Many Kenyans shocked by sugar deal with Uganda | Africa | DW | 12.08.2015
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Many Kenyans shocked by sugar deal with Uganda

Kenyans have reacted to trade deals with Uganda with shock and skepticism. A number of deals were reached during a three-day state visit to the neighboring country by Kenyan President Uhuru Kenyatta.

One of the deals agreed by President Kenyatta and his Ugandan counterpart Yoweri Museveni will allow Ugandan sugar back on to the Kenyan market, ending a long-running dispute over the trading of the commodity across their common border. In 2012, Kenya slapped a ban on sugar imports from Uganda when claims emerged that traders from that country were repackaging cheap sugar from the Common Market for Eastern and Southern Africa (COMESA) for resale in other markets.

Kenyan opposition leader Raila Odinga was quick to criticize the new deal, saying it could bring about the collapse of local millers.

"This deal on sugar is sour," Kenya's Daily Nation quoted Odinga as saying. "It comes at a time when Kenya's leading sugar manufacture Mumias Sugar is struggling to get back on its feet. Sugar cane farmers across the country are equally struggling as a result of lack of payments."

Raila Odinga

Raila Odinga says Kenyans need to know the full details of the trade deals

The government had earlier allocated one billion Kenyan shillings (8.9 million euros, $9.9 million) to help Mumias - money which may have been spent in vain if, as critics predict, the market will now be swamped by cheap sugar from Uganda.

Odinga also questioned a beef and dairy products pact, saying that Kenya could not produce enough for local consumption let alone for export. He called on President Kenyatta to release details of the deals so that members of the public could make up their own minds.

Deal 'could boost competition'

Speaking to DW, opposition member of parliament Fatima Ibrahim Ali described the agreement with Uganda as "very unfortunate." She said Kenya (which is East Africa's largest economy) was able to fulfill its sugar requirements through domestic production "and even has a surplus to export to Uganda."

Margaret Kerubo, a sugar cane producer from western Kenya asked: "Why should we get sugar from Uganda when we are farming sugar here in Kenya? It is not fair."

Nairobi tradesman Abdallah Juma said Kenyan producers had previously called on the government to help some companies that were in difficulties but instead the government had taken the decision "to import cheap sugar."

More optimistically, 38 year-old teacher Jonathan Muthengi hopes the deal will open up competition in the sugar sector that would benefit consumers, while businessman John Mbiyu believes "the business community will definitely benefit," since the deal would protect Kenya against the effects of a shortage of domestic sugar production.

But, "from an economic point of view it does not make sense to have this agreement," independent economic analyst Janet Okatch told DW's Nairobi correspondent. "This agreement harms farmers in a big way – when you have cheap sugar imports, of course our own sugar will be too expensive for the market."

Uhuru Kenyatta addressing the Ugandan parliament

President Kenyatta adressed the Ugandan parliament during his three-day visit

Security concerns

There have also been mixed reactions to the news that the two leaders had reached agreement on the route for a pipeline intended to take crude oil from both countries to the Kenyan coast.

A statement said Kenyatta and Museveni had decided in favor of the northern route from Hoima, near Uganda's border with DRC, via Lokichar in western Kenya to the Kenyan port of Lamu which is under construction.

Lamu is not far from the border with Somalia and security experts had expressed concerns for the safety of a pipeline there, prompted by attacks by al-Shabab militants in the region. However, Bashir Hangir, communications officer for the Directorate of Petroleum in Uganda said the two countries had examined feasibility studies and had come to the conclusion that the northern route was the least costly and most viable. "The deal unlocks the potential of Uganda's oil and gas export options," Hangir told DW, adding that further financial and security aspects had yet to be discussed. The pipeline currently has a price tag of 400 billion Kenyan shillings.

A second proposed route further south ending in the port of Mombasa was rejected.

A map showing Uganda, Kenya and Somalia

The new pipeline will run close to the border with Somalia

Uganda has an estimated 6.5 billion barrels of crude in fields in the west of the country, while Kenya has around 1 billion barrels.

Joseph Njoroge, principal secretary at the Kenyan Ministry of Energy and Petroleum, said in June that once a decision on the route was taken, construction of the pipeline could be completed by 2019.

James Shimanyula contributed to this article

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