The World Bank has called for a review of the East African Community (EAC) grain trade policy so as to stop it from hurting some members.

In a newly released policy note, it states that some members are hurting from the EAC common market policy that restricts importation of duty-free maize.

The policy note, on the drought and food crisis in the region and the Horn of Africa, has called for a review of the EAC grain trade policy so as to reduce some members’ future vulnerability to spikes in food prices. Under the EAC agreement, Tanzania is one of the partners which sells maize duty free to Kenya and Uganda, but it imposes a 50 per cent duty on imports from other countries.

While signing the EAC common external tariffs treaty, the country identified maize as one of its sensitive commodities, giving it the right to request an alteration in the terms of trade relating to the product. The call mentions examples of neigbouring Kenya, which, it notes, experiences food deficit even in a bumper harvest year, yet the country levies import duty on grains that are only suspended on an ad hoc basis in times of crisis.

”The East African Community customs union partners also impose export bans on cereals when Kenya experiences a food crisis,” said the World Bank report. ”Given that Kenya is consistently a net importer of maize, a policy of restricting imports necessarily harms some consumers, who bear the additional tax burden,” it added.

The EAC member states had imposed an import duty on imports from countries outside the community, believing that it would be able to sustain its internal demand from local production. However, following Tanzania’s previous ban on exports to ensure its own food security and Uganda’s preference for the South Sudan market which offers better prices, the country has found itself having to import maize, which is its major food staple.

The policy note states that both the agriculture and trade policy distortions are compounding the drought’s impact. In November last year, the government lifted a maize export ban it had imposed allowing the free movement of grains across the region.

By ORTON KIISHWEKO, Tanzania Daily News

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