Week in review: Trade disputes, social media tax, African internet registry

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Trade disputes between Uganda and her neighbours are putting even more pressure on treaties signed under the East African Community (EAC). From Rwanda’s blockade of its border to non-tariff barriers imposed on Ugandan goods by Tanzania and Kenya, it is evident that the substantive parts of regional cooperation, in as far as trade is concerned, remain on paper or are implemented only when they cause little political discomfort.

In the past two weeks, Kenya has seized milk worth about Shs1.3bn originating from Uganda. Kenyan police and the Kenyan Bureau of Standards justified the seizures on account of non-payment of taxes and that the milk was counterfeit. But, as Uganda’s foreign affairs ministry noted in a protest letter, the relevant Kenyan authorities cleared the milk before it entered the country.

Interestingly, the milk products targeted by the Kenyans are made by one company, Pearl Diaries. Brookside Limited Uganda, the local subsidiary of the Kenyan dairy processor, is not affected, probably because the family of Kenya’s president owns a stake in it and Uganda’s President Museveni supplies milk to it.

Uganda’s milk exports have driven the increase in EAC milk exports to Kenya, from three million litres in the first nine months of 2016 to 110.7 million litres in the same period last year. This prompted the Kenyan government to proposed a 16% tax on Ugandan milk products, which is against the EAC customs union protocol, although this was later dropped; instead, the tax was imposed on milk imports from outside the EAC.

Ugandan officials say Kenya’s official explanations for the seizures are smokescreens. Instead, the actions of Kenya and Tanzania amount to good old protectionism. Over the years, the dynamics of trade between Uganda and Kenya have changed a lot; many of the goods that Uganda used to import from Kenya are not only now manufactured locally but are also exported there too. As a result, Kenyan manufacturers must contend not just with the lost market but also the cheaper Ugandan goods (since costs of production are cheaper in Uganda).

In related news, foreign ministry officials were asked not to comment publicly on Uganda’s strained relationship with Rwanda as the two countries seek a diplomatic solution. One of the issues the ministry is not commenting on is the disappearance of a Ugandan software developer in Kigali, Rwanda, last December.

Kenya wants Uganda to stop taxing its products. Kenya’s trade minister said Uganda should keep its promise to remove excise taxes on pharmaceuticals and alcohol manufactured in Kenya. The Kenyans allege that the taxes are discriminatory and against the spirit of the East African community. However, Uganda denies making any such promise and says it imposes the 13% duty on local products too. Kenya promised to retaliate if Uganda does not remove the tax.

Ugandan informal traders arrested in Rwanda. Rwanda’s diplomatic standoff with Uganda which saw Kigali close its borders last February has led to a large reduction in Ugandan exports to the country; for example, in October 2019 formal exports to Rwanda were $0.7m versus $19.4m a year earlier. The grass in this standoff, however, are the border communities in the two countries who were accustomed to free passage between both sides of the frontiers. Three Ugandan traders from Kabale district were arrested in a market in Rwanda’s Burera district where they had gone to sell sorghum, while five fled back to Uganda. The arrest is the latest in a series of similar actions by Rwanda over the past eleven or so months. Rwandan authorities usually charge individuals arrested in such circumstances with smuggling.

Outgrowers are growing more sugarcane than factories can buy. A bumper harvest has led to an excess supply of sugarcane at sugar mills in Eastern Uganda, which is hurting small producers the most. Farmers say the mills are taking long to buy their sugarcane and, when they do, it is at lower prices. The solution, according to the farmers, is more factories they can sell sugarcane to – this is despite established sugar refiners reporting excess stock. (Otherwise, the farmers could shift to growing other crops which would go a long way in fighting the food insecurity in the region.)

Meanwhile, land taken from communities in northern Uganda by the government and handed to the Madhvani group of companies for sugarcane plantations has been overrun by pastoralists. The land, in Amuru district, was acquired contentiously by the central government several years ago.

