KENYA – Following the signing of a memorandum in Nairobi by Presidents William Ruto of Kenya and Yoweri Museveni of Uganda last week, a section of Ugandan businesses has resumed trading with Kenya.
This agreement marks the end of longstanding issues that had stifled commercial activities between the two nations.
While the resumption of the milk trade has been welcomed, businesses remain cautious due to unresolved issues, including taxes on Kenyan juice.
Simon Kaheru, vice-chairman of the East African Business Council and chair of the Ugandan Private Sector, noted that the Nairobi meeting was instrumental in reopening trade between the two countries.
“So far, a number of our members involved in some sectors that were previously affected by the blockades have begun trading once again. We have had confirmation specifically from the dairy sectors that the situation has improved,” he said.
This comes after the Kenya Dairy Board (KDB) issued a green light for the resumption of milk powder imports from Uganda to Kenya.
The approval, announced on April 22, marked the end of almost a year since the dairy trades between the two countries were suspended due to restrictions by the Kenyan authorities on the granting of export permits to Ugandan operators.
According to KDB, the approach was made to allow local supplies of more milk as a drop in production is anticipated as dry months, July-August and December-February approach.
During the signing of the memorandum that occurred during President Museveni’s state visit to Kenya, the leaders committed to resolving trade disputes by adhering to the EAC’s protocols on the Customs Union and the Common Market.
“We should eliminate barriers which hinder trade not only between Kenya and Uganda but also in East Africa and Africa as a whole; Protectionism is not good for Uganda, Kenya, or Tanzania,” President Museveni stated.
President Ruto echoed this sentiment, declaring, “All the issues around [trading in] rice, fruit juices, sugar, furniture, eggs, chicken, and all the other issues are now resolved.”
In 2023, Uganda reached a significant milestone in its dairy industry, with milk production surpassing the 3-billion-litre mark for the first time.
According to data from the Dairy Development Authority (DDA), the country produced 3.85 billion liters of milk in the financial year 2022/23, representing a remarkable 37% increase compared to the 2.81 billion liters produced in the previous financial year.
On the other hand, Kenya emerged as the primary destination for Uganda’s dairy exports, representing the greatest portion of the country’s trade in dairy and related products.
According to the report, for the period ending June 2023, Kenya accounted for over two-thirds, representing 80% of Uganda’s dairy exports.
The DDA’s 2022/23 Annual Report revealed that Uganda exported dairy and related products valued at Kes 976.3 billion during the period, with 83% of this total, amounting to Kes 810.5 billion, going to Kenya.
Among the exported products were butter, cheese, ghee, UHT milk, yogurt, and milk powder, reflecting the diversity of Uganda’s dairy exports to its East African neighbor and one of its largest trading partners.
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