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President Uhuru Kenyatta’s sugar, milk deal with Uganda’s Yoweri Museveni stirs national storm

NAIROBI: The Opposition has questioned the rationale behind a reported deal between Presidents Uhuru Kenyatta and Yoweri Museveni allowing cheap sugar imports from Uganda into Kenya.

CORD leader Raila Odinga termed the sugar deal sour and tasteless, while Kakamega Senator Boni Khalwale warned it had the potential to kill the local industry struggling to stay afloat.

The leaders were reacting to agreements signed during President Kenyatta’s three-day visit to Kampala where he held bilateral meetings with his host Museveni and addressed the Ugandan parliament.

Museveni said Kenyan exports to Uganda are estimated at $700 million (Sh70.8 billion) compared to imports worth $180 million (Sh18.2 billion), and thanked President Kenyatta for agreeing to implement initiatives that also include deepening the commercial ties between Kampala and East Africa's largest economy to bridge the trade gap.

The two Heads of State observed that bilateral trade has potential to grow further and reaffirmed their commitment to the free movement of goods, labour and services, including the elimination of all trade barriers.

Raila said the deal, which would also see Kenya export to her neighbour beef and dairy products, was bad for business and termed it reckless.

He wondered why Uhuru struck the deal, which he claimed was shrouded in secrecy, at a time his administration was seeking ways of bailing out Mumias Sugar Company. The Government has since allocated Sh1 billion to the company.

The CORD leader challenged Uhuru to make public the content of the trade agreement signed with Uganda for scrutiny on how Kenyan workers, farmers and taxpayers would benefit. He further demanded disclosure of deals signed between Kenya and other countries.

"Sugarcane farmers across the country are the biggest casualties of struggling industry as a result of lack of payments," said Raila.

He added: "Equally tasteless is the deal on beef and dairy products. We doubt the New Kenya Co-operative Creameries and the Kenya Meat Commission currently have the capacity to export dairy and beef respectively to Uganda. It is therefore unclear who this deal is meant to benefit in Kenya."

ODM's Central Management Committee asked the President to put national interest above any other.

"It (the deal) is a shocker in its most negative sense. It is scandalous to use your nation to seek personal gain on the international stage," said ODM Secretary General Ababu Namwamba, adding that the President must also not confuse national interest with the Government's interest.

Flanked by party chairman John Mbadi, director of elections Junet Mohamed, Deputy Minority Leader Jakoyo Midiwo, National Assembly Chief Whip Thomas Mwadegu, among other officials, Namwamba said deals over issues like agriculture, where sugar falls, need the input of county governments.

"Agriculture is a devolved function. We leave it there for now. But you will be hearing more from us on this matter," said Namwamba.

Raila, in a separate interview, said the deal would flood the market with cheap sugar imports. He added that the deal is among others signed by the Head of State and mostly done "through single sourcing and meant to serve selfish interests".

"Such has been witnessed in the awarding of tenders for the management of the new KPA (Kenya Ports Authority) terminal and the construction of the Uganda-Kenya crude oil pipeline. The tribulations of the national carrier Kenya Airways equally result from such shadowy negotiations over national assets for private business gains," claimed the CORD leader.


Raila said it would be prudent to disclose to Kenyans how the Government intends to handle the sugar imports from Uganda to ensure that only the product from the neighbouring country lands in the local market.

He warned that unscrupulous local traders could also take advantage of the deal to bring in cheap sugar that could kill the local industry.

Separately, Khalwale said: "What we will end up receiving here is low quality sugar from Brazil and Egypt packaged as Uganda sugar."

And sugarcane farmers also raised concern over the reported deals. The farmers said the deal, if implemented, could see prices of sugar in the market drop significantly, thereby destroying the local industry.

Speaking to The Standard through their representatives, they said bilateral agreements, including with the East African Community (EAC), are welcome as they will expand the market for local produce but there should be checks and balances to ensure local markets are protected.

The EAC common market protocol was initiated by partner countries to provide for free movement of goods without restrictions.

"We cannot just open our gates to cheap sugar. We must put the interest of our farmers first, before catering for other countries' interests," said the Kenya National Federation of Sugarcane Farmers Deputy Chairperson Simon Wesechere in a separate interview.

The farmers asked the Government to convene a forum with all stakeholders before implementing the deal.

Sugarcane Growers' Association Secretary General Richard Ogendo said the EAC does not put checks on certificate of origin, thereby the deal's full implementation could see influx of cheap sugar.

"The agreements do not limit imports. It also does not cover the calculation of production and therefore Uganda businessmen will import cheap sugar from other countries, re-bag and sell it as local product," he argued.

"Kenya is a premium market and therefore factories in Uganda will favour export rather than local markets. This could greatly injure the local industry, which is currently struggling with cheap imports," he added.

Statistics from Agriculture, Fisheries and Food Authority show Uganda produces about 465,000 tonnes of sugar against a consumption of 320,000 tonnes, leaving it with a 145,000-tonne surplus.

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