News / Africa

Tanzania, Kenya Compete for Trade with Landlocked Neighbors

A crane arranges containers at the Port of Zanzibar on the island of Zanzibar, July 19, 2012.
A crane arranges containers at the Port of Zanzibar on the island of Zanzibar, July 19, 2012.
— Tanzania is giving Kenya stiff competition in building trade with their landlocked East African neighbors, as business people in the region complain about deficiencies with Kenya’s port at Mombasa.  The effort by Tanzania has prompted Kenya’s newly elected president to move quickly in response. 

Access to the ocean gives Kenya and Tanzania a big trade advantage over their neighbors Uganda, Rwanda, Burundi, Zambia, and the eastern Democratic Republic of Congo (DRC), which all have to transit goods through the Indian Ocean ports of Mombasa, Kenya and Dar es Salaam, Tanzania.

Importers in landlocked countries like Uganda and Rwanda have openly spoken about their frustration with the ports and the high cost of transporting goods across regional borders.

According to a new report published by the World Bank, Tanzania and Kenya could boost their annual gross domestic product by up to $1.8 billion and $830 million respectively by taking measures to improve the efficiency of the ports.

In recent months Tanzania has worked especially hard to improve its game in the competition for the regional import market.

Everest Kayondo, head of Kampala City Traders Association, said Tanzania is offering enticing incentives to Ugandan businesses, including tax breaks for goods transported by road.

“It [Tanzania] has come up with some attractive measures like not asking bonds for our goods if they are ferried by train, so they are saying it will do it as if it’s a domestic cargo,” said Kayondo.

However, Weru Macharia, an independent foreign relations analyst in Nairobi, said the Tanzanian tax incentives will be useless if the country does not improve its road system.

“So I think it’s a good move from Tanzania and its going to be advantageous to the Ugandan businessmen but I think Kenya may also follow the same route,  So it depends now on how or who is going to be much more attractive because if you levy the taxes of the day then you also have to have proper and good infrastructure,” said Macharia.

Road construction

In an effort to encourage businesses in landlocked countries to use roads to transport their goods to the sea, the Tanzanian government has finished constructing a new road from Dar es Salaam on the coast to Mutukula on the border with Uganda.

Kenya's President Uhuru Kenyatta prepares to inspect a guard of honor in Nairobi, April 16, 2013.Kenya's President Uhuru Kenyatta prepares to inspect a guard of honor in Nairobi, April 16, 2013.
x
Kenya's President Uhuru Kenyatta prepares to inspect a guard of honor in Nairobi, April 16, 2013.
Kenya's President Uhuru Kenyatta prepares to inspect a guard of honor in Nairobi, April 16, 2013.
Last month, newly-elected Kenyan President Uhuru Kenyatta reacted by visiting Uganda and Burundi to convince their leaders his country is also ready to improve its port and make other offers to encourage trade.

Everest Kayondo of the Kampala City Traders said each country will act in its own self-interest.

“Kenya, they will accept a policy as long as it favors them but the moment it’s not conducive to their business community they will sort of block it,” said Kayondo.

Analyst Weru Macharia argues Kenya is behaving that way because it feels it has leverage, but with Tanzania coming on strongly things might change.

“The complaints may be valid, but you don’t expect any country to be humanitarian in terms of trade and commerce.  So its upon them to see Tanzania coming in and there may be more at stake for Kenya, which might probably be more flexible in terms of dealing with Ugandan businessmen,” said Macharia.

In May, the World Trade Organization (WTO) director-general, on his visit to the region, said East African governments must improve their roads, ports and trade procedures if the region is to reach its full economic potential.

