Kenya mulls trade balance as EAC tariffs review looms

Imports to Kenya increased from Sh13 billion in 2008 to Sh61 billion in 2017, but exports dipped by 58 per cent

East African Community (EAC) member states are rushing against time to review and harmonise the Common External Tariffs (CET) to improve intra-trade initiatives and ease cost of doing business in the regional bloc.

This comes amid concerns in Kenya over regional trade balance which declined sharply beginning 2012-2017, from Sh122 billion in 2012 to Sh71 billion last year, a 58 per cent dip.

In that period, imports to Kenya from the region increased almost five fold from Sh13 billion in 2008 to Sh61 billion in 2017.

In the past one year, each of the six member states has been carrying out comprehensive national reviews of their external tariffs and evaluating the impact of tariff regimes in relation to member states’ development objectives.

According to Kenya’s Cabinet Sevretary for East African Community Aden Mohamed, members of the regional economic bloc have formed task forces to collect and analyse data and come up with a list of the goods that may require protection and applicable tariffs.

“At the moment each country is reviewing their own common external tariffs, consolidate and harmonise the laws with a view to ensuring that they are consistent with the EAC laws. By next year June 30, we will have a regional forum to review the laws and tariffs from each state and harmonise them so that we can improve intra-trade in the region,” the CS said.

CET is normally introduced by countries operating within a common union to end the re-exportation of goods imported goods within the bloc. It is also intended to restrain imports from outside the customs union into the bloc without paying the due tariff.

Sensitive goods

Over the years, there have been conflicts amongst member states over tariffs on the common traded “sensitive goods,” with some insisting that these goods should be subjected to uniform tariff when sold to any EAC state.

“At the moment, the member states are operating within the three band structure but as most continue reviewing their tariffs, most are proposing a four –band tariff structure but this will be decided at the regional forum next year in June when each member gives their national position,” said Principal Secretary in the ministry of EAC Susan Koech.

The Cabinet Secretary who yesterday met with members of Kenya Association of Manufacturers (KAM) and Kenya Private Sector Alliance (KEPSA) said the region is also reviewing several custom law so that they can conform to the EAC Common Market Protocol. These include free movement of goods, free movement of persons, free movement of labour and free movement of capital .

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