Kenya Tanzania border war impacts revenue
The diplomatic war between Kenya and Tanzania has far-reaching implications to the port of Mombasa.
Statistics from the Kenya Ports Authority (KPA) indicate that in the first seven months of 2019, 141,000 tonnes of cargo destined for northern Tanzania was imported through Mombasa port.
Besides trade in other goods, Tanzania also exports tea through the weekly auction in Mombasa.
More than 8,000 metric tonnes of Tanzanian tea is sold through the world’s second-biggest tea auction in Mombasa and traders warn that the neighbouring country risks losing foreign earnings should the stand-off over Covid-19 containment measures escalate.
Officials at KPA and the association of car importers say it is too early to tell how the tit-for-tat actions between Kenya and Tanzania will affect overall trade through Mombasa.
Coast region in particular relies on fresh produce imports from Tanzania. Traders in Coast’s largest open air markets now fear that the diplomatic tension could lead to shortage and spike in price of commodities.
No pricing mechanism
Tanzanian traders are the biggest buyers of Kenya’s coconuts and raw cashew nut and also rely on Kenya waters in the Indian ocean to satisfy their demand for fish.
“Most of the tea produced in Tanzania is sold through the Mombasa auction. Tanzania will lose out in foreign exchange if the borders are closed,” says Edward Mudibo, the managing director of East Africa Tea Trade Association, the agency that runs the tea auction in Mombasa.
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He explains that Dar es Salaam cannot afford to stop trucks that bring tea to the auction and export through Mombasa port because it has no pricing mechanism for the produce.
“If its farmers or tea agency had, say, forward contracts with the buyers then they would have fetched even better prices, but they don’t. A huge chunk of their tea is for export,” says Mr Mudibo.
According to world top exports report of 2019, tea was Tanzania’s ninth largest foreign exchange earner after gold, tobacco, coffee, coconut, cashew nuts, fish, diamond, oil seed and skin.
Other than tea, cost of transport for goods destined to northern parts of Tanzania is expected to go up due to disruptions caused by the diplomatic tension and Covid-19, according to trade analysts.
“This stand-off is not good. Countries on the northern corridor and those that use the central corridor will hold a meeting to address the issues,” says Omae Nyarandi, the chief executive officer of the Northern Corridor Transit and Transport Coordination Authority (NCTTCA).
He advises that the six NCTTCA member states and those that use the central corridor should harmonise their protocol to deal with Covid-19 to avert a rise in cost of transport and goods in the region.
The northern corridor is a multimodal trade route linking the port of Mombasa with six landlocked countries of Uganda, Rwanda, Burundi, DR Congo, and South Sudan
“The stand-off is not good at all. It will affect the economies of both countries and other nations in the region,” says Nyarani. The Kenya-Tanzania link road through Taveta launched three years ago reduces the voyage through Uganda by 358km.
Bujumbura-Mombasa-Voi-Taveta-Moshi-Arusha-Singida-Bujumbura road is 1,545km, which reduces the distance from Mombasa to Bujumbura via the Northern Corridor by 358km.
On Tuesday, Tanzanian officials banned all Kenyan trucks from crossing to Tanzania, saying most drivers test positive for coronavirus.
But the move is seen as a reaction to Kenya’s decision to make it mandatory for all truck drivers coming to the country to be tested of the virus. Kenya has, however, not closed its boarders with Tanzania or barred the movement of goods from any country. The cross border trade stand-off has sparked fears among traders at the Coast.
At the Kenya-Tanzania border in Taita-Taveta County, traders from both countries have started feeling the heat of the diplomatic stand-off.
Those affected complained that they have lost their economic livelihood and income following the closure of the border. Kenyans at the border in Taveta Sub-county mostly depend on agricultural products from Kilimanjaro in Tanzania.
“We have been getting agricultural and horticultural products from Tanzania. But after the closure of the border four days ago we are not getting cereals like maize and beans including avocados, oranges and onions among other farm products.
I have no job now,” says Mercy Mucheru, a trader at Taveta open air market. “I no longer get oranges and passion fruits from Tanzania. The closure of the border has rendered me jobless,” she adds.
Other traders say price of cereals has started to rise as they have been forced to source the same from Makueni and Kajiado counties.
“We used to buy a kilo of onions at between Sh90 and Sh140 in Taveta town but now we are buying the same from Emali town at Sh200,” says Mcharo, a trader in Wundanyi town.
The border row has also affected healthcare services as some Kenyans have been seeking specialised treatment in Holili, Moshi and Arusha in Tanzania.
But other traders interviewed yesterday say Tanzania will be the hardest hit because they get about 90 per cent of industrial products like metal from Kenya. Tanzanian traders also buy sugar, fuel, salt, soap and vegetable oil from Kenya.
They believe closure of the border will help deal with illegal cross-border trade in sugar, fuel, gemstones and Sandalwood deals at the border.
“The closure of the border has also badly affected us in one way or the other because there are products that we have to source from Kenya,” says Elena Matonza, a Tanzanian trader at Taveta border town.