Tanzanian traders cite several anti-EAC Kenyan laws

PUBLISHED ON August 28th, 2017

Tanzanian traders cite several anti-EAC Kenyan laws

Tanzanian traders are accusing the Nairobi administration of selectively applying regulations such as the Rules of Origin, thus hindering free trade between the two countries as envisioned by the East Africa Common Market Protocol.

Tanzania Private Sector Federation chair, (TPSF) Dr Reginald Mengi, said; “As neighbours, we should be creating success stories in Kenya and Tanzania, instead of competing among ourselves.” He was speaking at a traders’ forum in Dar es Salaam attended by Kenyan and Tanzanian stakeholders.

Given that the East African Community countries have agreed on specific thresholds on the Rules of Origin which could be creating challenges in respect to specific products, the meeting recommended the Community to review and revisit their application to respond to the specific business needs of the two countries.

It emerged that Kenya was still placing hurdles on Tanzanian milk companies looking to enter its market.

“When the two governments agreed to remove restrictions recently, we assumed everything had been resolved. But we have since been informed that Kenya has back tracked on some of these issues, with access to the Kenyan dairy market being the key one,” reads a submission by Tanzanian businessmen.

“Certificates of Rules of Origin issued by any EAC country should be recognised. The Milk Processors Association in Tanzania should initiate consultations with their Kenyan counterparts with a view to accessing the Kenyan market and growing trade between the two countries,” reads the meeting’s joint communique.

Roadblocks

Jennifer Bash, chief executive officer of Alaska Tanzania Industries Ltd said that Nairobi has also placed roadblocks in the registration of companies, making it difficult for Tanzanians to do business in Kenya.

“I have tried to incorporate a milling company in Kenya but it has been a legal challenge with the current law. Selling of the sifted and milled product is also an issue as we are instead encouraged to sell unprocessed grain,” said Ms Bash.

Kenya was also accused of not harmonising its road-user charges and road tolls, resulting in varying amounts charged to transporters to different regions.

“These numerous monetary charges required by the various agencies for especially export of milk and other dairy products is a hindrance to trade and we see it as an intentional barrier so that we don’t access the Kenyan market,” TPSF said in its submission.

Tanzania also complained of the various legislations in Kenya that restrict Tanzanian traders from accessing the Kenyan market in various sectors, singling out amongst others, the Public Procurement and Assets Disposal Act 2015, which has restricts and discriminates against the participation of other EAC partner states by defining a citizen contractor to mean a firm wholly owned or controlled by persons who are Kenyan citizens.

The Act also reserves 21 per cent of total score in procurement evaluation for citizen contractors, which was termed prohibitive to Tanzanians.

Kenya’s Capital Markets (Derivatives Markets) Regulations 2015, was also cited for requiring that at least 15 per cent of the paid-up share capital of a derivative exchange be held by a Kenyan entity.

“The Investment promotion act 2004 requires that applicants shall be entitled to an investment certificate, and the amount to be invested by a foreign investor is at least $100,000, yet it lumps EAC residents under the foreigner tag,” the traders said.

Source: The East African

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