, Tanzania’s exports to Kenya reached new highs since independence.

According to the research, Uganda remains Kenya’s most important export market in the area.

Kenya’s agriculture sector shrank during the epidemic lockdown, creating a market for Tanzania’s surplus produce to be marketed in Kenya.

President Kenyatta authorized the country’s agriculture officials to enable the importation of Tanzanian maize that had previously been denied admission after President Samia’s visit last year. He also ordered the harmonization of work permits and the relaxation of the regulation on business visas for traders.

Concerned ministers must travel to Taita Taveta and Namanga to address traffic jams at the borders so that trucks can continue to transport commodities between the two nations. After the meeting, President Kenyatta directed that those with Covid-19 health clearance certificates from Tanzania be permitted to enter Kenya and vice versa.

Kenya required the supplies. According to the KNBS study, total maize production fell from 42.1 million bags in 2020 to 36.7 million bags in 2021. During the same period, coffee production fell from 36,900 to 34,500 tonnes. Officials blamed the weather and Covid-19 containment measures for the drop in tea sales. About 920,000 jobs were created, down 6% from the previous year. 753,000 of the employment were unclassified, implying insecurity or perhaps irregular compensation.

Tanzanian businessmen were able to supply the Kenyan market thanks to a gap in agriculture and improved border relations.

“Kenya’s imports from Tanzania nearly doubled from Ksh27.9 billion ($242.6 million) in 2020 to Ksh54.5 billion ($473.9 million) in 2021, according to a report released by Kenya’s Treasury Cabinet Secretary Ukur Yatani on Thursday. “This is partly due to an increase in maize and rice imports from this country,” the report states.

“Similarly, Kenya’s exports to Tanzania and the Democratic Republic of the Congo increased significantly from Ksh31.8 billion ($276.5 million) and Ksh14.3 billion ($124.3 million) in 2020 to Ksh45.6 billion ($396.5 million) and Ksh24.4 billion ($212.2 million) in 2021.

The increase was attributed to an increase in local tea, cut flowers, and coffee exports to the Democratic Republic of Congo, as well as soap shipments to Tanzania.

Despite trade issues, Uganda remained Kenya’s most important export market, according to the report.

“The value of Ugandan exports increased from Ksh72.2 billion ($627.8 million) in 2020 to Ksh91.7 billion ($797.4 million) in 2021, largely due to increased domestic exports of cement clinkers, palm oil, flat-rolled iron, and non-alloy steel, and re-exports of machines tools for drilling, boring sinking, milling, threading, or taping,” according to the report.

“As a result, Uganda remained the country’s most important export destination, accounting for 12.3% of total export revenues.

According to the report, “increasing demand for sugar and milk led to greater import expenditures from Uganda.”

Exports to South Sudan fell 26% to Ksh17.1 billion ($148.7 million) during the same period, resulting in a decrease in local food supplement exports and re-export of dried leguminous vegetables.

Kenya’s total exports to Africa were Ksh309.3 billion ($2.69 billion) in 2017, up from Ksh246.1 billion ($2.14 billion) in 2022, and accounted for the majority of the country’s exports.

The increase was mostly due to a 26.9% increase in shipments to Uganda and a 43.1 percent increase in Tanzania.

Exports to the East African Economic Community increased from Ksh158.3 billion ($1.38 billion) to Ksh192.4 billion ($1.67 billion), accounting for 54 percent of all exports to the African continent, according to Mr . Yatani.

From Ksh185.3 billion ($1.61 billion) in 2020 to Ksh230.8 billion ($2.01 billion) in 2021, imports from Africa increased.

Imports from the East African Community (EAC) accounted for 40.1 percent of overall imports from Africa in 2016, and are expected to increase by 64.5 percent to Ksh92.5 billion (804.3 million) in 2021.

The Comesa region’s export revenues in 2021 were Ksh124.8 billion ($1.08 billion), up 23.2 percent from the previous year.

The Trade Weighted Index climbed by 5.4 percent from 115.37 in 2020 to 121.60 in 2021, indicating that the Kenya shilling declined versus the currencies of key trading countries in 2021.

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