Bahati denounces discriminatory trade practices in East Africa

State Minister for Investments David Bahati has criticized regional governments for discriminatory trade practices that undermine the East African Community (EAC) integration agenda.

He emphasized this point during a meeting between East African Legislative Assembly (EALA) lawmakers and regional business leaders on Thursday, October 31, 2024. 

The engagement, attended by EALA Speaker Joseph Ntakirutimana, transpired in the conference hall of Uganda’s Parliament. 

Bahati was representing Speaker Anita Annet Among, who was the chief guest.

Speaking on Thursday, he expressed that, while there is a commitment to eliminating Non-Tariff Barriers, this resolve seems confined to discussions at EAC summit meetings. 

At the operational level, he pointed out, it is virtually absent.

Alluding to a meeting he held with the Committee on Foreign Affairs on Wednesday, Bahati highlighted issues surrounding Uganda's Memoranda of Understanding with Rwanda and Burundi, as well as currency discrimination.

“One of the things that my neighbours from Rwanda have been liking from our country, I am afraid to say it because I don’t believe in it, though I get tax from it is Uganda Waragi. Uganda Waragi people like it in Rwanda but now they are sabotaging it from entering. So we have been asking, what is the problem?” Bahati disclosed.

Looking ahead, he urged partner states to hold regular ministerial meetings to address persistent issues that hinder shared regional prosperity.

“A few years when I was in Arusha, I had Uganda shillings and I failed to change to Tanzanian currency and dollars. I don’t know whether that has been resolved… how can you talk about a common currency? Our colleagues from Tanzania you can take up that issue and we resolve it,” he wondered.

Minister Bahati and Sarah Kagingo the Vice Chair, Private Sector Foundation Uganda at the event. (Credit: Edith Namayanja)

Looking ahead, he urged partner states to hold regular ministerial meetings to address persistent issues that hinder shared regional prosperity.

Cost of doing business

On her part, Speaker Anita Annet Among pledged to address the cost of doing business within both the community and the African Free Trade Area (AFTA).

 “The speaker would like to thank the private sector for our combined Gross Domestic Product of $163billion (sh594.95 trillion). Almost sixty percent of this GDP is in the hands of the private sector. Here in Uganda we have a GDP of $55billion (sh200.75 trillion) but the Government’s billion budget is around $11billion (sh40.15 trillion). Meaning that the rest of $44 billion (sh162.8 trillion) is in your hands. So the future of the East African Community (EAC) is actually in the hands of the private sector,” Among conveyed.

Reinforcing this, Bahati added that during a recent visit to Nairobi, President William Samoei Ruto shared that an attempt to export goods to Accra took three weeks, a considerable delay in the business world.

“I was with the minister of trade again in Nairobi, he told me that he had moved through five countries to Gambia. I think as a Government we are committed. His Excellency President Yoweri Museveni is providing leadership on this. You have heard his commitment to building roads in the Democratic Republic of Congo because in Congo we are now having exports worth $500million (sh1.85trillion),” Bahati explained.

Politicians, business leaders cry out

His comments followed an outcry from a mix of business and political leaders, including Geoffrey Macho (Busia Municipality, NRM), who suggested that the ongoing disrespect for trade agreements is hindering the movement of goods and people across the region.

“As I talk now, we have 300 trucks of flour parked on the border of South Sudan. Beginning with last week, they refused our flour to go to South Sudan which we believe is a trade war. 

I know some people will say no. This morning I had a meeting with RWAHI which is a value-additional factory exporting flour to South Sudan. With such issues, we need harmonization of trade agreements,” Macho stated.  

He added that there have been several instances in which Kenya denied entry to Ugandan milk and fuel. The situation escalated to a point where the latter resorted to legal action to allow importation of fuel under Government to Government agreement.

“Work permits are a very big problem in our region. We still have challenges with our brothers in Kenya and Tanzania, the people we call Wakombozi (liberators). Wakombozi is still refusing our people to get work permits freely, I know they might be at their jobs, but why have we opened Uganda to everybody in East Africa? …I know most of the words I talk, intellectuals might not like them because they are in board rooms, they don’t visit borders,” he concluded.

Madi Okollo Woman MP Joanne Okia addresses buiness leaders and EALA MPs. (Credit: Edith Namayanja)

Unscrupulous practices

Although protectionist policies can be oppressive, Joan Okia (Madi-Okollo District Woman MP, NRM), a businessman herself, explained that some of these measures are a counter-reaction to below-the-belt business practices used by certain businessmen to evade taxes.

“Around 2009, I was trading rice from Kenya as a small distributor and there was a small place in Siaya (Western Kenya) where I used to get the rice. At that time, there was no tax on rice from Kenya. So I was the distributor for Uganda in all the supermarkets, I don’t know if you know the price that was called Prime Harvest. Very tasty rice at a very low cost,” Okia narrated.

“Out of the blue, some business people became clever because rice from Pakistan and other countries was being taxed but rice from other East African countries was not being taxed coming to Uganda. Other actors started importing from Pakistan, re-packaging and saying made in Kenya. In 2011, the Ugandan Government made a decision to tax all rice and I exited the distribution of Prime Harvest,” she explained the genesis.

Okia is the reigning chairperson of the Parliamentary Forum on East African Community Affairs (PEACA). The main objective of PEACA is to ensure effective parliamentary participation and influence on the social and economic integration of EAC. 

What leaders say

Joseph Ntakirumana (EALA Speaker)

Uganda Airlines you could be congratulated. In this region, you are the cheapest airline. I don’t know how you handle it but when we compare Uganda Airlines tickets and Rwanda Air Kenya Airways and Air Tanzania, we found that Uganda is a little bit cheaper than others. 

How can our East African body which is in charge of harmonizing tariffs, how can you be there enjoying salaries when the traders themselves are crying and requesting to harmonize?

Jackson Atima Lee Buti (Arua Central, NMR)

Local relations around the cross-border towns are not good. Soldiers are harsh, especially the South Sudanese and Congolese with roadblocks everywhere and extortion of money from businesspeople in the name of taxes which are not clear. There is no clear tax policy and officers behave as if they are not salaried.

Gilbert Otim (Stabex marketing Manager International) 

Once the product is loaded from Eldoret or Nairobi or Mombasa, surprisingly just because of a piece of paper that is supposed to be issued to one of the clearing boys here to take it to the migration or revenue offices, our trucks can line up for two days there. 

First of all, it is inhumane to keep the driver under the heat, sitting in the car. No toilet, or first aid facilities. For over 50 years it has been a norm, sometimes you get them packed across almost 80 kilometers, another 20 kilometers into Uganda.