Uganda Revenue Authority (URA) is set to meet Kenya Revenue Authority officials and the Uganda Sugar Manufacturers Association to decide on how to facilitate sugar trade in the region.
The meeting will take place on the 9th and 10th of this month in Kampala. The sugar question has been a thorny issue between Uganda and Kenya for long, with the latter saying Uganda’s sugar exports to Kenya would edge local producers out of business.
“We want to talk about the smooth flow of this trade,” Dicksons Kateshumbwa, the URA commissioner for customs, told reporters at the revenue body’s headquarters in Nakawa on Wednesday.
The conflict on sugar trade peaked recently, sparking heated political debate in Nairobi, when Kenya President Uhuru Kenyatta sealed an agreement with President Museveni that Ugandan sugar exports should go to Kenya while the latter’s milk and beef products are accepted in Uganda.
The opposition in Kenya described the move as “selfish” on the part of Kenyatta and that the cheap sugar from Uganda was bad for their industries. Ugandans are also accused of importing sugar from Brazil, repackaging it and re-exporting it to Kenya duty-free.
Kateshumbwa said this was not true and it did not make any “commercial sense”.
“The sugar we import is specifically used in industries because we don’t produce it here,” he said. “The one we export is purely produced in Uganda.”
Uganda is not the biggest export of sugar to Kenya. Madagascar and Brazil are the top sugar exporters to East Africa’s biggest economy.
Kateshumbwa said: “The trade balance is highly tilted in favour of Kenya. You wonder why Ugandan sugar cannot be allowed there.”
Uganda’s total imports from Kenya were $758.9m (Shs 2.7tn) last year compared to the exports of Shs $186.7m (Shs 661bn), depicting a very high trade imbalance between the two countries.
Uganda is Kenya’s biggest trading partner in the region. Uganda produces about 500,000 tonnes of sugar annually but the country can only consume 300,000 tonnes.
This month’s meeting will not be the first time URA is meeting KRA officials over the same issue. Last year in July, a meeting was convened at Serena hotel in Kampala to discuss the sugar issue and Kenya authorities promised to allow Uganda exports into their country. It never happened.
Analysts say this casts doubt on whether the latest meeting will yield any results.