Tanzania has introduced new protectionist measures affecting imports of eggs, dairy, meat products, and confectionery, raising concerns over the East African Community (EAC) Customs Union regulations and impacting export revenues for traders.
These newly imposed tariff barriers threaten to escalate trade tensions between Tanzania and Kenya, which recently appeared to be improving. Kenyan manufacturers have attributed a Sh4.2 billion decline in export earnings from goods sold to Tanzania last year to the “discriminatory taxes” enforced by authorities in Dodoma, marking the first decrease in eight years outside of the pandemic period in 2020.
Tanzania’s new sugar levy of Tsh1,000 (approximately Ksh50) per kilogramme on Kenyan-made confectionery items such as biscuits and chocolates does not apply to locally produced goods. Similarly, Kenyan dairy products face a Tsh1,000 levy per kilogramme or litre, vastly exceeding the Tsh50 charged for comparable local products.
The Kenya Association of Manufacturers (KAM) has highlighted a 25 percent excise duty on exports of hatching eggs to Kenya as contradictory to the EAC Customs Union’s principles. These higher charges have rendered Kenyan products costlier and less competitive in Tanzania, which is the largest market in East Africa by population.
KAM has expressed concerns over the imposition of higher taxes on Kenyan products compared to Tanzanian goods, undermining the spirit of equitable trade within the EAC.
The EAC Customs Union Protocol, established in 2005, aims to facilitate free movement of goods, services, capital, and labor among member states, promoting a zero-duty framework on domestic goods. However, the re-emergence of trade barriers amid the Kenyan shilling’s strengthening against regional currencies has adversely impacted the profitability of traders transporting goods to Tanzania.
Data from the Kenya National Bureau of Statistics indicates a 7.36 percent drop in the value of domestic exports to Tanzania, falling from Ksh55.96 billion to Ksh51.84 billion in 2024—marking the first decline in earnings from sales since 2017 after the imposition of stringent protective policies by previous Tanzanian leadership.
Manufacturers are urging for swift action to address non-tariff barriers that hinder local industry. Historical trade tensions between Nairobi and Dodoma over tariff and non-tariff disputes have occasionally required intervention from government officials.
In August, Kenya’s Agriculture and Food Authority temporarily imposed a 2.0 percent levy on cereals and legumes from Tanzania, which faced backlash from traders. Additionally, Tanzania had briefly suspended new tea import permits from Kenya, citing quality concerns before the issue was amicably resolved through dialogue.
Provisional trade statistics reveal a national decline in Kenya’s annual earnings from goods sold to major African markets, spotlighting challenges faced by the manufacturing sector amid a stable local currency. Kenya’s traders earned approximately Ksh421.34 billion from exports to key African nations in 2024, a slight decrease from Ksh429.69 billion the previous year, breaking a six-year growth streak.
This drop of 1.94 percent corresponds with a 17 percent increase in the Kenyan shilling’s value against the US dollar, indicating that converted earnings have diminished.
