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Regional coffee agencies want tariffs removed to boost trade

BUSINESS
By Graham Kajilwa | June 18th 2021

Woman collecting coffee berries from a coffee plant in Ethiopia. [Courtesy]

Coffee agencies in the East African region have proposed the removal of trade tariffs in the continent to boost earnings. 

A policy brief published by the East African Business Council (EABC) says countries should heavily maximise on the African Continental Free Trade Area (AfCFTA) agreement to search for new markets.

The policy, published May 17, 2021, notes that given the economies of scale, the free trade agreement is a golden opportunity for the East African Community (EAC) to export coffee to the rest of the continent. 

"To this end, the EAC should advocate and push for zero tariff coffee trade, especially processed coffee, across the entire African region as part of the AfCFTA,” it says.

EABC says that since all the five countries - Burundi, Rwanda, Kenya, Uganda and Tanzania - produce coffee of high quality, none should consider the beans to be sensitive products.

Instead, they should use the opportunity to boost local uptake of coffee.

The document is titled, Policy Brief on General Trade Obstacles on Coffee Trade in the East African Community.

It involved Café du Burundi, Kenya Coffee Traders Association, Coffee Exporters and Processors Association of Rwanda, Tanzania Coffee Association and Uganda Coffee Federation.

Joint marketing

The document proposes that the coffee agencies can make a special blend of coffee dubbed ‘EAC Cup of Excellence’ by mixing the beans from each country for joint marketing.

“This model has been tried by countries such as Colombia and Brazil, who have entered the downstream coffee supply chain by roasting and selling products to market overseas,” it says.

The policy says 168,836,000 bags (each 60kg) of coffee were produced in 2019. Burundi produced 253,000 bags,  Kenya 850,000, Rwanda 363,000, Uganda 5,250,000 and Tanzania 926,000.

A proposal to reduce prices of coffee in the EAC to boost local consumption has also been fronted. The region has also been asked to hold festivals and initiatives to sensitise locals to consume coffee.

EABC lists several challenges hampering the growth of the sector ranging from low productivity to multiplicity of taxes and delays in receiving refunds on value-added taxes.

“This was noted as a key challenge in some partner states, noting that not only did these cut into already depressed profit margins but also added to the cumbersome procedures given the multiple collection points and authorities and the time taken to make all the payments,” it says.

Unlike tea, the document says, roasted coffee beans have a short shelf life in terms of aroma, which calls for special packaging that is often expensive because the materials are imported. 

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