Kenyan trade policies stifle Uganda’s dairy industry

UGANDA – Escalating trade tensions within the East African Community (EAC) are significantly impacting Uganda’s dairy industry despite a substantial increase in local milk production.

This comes as Kenya, Uganda’s largest EAC trade partner, has imposed protectionist measures stalling the growth of Uganda’s dairy sector, which is already grappling with an oversupply of milk.

However, during a recent state visit to Kenya from May 15 to 17, 2024, Ugandan President Museveni and Kenyan President William Ruto issued a joint communique to enhance bilateral relations.

They directed the full implementation of the EAC Customs Union Protocol and Common Market Protocol, advocating for removing quotas on intra-EAC trade goods, including dairy products. Despite this directive, the reality on the ground remains unchanged.

“The communique gave us hope for better trade relations. However, three weeks later, we still face obstacles, such as the Kenya Dairy Board denying export permits for our milk powder and UHT milk,” Benson Mwangi, General Manager of Brookside Limited, expressed his dissatisfaction.

Kenya has historically been the top importer of Uganda’s dairy products, but inconsistent trade policies have forced Uganda to explore new markets.

This challenge was exacerbated on March 6, 2023, when the Kenya Dairy Board announced a halt on milk powder imports to protect local dairy farmers from surplus production and low prices.

The move effectively reinstated a 2021 ban on Ugandan dairy products, contradicting President Ruto’s earlier directive to lift such bans.

In his State of the Nation address on June 6, 2024, President Museveni revealed that Uganda’s milk production has surged to 5.3 billion liters annually, while the domestic market only consumes 800 million liters, leaving a massive surplus.

The surplus showed the critical need for accessible international markets, which are currently being restricted by Kenya’s trade policies.

In June, recognized globally as Dairy Month, Uganda’s Dairy Development Authority (DDA) celebrated contributions throughout the dairy value chain under the theme “Dairy for Improved Household Income.”

Samson Akankiza, Executive Director of DDA, highlighted the dairy sector’s importance to Uganda’s rural economy, stressing its role in nutrition, income, and employment security.

“The dairy value chain is one of Uganda’s most dynamic sectors, pivotal for rural development. It is a priority in our agro-industrialisation agenda, Vision 2040, and the National Development Plan (NDP III),” Akankiza stated.

Despite the celebration, the ongoing trade barriers with Kenya overshadow Uganda’s dairy prospects.

President Museveni’s administration continued to advocate for stronger EAC trade relations, but dairy farmers facing an uncertain future will have better options. 

“The need for a resolution to these trade tensions is more urgent than ever, as Uganda seeks to capitalize on its growing dairy production and support its agricultural economy.”

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