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

Video On the Scene: In Gaza, Darkness Brings Dread and Death

Palestinians fear nighttime raids, many feel abandoned by outside world, VOA's Scott Bobb reports More

African Small Farmers Could Be Key to Ending Food Insecurity

Experts say providing access to microloans, crop insurance, better storage facilities, irrigation, road systems and market information could enable greater production More

University of Michigan Wins Solar Car Race

Squad guided its student-designed solar-powered vehicle to fifth consecutive time victory in eight-day bi-annual American Solar Challenge More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Vietnamese Staging Chinese Product Boycott After Oil Rig Spati
X
Reasey Poch
July 28, 2014 7:18 PM
China recently pulled an oil rig from an area of the disputed South China Sea that Vietnam also claims. Despite the action, the incident has had a lingering effect on consumers in Vietnam. VOA's Reasey Poch reports from Hanoi on an effort to boycott Chinese products.
Video

Video Vietnamese Staging Chinese Product Boycott After Oil Rig Spat

China recently pulled an oil rig from an area of the disputed South China Sea that Vietnam also claims. Despite the action, the incident has had a lingering effect on consumers in Vietnam. VOA's Reasey Poch reports from Hanoi on an effort to boycott Chinese products.
Video

Video ESA Spacecraft to Land on a Comet

After a long flight through deep space, a European Space Agency probe is finally approaching its target -- a comet millions of kilometers away from earth. Scientists say the mission may lead to some startling discoveries about the origins of the water on earth. VOA’s George Putic has more.
Video

Video Young Africans Arrive in US for Leadership Program

President Barack Obama's Young African Leadership Initiative has brought hundreds of young Africans to the United States for a six-week program aimed at building their knowledge and skills in fields such as public administration and business. Out of the 50,000 young Africans who applied for the program, just one percent was accepted. VOA's Laurel Bowman caught up with some of those who made the cut and has this report.
Video

Video In Honduras, Amnesty Rumors Fuel US Migration Surges

False rumors in Central America are fueling the current surge of undocumented young people being apprehended at the U.S. border. The inaccurate claims suggest the U.S. will give amnesty to young migrants from the region. As VOA's Brian Padden reports from Honduras, these rumors trace back to President Obama's 2012 executive order to halt deportations for some young undocumented immigrants already living in the United States.
Video

Video Students in Business for Themselves

They're only high school students, but they are making accessories for shoes, fabricating backpacks and doing product photography - all through their own businesses. It's the result of a partnership between a non-profit organization that teaches entrepreneurship and their schools. VOA's Mike O'Sullivan and Deyane Moses met the budding entrepreneurs near Los Angeles.
Video

Video Astronauts Train in Underwater Lab

In the world’s only underwater laboratory, four U.S. astronauts train for a planned visit to an asteroid. The lab - called Aquarius- is located five kilometers off Key Largo, in southern Florida. Living in close quarters and making excursions only into the surrounding ocean, they try to simulate the daily routine of a crew that will someday travel to collect samples of a rock orbiting far away from earth. VOA’s George Putic has more.

AppleAndroid