Numbers in Kenya's trade deal with Uganda do not add up

First it giveth, and then it taketh away. These are the only words that can aptly describe the recent deal reportedly cut by the government on importation of sugar from Uganda.

Against the backdrop of the much touted “bailout” of Mumias Sugar, the analogy of a man who tends to his lamb by day but allows a hyena to interact with the lamb at night is apt. There can only be one result and the supposed good intentions, by day, of such a man must be put into question.

The argument has been made that Uganda as a member of COMESA is entitled to export to Kenya, but this line of reasoning is negated by the fact that as recently as early this year, the Kenyan government sought yet another extension of COMESA safeguards on sugar imports from member states. It was clear then that exposing local millers to an influx of cheaper imports would be fatal. The safeguards allowed Kenya to limit the entry of sugar imports to 350,000 tonnes to plug the annual production deficit. The trade arrangements with COMESA were first drawn up in 2002, but Kenya has implemented few reforms meant to make its sugar industry competitive. I have argued previously that the holding back of the sugar sector in Kenya has been deliberate.

At any rate, looking at production and consumption figures, it is clear Uganda has only a small amount of surplus sugar to export to Kenya. Yet from our own experience with the ‘gold exports’ of Goldenberg, we know that a country can indeed export what it does not produce. It follows that what we will be importing will not be Ugandan sugar at all but more likely untaxed Brazilian sugar packaged as Ugandan.

Then there is the red herring issue of Kenya exporting beef to Uganda. According to a 2012 USAID funded study titled ‘End Market Analysis Of Kenyan Livestock And Meat: A Desk Study’ Kenyans consume an average of 15 to 16 kg of red meat (meat and offal from cattle, sheep, goats and camels) per capita annually, for a national total of approximately 600,000 metric tonnes of red meat per year. Cattle are the most important source of red meat, accounting for 77 per cent of Kenya’s ruminant off take for slaughter. Approximately 80 to 90 per cent of the red meat consumed in Kenya comes from livestock raised by pastoralists, with the remainder coming from highland dairy cattle. While Kenyan pastoralists account for the majority of Kenya’s meat supply, a significant portion (20 to 25 per cent) comes from livestock raised in neighbouring countries with significant livestock populations (Ethiopia, Somalia, Tanzania and Uganda), making Kenya a meat deficit country. We can therefore safely surmise that beef exports to Uganda which has per capita meat consumption less than half that of Kenya are a non-starter. They will be meagre and insignificant.

To be sure, Kenya’s production of milk is in excess of local demand. Exports are indeed possible. There is only the little matter of conflict of interest since we know that the largest player in the local processed milk industry is owned by the President’s family. In a stunning coincidence, it also turns out that Kakira Sugar in Uganda is also partially owned by President Museveni’s family. This is what has led many of us to suspect that it may well have been my milk for your sugar type of deal.

While counties like Bungoma stand to continue languishing in poverty as the mainstay of their economy is dismantled, Nyandarua, which produces the most milk, will prosper. The undercurrents are hard to ignore. It is now clear that despite flower girl MPs falling over themselves to laud the move, the Sh1 billion bailout given to Mumias Sugar was nothing more than a handful of maize grain to lure the chicken to slaughter.

The writer is an advocate of the High Court of Kenya