Traders experience frustrations even after bilateral trade deal

Kenyan traders exporting goods to Tanzania have had numerous frustrations ranging from delays, multiple compliance checks and hefty levies in a move that paints frosty trade relations between the two neighbours.

Despite last Sunday’s signing of trade restriction truce between Kenya’s Foreign Affairs Cabinet Secretary Amina Mohamed and her Tanzanian counterpart Augustine Mahinga, the traders were still stranded with some goods at the border points as late as Saturday.

TRADE ACCORD
Kenyan manufacturers say the Tanzanian authorities do not recognise checks carried out by the Kenyan authorities and have introduced several agencies and fees to certify goods from Kenya, making a mockery of the deal that was meant to collapse the trade restrictions.

The two ministers last Sunday were said to have been communicating what had been reached between President Uhuru Kenyatta and Tanzania’s John Magufuli but it seems to have ended on paper.

Top in Tanzania’s lists of goods denied access include milk and milk products, margarine and tiles.

LOSSES
The Tanzania Revenue Authority (TRA) is said to have declined to allow the products entry despite having paid all the relevant charges exposing the traders to potential losses as some of the goods are perishable.

“Some of the products like milk and margarine are perishable with a very short shelf life.

"The condition of storage might not be good and may cause the products to go bad.

"Manufactures will be required to sell within 14 days to allow the remaining 75 per cent shelf life to be sold by traders.

"It is extremely expensive to keep refrigerated trucks at the border,” the manufactures umbrella body wrote.

CUSTOM DUTY
Apart from the TRA, which receives custom duty for the goods entering Tanzania, milk exporters have to deal with the Tanzania Foods and Drugs Authority (TFDA), which has its own lengthy compliance process.

TFDA, which enforces and regulates the quality, safety and efficacy of food, medicines, cosmetics and medical devices, has no shared understanding with the Kenya Bureau of Standards (Kebs) and the Tanzanian Bureau of Standards, which are the authorised bodies mandated to enforce the harmonised standards under the EAC agreements.

As a result, TFDA does not recognise Kebs standardisation as sufficient evidence of product safety and regulatory compliance.

LABELLING
In some instances, Kenyan traders have had their products passed by TBS only to be rejected by TFDA leaving them in the middle of regulatory confusion they believe is intentionally crafted by Tanzania to frustrate trade. 

TFDA, which also requires that Kenyan exporters label their products in a manner unique to the Tanzanian market-labelling in Kiswahili has angered many Kenyan manufacturers who feel their right to unique labelling has been violated.

BUSINESS COST

By being compelled to label the products to suit only Tanzania, the products are hard to sell somewhere else after Tanzania rejects them since not many countries speak Kiswahili

“TFDA deliberately delays certificate of registration to Kenya companies. The finalisation of the accepted label can take over 3-12 months.

"This additionally increases the cost of doing business, time wasted and delay in delivery of goods.

"Kenya products have been stranded at the borders or manufacturers warehouse because they have not passed TFDA requirements,” KAM wrote in the highlights.

LEVIES
Those exporting milk and milk products to Tanzania for example deal with nine institutions each with specified licence requirements and fees.

A truck for example would need to pay Sh31,000 to cross into Tanzania, pay Sh1,000 to the Arusha Municipal Council, 0.2 per cent of the value of milk to the weights and measures, 1 per cent of the value to the Tanzania Dairy Board and another 0.75 per cent to TFDA.

The validity of the veterinary permit was recently reduced from 30 to 15 days as some levies were raised by 100 per cent as Tanzania’s protectionist move threatens to overturn write off trade relations with Kenya.

APPROVAL
For the products to be registered in Tanzania, Kenyan manufacturers pay 1.5 per cent of the total value of export and a retention fee of Sh20,00 to TFDA, which issues a certificate in a process that may takes 2-3 days or even a week. 

The Kenyan Manufacturers now believe that the numerous fees demanded by various agencies in Tanzania are aimed at driving Kenyans out of business.