Kenya and Uganda’s ongoing trade dispute has escalated with Kampala initiating legal action against Nairobi at the regional court, citing Kenya’s refusal to provide its pipeline for oil transfer.
This latest clash adds to the history of trade controversies between the neighbouring nations, with the current focus on a dispute over milk, as Kenya restricts imports from Uganda.
Uganda has filed a case against Kenya at the East African Court of Justice after Nairobi denied a license for its government-owned oil marketer, the Uganda National Oil Corporation (UNOC), to operate locally and manage fuel imports destined for Kampala.
In November, Kenya declined to grant UNOC a local oil marketer license, prompting Uganda to take the matter to the regional court last month, seeking Kenya’s approval for the operation.
Uganda alleges that Kenya reneged on a commitment made in April of the previous year to support Kampala’s independent fuel imports, starting from the present month.
Kenya’s Ministry of Energy and the Energy and Petroleum Regulatory Authority (EPRA) imposed specific conditions for UNOC to obtain the license, but according to the Ugandan Attorney-General, UNOC considered these requirements an unwarranted hindrance to its petroleum policy.
It stressed that the petroleum products in question were solely transit goods not intended for Kenya, as outlined in court documents.
Earlier this year, Uganda’s dairy industry faced restrictions as the Kenya Dairy Board (KDB) denied export permits for powdered milk.
Other licensed products experienced delays in reaching the market. Brookside Dairy Uganda expressed concerns about the non-issuance and occasional delays of export permits by KDB.
Samson Akankiza, the executive director of DDA, suggested that Kenya might be using these measures to protect its local market, noting a reduction in powdered milk exports despite Kenya lifting an earlier ban imposed by KDB.
Although a fact-finding delegation from Kenya was supposed to visit Kampala last year, this has yet to occur.
gandae@businessdayafrica.org