Kenya and Tanzania seem to be having a boiling disagreement over how to handle cross border policies with Covid-19 threat lingering over the horizon.
This was laid bare when Tanzanian President John Magufuli banned trucks ferrying cargo from crossing over to Kenya.
The move appears to be a retaliation to President Uhuru Kenyatta’s decision on Saturday where he announced restriction of human traffick across the border with Tanzania to prevent imported cases.
President Uhuru’s move preceded increased testing at the Namanga border which revealed that the majority of truck drivers from the neighbouring country were testing positive for the virus.
Standard Digital had an interview with Economics Analyst XN Iraki and from the look of things; the stalemate is bad news for East African countries which rely on cross border trades. Below, excerpts.
Kenya announced a ban on human traffic across the border with Tanzania except for cargo trucks on Saturday. On Sunday Tanzania responded by preventing trucks ferrying goods to and from Kenya. What are the economic ramifications?Iraki: This will slow down the trade between the two countries. Yet, traditionally the closer the countries are, the more the trade- gravity theory of trade. Depending on what’s traded, the price of some goods could go up. My biggest concern is food. Less trade also means job losses- when both countries can least afford.
What are significant commodities Kenyan consumers are likely to miss out should the freezing of movement continue.Iraki: Food mostly from northern Tanzanian and manufactured goods from Kenya.
How is the feud likely to affect even consumers beyond Kenyan borders?Iraki: Lots of goods from other countries pass through Kenya before they get to their destination. They will feel the effect of this feud through delays, and possibly higher prices.
Traders are decrying losses due to low-paced clearing and testing of drivers. What options do the regional governments have in their books?Iraki: They have no option but negotiate. It’s their citizens that will be affected- negatively. Why not cooperate in testing on both sides, so that a test from either side is recognised. They could even upload the results online so that Immigration officers can see it. Efficiency is key in trade.
Is Kenya likely to be hit hard in this economic tussle? Because it seems Tanzanian government is acting like they produce enough and feeds other countries.
Iraki: That might be in the short run. Food can be sourced from elsewhere but more expensively because of transport costs. Remember food is a big factor in inflation. If we shift our resources to food, we shall slow down the economy, denying others sectors their share of investment.
Are there possible remedies to the standoff at the East African Community?Iraki: The leaders can sit and sort things out, I am sure there is a dispute resolution mechanism within EAC. We also have the World Trade Organization (WTO) and UNCTAD.
Any parting shot?Iraki: Trade disputes should be the last thing to worry us, with Covid-19 hanging over us. Kenya and Tanzania will always be neighbours, we must learn to live harmoniously, symbiotically, more like brothers and sisters. We have even intermarried across our southern border and share one language, Swahili.
XN Iraki is Economics Analyst and professor at the University of Nairobi’s School of Business.