Private Sector Foundation Uganda (PSFU), has expressed discontent with Kenya’s decision to ban milk powder importation in a bid to protect processors from regional competition.
In a memo dated March 6, to all importers of milk produce in Kenya, Kenya Dairy Board, said the country expects more rains this month, which will boost local milk production and reduce the need for imports, thus the indefinite suspension of milk powder importation.
“In anticipation of the long rains, the government has stopped the importation of milk powder to cushion the industry from surplus production and low producer prices,” the board’s managing director Margaret Kibogy wrote to milk powder importers in a letter dated March 6.
“Consequently, the board has temporarily suspended the issuance of these import permits until further notice.”
The regulator said it will continue to monitor the production and demand dynamics of the commodity before deciding when imports of milk powder can resume.
The move is seen as protecting processors and farmers from lower priced milk from neighbouring Uganda.
“We will make a decision [of lifting the ban or not] after the monitoring, this is to the benefit of the farmer,” Ms Kibogy told sections of media.
The long drought has resulted in the current high milk prices.
The board has also suspended the issuance of import permits.
Now, PSFU, an apex body for the private sector made up of 230 Business Associations, Corporate bodies and the major Public Sector Agencies that support private sector growth in Uganda, says the decision contradicts East African Community (EAC) Trade Protocals.
Ms Sarah Kagingo, the PSFU Vice Chairperson, says the decision is a barrier to regional trade which should be a cornerstone of EAC Partner States.
“Kenya’s ban on importation of our products is not new, if it’s not milk, it’s eggs or grain. The ban contradicts the EAC (East African Community) trade protocols, the Common Market Protocol on free movement of goods and services, as well as the agreement that established the African Free Continental Trade Area (AfCFTA),” said Ms Kagingo.
Asked whether PSFU would consider organising milk processors in Uganda for a protest at the Kenyan border, Ms Kagingo said their approach is engagement.
“Our approach is engagement not belligerence. Experience shows that engagement delivers,” said Kagingo.
She added,” regional trade should be the cornerstone of EAC Partner States’ policies. Our countries signed the Common Market Protocol in 2009 which came into force in July 2010. However, the practice often contradicts what was ratified, and businessmen engaged in export need handholding. We (PSFU), in partnership with the Ugandan government, have held several business summits to, among others, resolve barriers to trade and travel.”
Asked what steps PSFU would take, Kagingo said Uganda’s private sector apex body will engage the Ugandan government and KEPSA.
“At a strategic level, we partner with government in pursuit of integration of markets for the benefit of the entire private sector in the region. We will table the unfortunate development to the Ugandan government to use their good offices and diplomatic mechanisms to engage the Kenyan government. We will also engage our counterparts – KEPSA,” Kagingo said.
Decision contradicts recent decisions on regional trade by Kenyan authorities
In late October 2022, President Ruto announced plans to lift the March 2021 ban imposed by President Uhuru Kenyatta’s administration on Ugandan agricultural produce.
The Kenyan government said at the time that it was protecting its farmers from being disadvantaged by the cheaper produce from Uganda.
When President Ruto assumed office, and subsequently toured Uganda in October, he suggested that the ban on farm produce from the neighbouring nation would be lifted.
“It is our place as leaders and citizens of the East Africa Community (EAC) to work together to transform our borders which today stand out as barriers and convert them to bridges so that goods, people, and services can move across this East Africa without any impediments,” Dr. Ruto said on October 9, 2022 during his address as the guest of honour at Uganda’s Independence Day celebrations in Kampala.
“There is absolutely no reason why food cannot be available in our region. If there is food in Uganda, it should find its way to Kenya. If there are opportunities in Kenya, Ugandans should be able to access those opportunities,” added Ruto.
The ban on agricultural produce from Uganda, especially milk, maize and eggs, saw a significant reduction in the volume of trade between the two nations.
In late October, President Ruto reiterated his decision to lift the ban on farm produce from Uganda.
Speaking at a function of the Kenya Association of Manufacturers (KAM), President Ruto said: “Uganda should bring cheaper milk here because they can produce it more cheaply. We should (also endeavor) to add value to our milk.”