URA wants social media tax imposed on data purchases. The social media tax could become compulsory if a proposal by the Uganda Revenue Authority to levy it on internet data purchases is adopted by the government. Currently, the tax is collected through a daily charge of UGX200 ($0.054) to access social media websites and platforms. The authority’s commissioner general, Doris Akol, told a parliamentary committee that the use of VPNs has drastically lowered what the government collects from the tax.

Chief Justice, five other judges to retire this year. Bart Katureebe, the chief justice, will retire in June after he reaches retirement age. His job was advertised this week. Katureebe has served as chief justice since March 2015.

Stella Nyanzi won an international free speech award. The academic and activist, currently imprisoned in Luzira Prison for acid-tongued comments directed towards President Museveni and his mother, was awarded the 2020 Oxfam Novib/PEN International award for freedom of expression. A PEN International statement said there is need for writers to “be able to criticise, parody, and mock at the highest levels” and recognised “the work she has done for women, civil society, and in the defence of free expression.”

Eight new ministers were sworn in. The ministers were appointed by President Museveni in a cabinet reshuffle last month. Jackson Kafuuki, who was appointed deputy attorney general, was not sworn in because Parliament’s appointment committee did not clear him.

President Museveni ruled out decriminalising homosexuality. Activists want the government to amend the law criminalising homosexuality. But President Museveni said his government has “more urgent things to do” and has a “cultural way of looking at that phenomenon”. According to the president, Western actors are provoking ” the big majority [in Uganda] by fronting homosexuality as if it’s something appreciated.”

Dozens of UAE-bound girls stopped in Nairobi. The group of 96 girls, aged between 14 and 18 years, were stopped at Nairobi’s Jomo Kenyatta International Airport on their way to the United Arab Emirates. The girls were from Karamoja sub-region. There are close to 150,000 girls from Uganda working as domestic workers in the Gulf countries, according to government statistics.

Andrew Kitaka to stay on as acting KCCA executive director. The president extended the Kampala Capital City Authority acting executive director’s tenure for six more months. Before he assumed the role, he served as the director of engineering and technical services, a position he still holds. Mr Kitaka replaced Jennifer Musisi in December 2018.

Television set stolen from Jinja’s Central Police Station. Nine officers have been charged with neglect of duty and theft of the 40-inch TV set, which was stolen from the station’s reception. A detective at the station leaked news of the theft to the media after the force tried to keep it secret.

There was a gown shortage at Makerere. Ahead of the public university’s 70th graduation, held this week, Makerere said it had failed to procure enough gowns for its graduating students. The tender to supply the gowns was given to a local entity which procured them from China. That the gowns were bought from China kicked up another storm and is being investigated by the Public Procurement and Disposal of Public Assets Authority.

Investigation detailed corruption at the heart of Africa’s internet registry. A top employee at the African Network Information Centre (Afrinic), who happens to be Ugandan, was leasing dormant IP addresses to spammers and online criminals. The investigation implicated Afrinic’s former policy coordinator, Ernest Byaruhanga, who resigned last October, a day after the investigation was made known to him. Still, mismanagement and corruption at Afrinic are deep-rooted; different CEOs and boards have been implicated in dodgy activity such as misdirecting funds.

DRC army captured ADF’s headquarters. An offensive against the Islamist rebel group, originally from Uganda, led to the capture of its headquarters at Madina in North Kivu province. A tweet by the Democratic Republic of Congo’s prime minister’s account said Madina was one of the Allied Democratic Forces’ last bastions. DRC announced an operation against rebel groups in the country’s east last October.

MP charged with ten-year old offences. Theodore Ssekikubo, the Lmemiyaga County representative in Parliament, was arrested on 10 January after he and a group of herders tried to forcefully enter a cattle market in Lwemiyaga town. The farmers said they wanted to sell cows, in contravention of a quarantine in the district in response to a foot-and-mouth disease outbreak. In addition to assault and inciting violence, Ssekikubo faces a charge of attempted murder over an offence he is accused of committing in 2010. The police say the charge had earlier been withdrawn due to lack of evidence.