WHY KENYA, UGANDA RELATIONS ARE KEY TO EAC

Last week President Museveni paid a state visit to Kenya on the invitation of his counterpart Uhuru Kenyatta.

It made sense that Museveni would overfly the capital Nairobi to start the visit in the Mombasa, the de facto gate way to the region. According to port authorities in 2017 Uganda accounted for almost a quarter of all trade through the port. Seven million tons out of a total of 30.35 tons of cargo that pass through Mombasa were registered to Uganda.

Museveni eventually went to Nairobi, riding on the Standard Gauge Railway (SGR) first leg.

During the visit a series of agreements to allow greater access of Ugandan – sugar, dairy and poultry products and Kenyan goods – beef in the respective countries were signed off. The intention to lease 

Uganda land to build a dry port in Naivasha, one of the terminal’s of the SGR was also announced.

"Before Tanzania came under British mandate after the First World War it was just present day Kenya and Uganda, stitched together by the Uganda Railway, which had landed in Kisumu in 1901. A steamer service led to the construction of an 11 km line from Port Bell to Kampala. The line via Malaba to Kampala was completed in 1931.

The real core of the east African community is Uganda and Kenya, where the trade figures between the two countries is concrete evidence of their symbiosis.

In 2017 trade between the two countries stood at more than a billion dollars. A similar figure for trade between Kenya and Tanzania is about $500m.

It is clear that our relation is not based on sentimentality. Even during the 1970s when diplomatic relations were at their lowest, trade continue along the common border and over Lake Victoria, that once relations normalized was easily reformalised in the 1980s.

If there is one country that has provided sustainable economic benefit to Uganda it has to be Kenya. Their demand for food alone is slowly transforming our agriculture from the limbo of subsistence it has been stuck in to more commercial enterprise.

We have had a few moments of madness in the past.

In 1976 Idi Amin decided it might be a good idea to revisit an old map of the region which had the Ugandan border starting at the Kenyan Rift Valley.  Kenya’s Jomo Kenyatta – father of the current president, massed his troops on our common border and swore, “Wacha ajaribu, atatutambua!” (Let him try and he will find out who we are).

A second time was at the end of 1987 when there was shoot out at the Busia border, that led to a border shut down for a few weeks. Both countries traded accusations with Uganda accusing Kenya of habouring anti-government rebels and Kenya claiming its neighbours troops had crossed onto their side.

Speculation mostly unproven, was that Kenyan commercial interests were unimpressed about noises from Kampala pushing for a resuscitation of our industrial capacity so as to wean ourselves away from Kenya’s manufacturers. Kisumu’s industry built up during the 1970s was targeted at supplying Uganda.

In both instances sanity prevailed quickly because there were real economic interests at stake beyond brotherly love.

"It has been proven time and time again, that trade relations are the more sustainable glue that holds communities together and prevent wars...

The Europeans put a stop to centuries of fratricidal conflict after the second world war, with the creation of the European Coal and Steel Community, the precursor to the current European Union, which has allowed the free movement of goods, service and people.

This has had the effect of creating specialisations, with countries doing away with what they cannot produce competitively, choosing to import what they don’t produce and export their surpluses. This interdependence means war or even diplomatic rows have little fuel to sustain them.

The opening up of our markets will come with some short term pain as some industries are outcompeted by more efficient ones across the border, as is already happening. But as suggested above it will sharpen our businessmen’s sense of what they can produce competitively, so that they specialize, scale up their operations and gear up to supply our neighbour’s $75b economy’s needs.

There are those who will argue that our industries will need protection as they are still in their infancy, they will say that is how industries elsewhere survived. What they do not talk about is the opportunity cost in effort, resources – human and financial, that will be expended in ensuring that these uncompetitive industries stay afloat.

"If there are public funds to be spent they will be best employed helping uncompetitive companies retool or wind up, than subsidizing them to stay afloat, because as we have discovered they can’t seem to wean themselves off the subsidies once they have started to enjoy them...

The people of the two countries will be the eventual winners working for competitive sustainable companies and enjoying better goods and service in return.