Tanzanian President John Pombe Magufuli is yet to be convinced to allow Ugandan duty free Sugar into his country.
Magufuli through his Trade Ministry has been pushing a protectionist sugar policy, an effort he says is meant to protect Tanzanian sugar manufacturers.
Tanzania recently denied entry of 600 tonnes of Ugandan sugar into their country and demanded that the importer should pay taxes of 25%.
This is in spite of the fact that under the EAC Customs Union protocol, no such taxes are to be charged on any goods coming from any of the regional member countries.
The sugar from Kakira Sugar Factory has since been shipped back to Uganda, amid grumbling from Ugandan officials.
The Tanzanian leader today met with President Yoweri Museveni and the two leaders discussed an array of issue, among them the sugar standoff.
Addressing a joint press conference after the meeting, the Tanzania leader rooted for “guarding against too much sugar being damped in the region and killing the region’s industries and employment opportunities.”
“Our people met and discussed this. We should decide whether we need to grow our industries or becoming dumping grounds,” President Magufuli reported said.
Last month, a Ugandan delegation led by Hon. Gume Ngobi Fredrick, Minister of State Trade Industry and Cooperatives, held a meeting in Mutukula with a Tanzanian delegation led by Hon. Charles Mwijage, Minister of Industries, Trade and Investment.
Chimpreports understands that nothing tangible came from the meeting.
David Kiiza, who heads the Sugar desk at Uganda’s Trade Ministry told us today that while the Tanzanian officials expressed will to let in the Ugandan Sugar, they never did with the Kakira consignment.
“In the meeting they promised that they would not charge the tax, but back at the border, TRA (Tanzanian tax body) insisted on charging. The sugar has now been brought back,” he said.
It is unclear whether or not President Museveni and his delegation (which includes Trade Minister Amelia Kyambadde and Jim Kabeho, the Chairman of the Uganda Sugar Manufacturers Association) will make further efforts to convince his Tanzanian counterpart to change his mind.
But in case Tanzania sticks to its guns, Kiiza tells us Uganda will have to petition the EAC, which will decide on the enforcement of the protocol.
Meanwhile, President Museveni and Magufuli discussed a number of other trade aspects including boosting transport on Lake Victoria.
Magufuli said Tanzania is hoping to introduce big ships to replace the former MV Victoria ship. He said Tanzania has already procured seven planes and three of them have already arrived in the country to ease regional transport.
On his part, President Museveni said the recent signing of the peace agreement between rival factions in South Sudan will ensure that peace prevails in the region and that refugees return home and embark on their normal lives.
“We hope that with the UN support in regards to food and basic essentials, the refuges could return home by January and take advantage of the rains that start in March in order to grow some food,” he said.
Museveni noted that, he briefed his counterpart about the recent signing of the peace agreement in South Sudan and the situation in Burundi about refugees, adding that continued conflict has affected trade and retarded development.
The President who is also the current Chairman of the EAC said he requested for the meeting with President Magufuli to brief him about the outcome of the recently concluded BRICS Summit in South Africa during which he made a case for the BRICS countries to invest in the EAC which provides high returns on their investments, higher than Europe, Latin America and Asia.
“Investment in infrastructure development is key especially in roads, railway and electricity. The Chinese have already helped us construct two hydropower dams in Karuma which is 600MW and Isimba 183MW.
Museveni further stated that there is need for steel and cement which have a high demand in the construction industry.
The President also made a case for direct flights from East Africa to Asia and China saying they would open up markets especially in tourism industry citing that if the EAC brought in one million tourists from China, it would be a huge boost.
President Yoweri Museveni further called for the fast-tracking of the power lines in Kagera saying progress is being made on the Kikagati/Murongo 10 MW Hydro Power project. Reports indicate that the power sharing and sales agreement between TANESCO and UETCL was signed on September 18, 2017. The Power Purchase Agreement between UETCL and KIKAGATI power company limited was signed on August 11, 2017, as well as an Implementation Agreement with government.
Information available also indicates that an MOU on Nangoma cross-border electrification project was signed in July 2017 in Bukoba and a contractor has been selected and works are expected to commence in September 2018 and be completed in July 2020.