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Tanzania blocks Kenya’s confectionery despite on-going trade talks

The Kenya-TZ border crossing point

NAIROBI, Kenya, Apr 26 – The Kenya Association of Manufacturers is protesting the refusal by Tanzanian Authorities to allow Kenyan goods from accessing the Tanzanian market.

Tanzania is demanding a 25 percent tariff on confectionary, Cerelac, juice, ice cream and chewing gum despite an East African Community agreement that grants free access to products that meet the EAC origin criteria.

Tanzania cites EAC Legal Notice number EAC/70/2017- where Kenya was granted duty remission on raw sugar, at a duty rate of zero percent for one year to manufacture sugar for industrial use – as justification for its actions.

“However, these actions would only be permissible if the product being exported to Tanzania is industrial sugar made from the raw sugar under remission. This is not the case,” reads a statement from KAM.

The denial of entry for Kenyan goods into Tanzania continues despite Kenya Revenue Authority’s intervention to clarify the matter to its Tanzanian counterpart.

KAM says KRA has provided detailed information with evidence that manufacturers of the affected products, import industrial sugar as well as providing sample paid entries that demonstrate that companies producing these goods have been subjected to the 10 percent duty as they fall under EAC duty remission scheme.

The latest trade restriction comes amidst high-level talks between Kenyan and Tanzanian authorities to remove tariff and the non-tariff barrier which has seen Tanzania impound and block goods from Kenya.

KAM says the continued disruptions have reduced trade business between the two countries leading to lack of goods and loss to businesses.

Tanzania is Kenya’s second most important market in the East African region. Kenya’s exports to Tanzania grew to Sh16.9 billion in 2004 to Sh42.7 in 2014 before declining to Sh33.7 billion in 2015.

Imports from Tanzania grew from Sh2.1 billion to Kshs. 18.4 billion in 2014 and declined to Sh16.9 billion in 2015. Kenya is also the second leading African investor in Tanzania, with total investment outlay of USD. $1.54 billion, with over 455 projects and employing over 50, 000 people.

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