Apparel / Textiles & Accessories

The East African Community countries decided to increase import tariffs by 35% on some products of non-member countries from July 1st, which is a resolution passed by the Council of Ministers of the Community on May 5th this year.

East African Community member countries have decided to impose high tariffs on important commodities such as meat, grains, beverages and textiles to protect local industries from competition: dairy and meat products, grains, cotton and textiles, steel, cooking oil , beverages and spirits, furniture, leather goods, cut flowers, fruit, as well as nuts, sugar and confectionery, coffee, tea and spices, textiles and clothing, head gear, ceramic products and paints, etc.

The East African Community Customs Union Protocol establishes a 3-level common external tariff, 10% on intermediate products and 25% on finished goods, with no increase in taxes on raw materials and capital goods.

Kenya, Uganda and Tanzania proposed a common external tariff rate of 35%, while Burundi and Rwanda proposed a common external tariff rate of 30%. The position of South Sudan, one of the least industrialized countries in the region, has yet to be determined.

The researchers believe the decision will backfire on the region, given the limited ability of local industries to meet booming demand at a time of global food crisis.

According to the Center for Economic Policy Research, a newly established think tank in Uganda, the country's demand for edible oil is 120,000 tons, while domestic production is 40,000 tons, indicating that the country does not have enough capacity to produce and meet local demand for some of these products. The think tank noted, “Import tariffs may not have a significant impact on the value of imports, especially for a small economy like Uganda, but rather a loss of welfare. This is because tariffs raise the price of imported inputs, This in turn increases the price of locally produced goods.”