Busia cross-border traders fear Kenya's high oil prices will hurt border trade

Uganda's Deputy Prime Minister Rebecca Kadaga with Kenya's Cabinet Secretary EAC, Arid and Semi-Arid lands Peninah Malonza during a tour at the Busia border to asses the custom union of Kenya and Uganda on November 10, 2023. [Benjamin Sakwa, Standard]

Cross-border traders in Busia have raised concern over the increasing tariffs on petroleum, saying it will hurt the business between Kenya and her neighbour Uganda where Kenya earns in excess of $1 billion annually through exports. 

The traders who presented a memo to the two countries' East African Community (EAC) Cabinet Secretaries Peninah Malonza (Kenya) and Rebecca Alitwala Kadaga (Uganda), said such tariffs should be revised to ease business. 

“Many countries in the EAC have protectionist policies that protect domestic industries and discourage regional trade integration. The current high tariffs recently introduced in Kenya, for example, will hurt border trade with Uganda and beyond,” said Sylvanus Mbongo Abungu on behalf of the traders.

The traders engaged the ministers who were on a working tour at the Busia One Stop Border Point (OSBP) on Thursday. 

“The recent proposed change of Uganda fuel import associated with the high tariffs in Kenya will affect business in Busia and stifle integration,” said Mbongo.

Uganda's Ministry of Energy and Mineral Development has proposed a bill in Parliament that seeks to cut reliance on Kenya for importation of its petroleum products. 

Their memo comes even as the land-locked nation, which imports 90 per cent of its petroleum through Kenya, seeks to cease its reliance on Kenya to access petroleum products citing an increase in pump prices. 

The Busia traders also said inadequate infrastructure, including transport networks, energy systems, and information and communication technology across the two countries posed a significant obstacle to integration. 

“The road from Kisumu to Busia should be a dual carriageway. The European Union has also been asking why Kenya and Uganda are not working together to initiate joint projects for easy funding,” said Abuga who also doubles as the Kenya National Chambers of Commerce Industry Chairman (Busia). 

The two ministers agreed to push for joint ventures saying the countries would benefit if they initiated joint infrastructure projects like the OSBPs that are in Taveta, Lungalunga, Namanga, Isebania, Busia, Malaba and Moyale. 

"We have engaged border control agencies, cross-border traders and Busia residents on how to enhance efficiency in cross-border transactions and facilitate the swift movement of cargo, services, and people,” said Malonza in a joint press briefing.

Kadaga regretted that the dream of the EAC had collapsed after a good start in the 1970s but assured that “President Yoweri Museveni was keen to revive the dream and make business between the countries that agree on more things than they differ thrive economically and socially.” 

The two countries equally promised to fast-track completion of the Sh2 billion Jumuiya Market at the Kenya-Busia border which has stalled due to a land dispute.

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