The home page for the Kenya high commission in Tanzania website has a statement on the bilateral relations between the two countries as pursuing similar foreign policy objectives. Under several international forms, including the African Union and the East African Region, the statement says the two countries are committed to maintaining close relations under the rule of law, fundamental freedom, social and economic order and good governance. If the recent reports of diplomatic issues on coronavirus testing and border closures are anything to go by, it is ironic that the commission claims to be in pursuit of economic and financial market freedom.
Border closures put question marks on the perceived commitment of the two countries towards each other as trading partners, port gateway to the rest of East Africa and beyond. There is a need for the commission to act towards meeting its economic cooperation focus on liberating the economic system and maintaining open markets. Actions by the Kenyan president to close the border have resulted in retaliatory actions by his Tanzania counterpart by banning cargo trucks sending food prices up in the Kenyan market.
Strained relations between the two nations threaten the economic viability of business and citizens in the two countries as well as in other East African countries. Officials in Tanzania are on record urging their compatriots not to buy Kenyan goods as well as the need to hike prices for goods exported into Kenya. The prices of onions from Tanzania have since shot up 38 percent to Kenyan shillings 150 per kilo in just four months. The strained relations, arguably a show of might between the two head of states, and its consequences is the question of socio-economic impacts.
Whose loss is it anyway?
Closure of borders implies that the movement of goods and services is limited and with the urgency to trade, finding alternative markets can in the short term be difficult. Economies running into armed and bureaucratic border control tend to collapse, an understatement given the expected suffering of consumers and producers alike. It would therefore be wise to conclude that there is unlikely to be a winner between the two countries that have nearly balanced trade. In 2019, Kenya imported goods worth Ksh 23.3 billion while exporting Ksh 23.7 billion with Tanzania forming Kenya’s largest market.
The closure of borders across between the two nations will have a devastating impact on the livelihoods of millions of citizens who depend on the cross border trade for livelihood and income. The possible collapse of demand and supply chains between the two nations and beyond will likely lead to the collapse of businesses and loss of jobs. Individuals, informal and formal business will be worst hit. If securing decent living for their citizens is not a priority, the two governments should be concerned about decreases in taxes. The two nations cannot afford to further strain the informal cross border trade that sustains the two countries and as transit routes to the outside of the region.
The cost of delay at closed borders, in loading and offloading, if the directives from Dar es Salaam are anything to go by. As products delay to reach the market, prices are bound to hike for the available products. Associated costs of food product waste and missed trade opportunities will continue to weigh down the countries even as they come to terms with the impact of the coronavirus. For the citizens and businesses in the two countries, the show of might is only a negative sum game.
Border management onwards
It is highly imperative that the two nations live up to the commitment to liberate economic systems and open up markets by engaging in urgent and constructive diplomatic talks. Maintaining fundamental freedoms to facilitate trade will require a separation of trade and political rows between the two presidents. It is critical that the two countries open borders and maintain the movement of cargo for trade purposes and economic well-being.
The two countries need to remain true to the East African community to focus on integrating the region by pursuing more open borders. This will require the elimination of non-tariff barriers between the two countries and open trade between the two nations to demand and supply forces. With the adoption of the African Continental Free Trade Area adding to the efforts of the East African Community, movement of goods between the two nations should be a basic exit and entry into the same domestic market.
Borders in Africa and their management are subject to complex socio-economic, demographic, environmental and political challenges. The arrival of the coronavirus has further exposed the vulnerabilities of leadership between the two East African nations. Avoidable conflicts between two countries that share more similarities than differences should not be the reason for collapse economics.
Musila Muoki is a seasoned writer on economics, governance and drug policies. He a Marketing and Communication Associate at Liberty Sparks. He can be reached on Twitter via @musilamuoki.