You May Like

Lebanese Media Unite to Support Palestinians in Gaza

Joint newscast billed as Arab world’s first unified news bulletin in support of Hamas-controlled Gaza Strip More

Photogallery Australian PM Alleges ‘Coverup’ at MH17 Crash Site

Meanwhile, Russia's ambassador to Malaysia denies plane's black boxes were opened before they were handed over to Malaysian officials More

Despite Advances in AIDS Treatment, Stigma Lingers

Leading immunologist tells VOA that stigma is often what prevents those infected with disease from seeking treatment More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
IAEA: Iran Turns its Enriched Uranium Into Less Harmful Formi
X
July 22, 2014 10:26 AM
Iran has converted its stockpiles of enriched uranium into a less dangerous form that is more difficult to use for nuclear weapons, according to the United Nations’ Atomic Energy Agency. The move complies with an interim deal reached with Western powers on Iran's nuclear program last year, in exchange for easing of sanctions. Henry Ridgwell reports for VOA from London.
Video

Video IAEA: Iran Turns its Enriched Uranium Into Less Harmful Form

Iran has converted its stockpiles of enriched uranium into a less dangerous form that is more difficult to use for nuclear weapons, according to the United Nations’ Atomic Energy Agency. The move complies with an interim deal reached with Western powers on Iran's nuclear program last year, in exchange for easing of sanctions. Henry Ridgwell reports for VOA from London.
Video

Video Relic of Saint Draws Catholics Worried About Immigration Issue

A Roman Catholic saint who is a figure of devotion for those crossing the border into the United States is attracting believers concerned about the plight of undocumented immigrants. Mike O'Sullivan reports from Los Angeles, where a relic of Saint Toribio has drawn thousands to local churches.
Video

Video Ukraine Rebels Surrender MH17 Black Boxes

After days of negotiations, a senior separatist leader handed over two black boxes from an airliner downed over eastern Ukraine to Malaysian experts early Tuesday. While on Monday, the U.N. Security Council unanimously demanded that armed groups controlling the crash site allow safe and unrestricted access to the wreckage.
Video

Video In Cambodia, HIV Diagnosis Brings Deadly Shame

Although HIV/AIDS is now a treatable condition, a positive diagnosis is still a life altering experience. In Cambodia, people living with HIV are often disowned by friends, family and the community. This humiliation can be unbearable. We bring you one Cambodian woman’s struggle to overcome a life tragedy and her own HIV positive diagnosis.
Video

Video Nature of Space Exploration Enters New Age

Forty-five years ago this month, the first humans walked on the moon. It was during an era of the space race between the United States and the Soviet Union. World politics have changed since then and -- as Elizabeth Lee reports -- so has the nature of space exploration.
Video

Video Chicago’s Argonne Lab Developing Battery of the Future

In 2012, the U.S. Department of Energy’s Office of Science awarded a $120 million grant to a new technology center focused on battery development - headquartered at Argonne National Laboratory in suburban Chicago, Illinois. As VOA’s Kane Farabaugh reports, there scientists are making the next technological breakthroughs in energy storage.
Video

Video In NW Pakistan, Army Offensive Causes Massive Number of Displaced

Pakistan’s army offensive in North Waziristan has resulted in the large-scale displacement of the local population. VOA's Ayaz Gul reports from northwest Pakistan where authorities say around 80 percent of the estimated 1 million internally displaced persons [IDPs] have settled in Bannu district, while much of the remaining 20 percent are scattered in nearby cities.
Video

Video Kurdish Peshmerga Force Secures Kirkuk, Its Oil

The Kurdistan regional government has sent its Peshmerga troops into the adjacent province of Kirkuk to drive out insurgents, and to secure the area's rich oil fields. By doing this, the regional government has added a fourth province to the three it officially controls. The oil also provides revenue that could make an independent Kurdistan economically strong. VOA’s Jeffrey Young went out with the Peshmerga and filed this report.
Video

Video Malaysia Reeling: Second Air Disaster in Four Months

Malaysia is reeling from the second air disaster in four months involving the country’s flag carrier. Flight 340 vanished in March and despite an extensive search, no debris has been found. And on Thursday, Flight 17, likely hit by a surface-to-air missile, came apart over eastern Ukraine. The two incidents together have left more than 500 people dead. VOA Correspondent Steve Herman reports from Kuala Lumpur.

AppleAndroid