Tanzania’s exports overtake imports from Kenya

Tanzania's exports to Kenya have exceeded its imports for the first time in decades, marking a significant milestone in the trade relations between the two East African nations. According to the latest data from the Central Bank of Kenya, Kenya's imports from Tanzania grew nearly three-quarters in the six months to June 2021 compared with a year earlier, showcasing a substantial increase in trade activities between the countries. Economic Analyst, Gabriel Wangonda, shed light on the factors contributing to this positive shift in trade balance during a recent interview on CNBC Africa. Wangonda highlighted the impact of the abundant Banpa Harvest in Tanzania last year, emphasizing the significant export of agricultural goods and raw materials to Kenyan industries. With the favorable harvest season, it was expected that Tanzania would achieve a positive trade balance with Kenya, as evidenced by the recent trade data. Previously, trade barriers such as high tariffs and bans on specific goods hindered the smooth flow of trade between the two countries. One of the significant barriers mentioned was the imposition of high tariffs by both Tanzania and Kenya on certain goods, leading to an imbalance in trade. For instance, Tanzania had increased tariffs on milk imports from Kenya, making it economically unviable for Kenyan traders. In retaliation, Kenya implemented bans on Tanzanian goods like tiles and LPG cylinders, further straining trade relations between the nations. However, with recent diplomatic efforts between the leadership of both countries, these barriers have been addressed, paving the way for improved trade relations. Moreover, Wangonda elaborated on the success of Tanzania's gold exports, noting a 34% increase in earnings in 2020. This positive trend is expected to continue in the first half of 2021, driven by a well-regulated mining regime that has attracted interest from international traders. The formalization of small-scale miners in Tanzania and the establishment of well-regulated markets have bolstered investor confidence, leading to an influx of traders, particularly from Dubai, seeking to tap into Tanzania's lucrative gold market. In conclusion, the recent surpassing of Kenya in terms of trade balance by Tanzania underscores the importance of addressing trade barriers and fostering diplomatic relations for mutual economic growth. The newfound success in trade relations between Tanzania and Kenya sets a positive precedent for other East African nations and highlights the potential for further collaboration and economic development in the region.