Tanzania Risks Another Trade War With Kenya Over Meat and Eggs Tariffs

In Summary

• New tariffs imposed by Tanzania on Kenyan goods have led to a drop in Kenya's export earnings, reigniting trade tensions between the two countries.
• Senators are questioning the SHA system’s procurement, funding, and private sector involvement in handling Kenya’s health data.
• President Ruto has fired CS Muturi after questioning his past performance as Attorney General.
• Kenya's public sector wage bill continues to grow, challenging efforts to reduce government spending.
• The Court of Appeal has allowed university students to apply for scholarships and loans after suspending a High Court ruling that had blocked the new funding model.
• The Treasury is reconsidering its approach to Kenya Airways’ revival, linking its future to an investor upgrading JKIA.
• NCBA Group raised its dividend to Ksh5.50 per share as net profit grew 1.9% to Ksh21.86 billion.
• MPs say the 90-day limit makes it difficult to conduct thorough audits, potentially allowing misuse of public funds.
• KUPPET has rejected TSC’s promotion criteria, saying it favours some counties while unfairly affecting long-serving teachers in high-population areas.

Tanzania has introduced new protectionist tariffs on Kenyan goods such as eggs, dairy, meat, and confectionery, disrupting the East African Community (EAC) Customs Union’s rules and causing a Ksh4.2 billion drop in Kenya’s export earnings to Tanzania. The Business Daily reports that the new levies, including a Ksh50 per kilogramme sugar levy on confectionery and a 25% excise duty on hatching eggs, make Kenyan products more expensive in Tanzania, hurting their competitiveness. The Kenya Association of Manufacturers (KAM) has expressed concerns that these discriminatory taxes are undermining regional trade and are a violation of the EAC protocol, which allows for free movement of goods within the bloc.
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Senators have launched investigations into the Ksh104.8 billion Social Health Authority (SHA) system, questioning its transparency and ownership. According to The People’s Daily, the inquiry focuses on the Integrated Healthcare Information Technology System (IHTS), which is part of President William Ruto’s Universal Health Programme. Lawmakers seek to uncover details about the tendering process, contract terms, and the involvement of private entities, particularly Safaricom PLC, which leads the consortium despite having only a 13 per cent stake. Concerns have also been raised over undisclosed fees, the exclusion of alternative systems, and the transfer of funds to an escrow account. The Ministry of Health will be required to explain these issues, including the Ksh7 billion allocated for training and the system’s operations outside the Consolidated Fund.

President William Ruto has dismissed Public Service Cabinet Secretary Justin Muturi and nominated Mbeere North MP Geoffrey Ruku as his replacement, as reported by The Star. The move follows Ruto's public criticism of Muturi’s performance as Attorney General, calling him "fairly incompetent" in handling legal matters, including the establishment of the Waqf endowment fund. Muturi, who has been openly critical of the government and skipped Cabinet meetings, stated that he had formally requested to be excused from attending until discussions on abductions and extrajudicial killings were prioritised. In response to Ruto’s remarks, Muturi defended his record, clarifying that the Waqf Act does not establish a Muslim Endowment Fund but rather provides for individual contributions.

Thousands of university students can now apply for government scholarships and loans after the Court of Appeal suspended a High Court ruling that had nullified the new university funding model. In a report by The Standard, the ruling allows the government to process funding applications and appeals, benefiting over 246,000 students who attained university entry marks in the 2024 KCSE exams. The court also directed the Attorney General, Helb, and KUCCPS to publicise the funding framework within 14 days and ensure students are informed that the model remains under legal challenge. The suspension follows protests by students demanding stipends after funding delays caused by the legal dispute.

The Treasury has slowed its search for a strategic investor for Kenya Airways and is now considering a turnaround plan that ties the airline to an investor upgrading Jomo Kenyatta International Airport (JKIA). Treasury Principal Secretary Chris Kiptoo admitted the search for an equity partner had not succeeded, prompting the government to explore new options similar to Dubai’s model, where an investor operates the airport and supports the airline as an anchor tenant. The plan comes as Kenya Airways returned to profitability in 2024 with a Ksh5.4 billion net profit, aided by a stronger shilling and Treasury taking over its dollar-denominated loans. However, Kenya failed to meet the International Monetary Fund (IMF) condition to secure an investor, and earlier this month, the Treasury was forced to pay Ksh19.3 billion to commercial banks for Kenya Airways’ defaulted loans, as reported by The Business Daily.

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In a report by The People’s Daily, the Kenya Union of Post Primary Education Teachers (KUPPET) has criticised the Teachers Service Commission (TSC) for allocating 19,000 promotion slots equally across all counties, arguing that it disadvantages counties with a high number of teachers awaiting promotion. KUPPET leaders, including Deputy Secretary General Moses Nthurima and Chairman Omboko Milemba, claim the system unfairly benefits counties with fewer teachers, such as those in North Eastern, while leaving teachers in counties like Kiambu, Kakamega, and Nairobi stagnated for years. The union has called for a fairer pro-rata system and urged TSC to halt the promotions until a just process is established.

The national government's expenditure on salaries and wages increased by 9.36 percent to Ksh293.34 billion in the first half of the 2024/25 financial year, marking the fastest growth in five years. This rise occurred despite President William Ruto's administration imposing a freeze on hiring and salary raises to control public spending and fund development projects. The freeze, which also included a halt on new recruitments, except in key sectors like security, education, and health, was part of efforts to reduce the wage bill. According to The Business Daily, further pressure on the wage bill is expected with the conversion of 46,000 teachers’ contracts into permanent positions and the creation of seven new state departments.

As reported by The Dail Nation, NCBA Group has increased its dividend by 15.8 percent to Ksh5.50 per share, bringing the total payout to Ksh9.06 billion, following a 1.9 percent rise in net profit to Ksh21.86 billion for the financial year ended December 2024. The final dividend of Ksh3.25 per share, payable in May, adds to the Ksh2.25 interim dividend issued in September. Despite a slight dip in net interest and non-interest income, reduced operating expenses, including a 40 percent cut in credit loss provisions, contributed to profit growth. Regional subsidiaries in Uganda, Tanzania, and Rwanda posted a combined profit of Ksh3.2 billion, while non-banking units recorded a 36 percent rise in earnings to Ksh1.2 billion.

Lawmakers have raised concerns over a recent High Court ruling that requires Parliament to debate and act on audit reports within 90 days, arguing that the timeframe is too short to properly scrutinise financial records. The ruling could allow governors, Principal Secretaries, and other officials to evade accountability for billions of taxpayers’ money. Senators and MPs say the heavy workload, which includes reviewing audits from ministries, parastatals, and counties, makes it impossible to meet the deadline. The Senate has applied for a review of the decision, with a ruling expected on May 6, 2025, as reported by The People’s Daily.