Record gold imports tip Uganda-Tanzania trade balance

Africa Gold Refinery Executives Assist President Yoweri Museveni
when the company officially opened in 2017. Uganda recorded record gold imports from Tanzania in 2020

Uganda imported gold from Tanzania worth $ 591 million, which is more than half of all the country’s imports and five times more than anything Uganda exports there.

Kampala, Uganda | THE INDEPENDENT | Uganda and Kenya have lost their trade surpluses to Tanzania over the past year as the country opens up to regional integration.

It comes as the East African Community (EAC) plans to deploy a 24-hour operating system across all borders in the region to improve trade, according to Secretary-General Peter Mathuki.

The growth of Tanzania’s trade with other states is largely attributed to the removal of non-trade barriers that have characterized cross-border operations for some time, particularly with respect to trade with Kenya.

On the flip side, Tanzania’s huge export volumes to Uganda are boosted by the increasing amount of gold shipped to Uganda, while Uganda’s exports to Tanzania have yet to increase by significantly since the ban on grains and sugar more than two years ago.

At the start of the COVID-19 epidemic in the region in early 2020, travel was disrupted but leaders tried to ensure that containment measures did not affect certain sectors, including agriculture and transportation of merchandise. However, other factors such as controlling drivers at border points and restrictions on human movement within countries caused regional trade to be affected, but not uniformly.

Fresh and perishable agricultural products were the most affected due to border delays and labor movement difficulties.

Record gold imports

In calendar year 2020, Uganda’s exports to trade amounted to $ 95.13 million, according to data provided by the United Nations trade and commerce database, COMTRADE, while between July 2020 and June 2021, they had fallen to around 90 million.

On the other hand, Uganda imported goods worth $ 743.68 million from Tanzania in 2020, and this figure rose to over $ 1.2 billion between July 2020 and June 2021. Traditionally , Uganda’s exports to Tanzania were iron and steel; cereals, sugar and sugar products; body products, vegetable and animal oils; and drinks, among others, and recently, freight trailers. For example, a ban on sugar from Uganda would drastically reduce its revenue from exporting raw materials to Tanzania.

Ugandan imports from Tanzania have evolved further, especially with the growing demand for gold in Uganda in recent years. Currently, Uganda has at least four refining companies, including Ilota Mining Group, Carvataro refinery ltd, African Gold Refinery (AGR) and Simba Gold Refinery Ltd.

At the same time, Uganda’s mining capacity is far less than the capacity required to power refineries and this means that most of the gold is imported, mainly from the Democratic Republic of Congo, Rwanda and the United Kingdom. Tanzania.

In 2020, Uganda imported gold from Tanzania worth $ 591 million, more than half of all the country’s imports and five times more than anything Uganda exports to it.

“Regular consultations and dialogues within national private sector bodies are essential to achieve consensus within a partner state. Divergent positions within a country will only delay the conclusion of trade deliberations at the regional level, further delaying the implementation of regional trade policies, ”said Dr Mathuki.

Tanzanian exports to Kenya had been hampered by the different political approaches of the leaders of the two countries, Uhuru Kenyatta and the late John Pombe Magufuli, on trade issues. Tanzania banned several agricultural products from Kenya during this period, citing poor standards and adequate production in the country, while confectionery and related products were banned for issues of origin of raw materials.

In 2018, Kenya banned the import of rice from Tanzania, just after it stopped wheat and energy drinks, among others. However, that trend has since changed following an agreement between the two leaders to open trade between them earlier this year.

Kenya Revenue Authority figures show that Kenya’s imports from Tanzania increased by 70% from January 2021 to $ 167 million through June 2021. On the other hand, Kenya exported goods to Tanzania from valued at $ 158 million, which represents a decrease in value of 21.4% and a deficit of $ 9.3 million.

At the Namanga border post itself, the volume of trade between the two countries has increased sixfold. This has been attributed to bilateral agreements signed in May 2021 between Kenyatta and current Tanzanian President Samia Suluhu Hassan.

According to the data, Kenya’s main imports from Tanzania are timber and wood products, such as charcoal; edible cereals and vegetables. Freight traffic in the opposite direction included pharmaceuticals, plastics, iron and steel.

Kenya Manufacturers Association Mocai Kunyiha told the EABC CEO meeting on Wednesday the need for countries in the region to remove non-tariff barriers.

“We have the capacity and the ability to add value to the wide range of resources available to both countries for export markets. However, the achievement of this goal is hampered whenever the business community encounters barriers to trade, which has an impact on the benefits of trade for the whole region, ”he said.

For his part, EAC General Secretary Peter Mathuki urged the business community to promote public-private partnerships, saying this is what has boosted trade between Kenya and Tanzania.

“The private sector needs to go beyond advocacy and liaise with government to find solutions to some of the trade issues facing EAC partner states,” he said.




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