After years of banning sugar imports from Uganda, Tanzania announced that it will partially allow trade with its East African neighbor as long as the deals are between the two governments and not between private companies.
The highly anticipated agreement was signed on February 27, 2020 at the State House in Entebbe, Uganda, in the presence of representatives of the two countries:
Tanzania has partly allowed to open up its borders to Ugandan sugar exports following more than a year of being locked out. The sugar will be traded under a new arrangement that will only involve government-to-government
– Radical Entrepreneur (@IkoteBrian) March 6, 2020
Tanzania has allowed its borders to be partially opened to export sugar from Uganda after more than a year of blockade. Sugar will be marketed under an agreement that will only involve (negotiations) Government to Government.
The deal should cheer Tanzanians after nearly four years of sugar shortages in the country. In 2016, Tanzanian President John Magufuli insisted that sugar traders must acquire permits to control growing problems like poor quality, smuggling and corruption in the sugar trade, according to the BBC.
The Tanzanian authorities reported that sugar imported from Uganda was not grown there, but was imported from Kenya and packaged in Uganda.
The Magufuli administration imposed 25% tax on sugar imported from Uganda, according to The Citizen. In 2018, Tanzania stopped issuing permits, basically banning sugar imports from Uganda, according to the East African country.
Mixed in countless cups of chai and coffee daily, sugar is an essential element in East Africa. These restrictions on Tanzania's imports of sugar from Uganda increased the price of sugar and, in some cases, triggered a buildup among local producers, according to BBC Sammy Awami.
In 2018, The Citizen reported that a 50 kilogram bag of sugar cost 65,000 Tanzanian shillings ($ 30) in the semi-autonomous islands of Zanzibar and 120,000 Tanzanian shillings ($ 60) in mainland Tanzania.
However, in the spirit of East African unity, the Tanzanian authorities went to Uganda and started a two-day tour on March 1, 2020 to inspect the production processes of various sugar factories, such as Kakira Sugar Works and Kinyara Sugar Corporation of Uganda Limited.
– ELIJAH TURYAGUMANAWE 🇺🇬 (@elijahturya) March 1, 2020
Negotiations of the terms and conditions of the sugar trade between Uganda and Tanzania after the ongoing production inspection.
– ELIJAH TURYAGUMANAWE 🇺🇬 (@elijahturya) March 1, 2020
Inspection of sugar production to verify production capacity and originality by the Minister of Commerce, Amelia Kyambadde, and the Minister of Agriculture of Tanzania, the Honorable Japheth Hasunga.
After a successful tour, Japheth Hasunga, Tanzania's agriculture minister, said the government-to-government sugar trade deal will start soon, according to the Ugandan newspaper Daily Monitor:
We are satisfied with the current rate of Uganda’s sugar production and we shall start with 30,000 metric tonnes, but that will depend on the prices, we don’t know how much the factories will charge and then we shall place another order. We shall start business as soon as possible.
We are satisfied with Uganda's current rate of sugar production and will start with 30,000 metric tons. However, it will depend on the prices. We don't know how much factories will charge us, and then we will make another order. We will start the business as soon as possible.
This agreement will strengthen the integration of East Africa as Tanzania begins to import more sugar from Uganda, and to other more distant places, such as Brazil. Uganda has been designated as “surplus sugar” as it mainly exports its sugar to the Democratic Republic of the Congo, South Sudan and Zambia.
Minister Hasunga confirmed a continuing deficit in sugar production in Tanzania, with more demand than supply. “The annual production capacity stands at 300,000 metric tons per year, which leaves the country with a deficit of 90,000 metric tons,” reported The Daily Monitor.
With this new agreement, there will be no import tax as stated in the Common Market Protocol of the East African Community.
East African Community: Bittersweet?
While some praise the latest effort between Tanzania and Uganda to revive the sugar trade between the two neighbors, the deal raises questions among netizens about the effectiveness of the East African Community (EAC), a regional intergovernmental organization made up of six East African countries. : Tanzania, Uganda, Kenya, Rwanda, Burundi and South Sudan.
Netizens identified what appears to be two schools of opinion on the CAO:
There seems to be 2 competing schools of thought about the EAC .. the first as exemplified by @ pvl1111 regards it as an artificial unsustainable donor driven boondoggle and the second exemplified by @ cobbo3 regards it as a transformational socioeconomic project: who’s right? 😂
– Frantz Fanon (@waweru) March 1, 2020
It seems that there are two schools of opinion about CAO that contradict each other … the first, exemplified by Pavel, considers him as an artificial and unsustainable donor that leads to waste and the second, led by journalist Charles Onyango-Obbo, who sees him as a transformative socio-economic project: which is the correct one?
Established 20 years ago, the CAO is made up of 177 million people with a combined gross domestic product of $ 193 billion per year. Guided by an initial treaty signed in 1999, the CAO aims to strengthen interregional cooperation and a political, economic and social line as one of the “fastest growing economic blocs”, according to its website.
One of the main characteristics of the EAC is the common market established in 2020 to facilitate trade between the six countries. The common market guidelines do not recommend any import tax on goods and services to further boost trade.
However, this internet user described the CAO as a “mirage” and named some examples, beyond the sugar wars, in which cooperation and agreement between the CAO countries faltered:
Kenya and Uganda have been each other's important trade partners even before the EAC. Tanzania has blocked Ugandan goods as well (timber, milk products, sugar). So really the whole EAC thing is a mirage at the moment
– Dicta Asiimwe (@AsiimweDicta) March 1, 2020
Uganda is one of Kenya's trading partners after the European Union.
Work in progress.
Kenya and Uganda have been the most important trading partners even before the CAO. Tanzania has also blocked Uganda's goods (wood, dairy products, sugar). So really, all the CAO stuff right now is a mirage.
Another netizen pointed to the current “milk war” between Uganda and Kenya, and wonders if the CAO is afraid of a “rising” Uganda:
Uganda-Kenya milk war boils over with no end in sight of regional trade tiffs. Is East Africa becoming afraid of “rising” Uganda? 1 / 5https: //t.co/vPkeqpgEBX
– Charles Onyango-Obbo (@ cobbo3) January 20, 2020
Milk war between Uganda and Kenya heats up with no end in sight in regional trade fights.
The milky war between Uganda-Kenya heats up endlessly in light of regional trade feuds. Is East Africa afraid of a “rising” Uganda? 1 / 5https: //t.co/vPkeqpgEBX
The growing trade dispute arose when Kenya accused Uganda of importing milk that did not meet quality standards and blocked its entry, causing significant financial losses for Uganda dairy companies.
Relations between Uganda and Rwanda have also deteriorated in recent months after Rwanda's borders with Uganda and trade with Uganda closed, according to the World Politics Review, a move that resulted in losses of millions of dollars.
These CAO trade disputes point to broader issues between the CAO community and “major gaps in regional integration,” according to East Africa.
It remains to be seen whether the Tanzania-Uganda sugar deal will sweeten growing bitterness within the EAC.