Kenya has imposed a steeper inspection fee on Tanzanian wheat imports, threatening to escalate the trade war between the two neighbours.
The government has increased the cost of wheat inspection at the border from Sh600 per truck to Sh8,000, a move that would technically lock out the commodity.
The two East African countries have been at loggerheads over wheat trade with Tanzania citing Kenya at the East African Secretariat early this year for blocking it from exporting the commodity to the local market.
In a meeting held between the two countries on September 2 in Dar-es-Salaam, millers pointed out that Kenya Health Inspectorate Service (Kephis) had raised the inspection fee drastically, making Tanzanian wheat uncompetitive in the local market.
“Millers informed the session that immediately after the Namanga meeting held on August 3, which cleared wheat flour (imports), the Kenyan government increased the inspection fee from Sh600 to Sh8,000,” reads the communique from the meeting.
Millers said the move had increased the cost of doing business for Tanzanian traders who export their wheat products to Kenya.
Kenya, which was represented at the talks by Trade principal secretary Chris Kiptoo, said the revised fees by Kephis apply to all imported agricultural products. However, the issue will be considered for review in the near future.
In April, the Council of Ministers from EAC said Kenya had ignored guidelines issued by the secretariat allowing wheat products from Tanzania to enter the country duty-free under the EAC common tariff.
Kenya and Tanzania do not produce sufficient wheat and rely on imports to meet demand.
Kenya is a net importer of wheat, bringing in two-thirds of the annual consumption of 900,000 tonnes against local production of 350,000 tonnes.
Tanzania has been Kenya’s second largest market in the region after Uganda, providing a range of products including palm oil, soap, medicine, cooking fats, iron sheets, sugar confectionery, and margarine.
Kenya’s exports to Tanzania dropped 34 per cent in the first five months of the year to Sh4.35 billion, raising concern over the impact of the long running trade standoff.
Credit: Business Daily