Although Kenya’s Foreign Affairs ministry says that all is well, it is fighting growing diplomatic tension with its neighbour behind the scenes, even as an isolated Kenya starts to chart its own path in the region.
Described as the “Bulldozer president”, Mr Magufuli is presiding over a change of government policy that looks at his nation’s priorities at the expense of the East Africa Community (EAC).
After he was elected, Magufuli started making far-reaching changes that won him instant admirers at home and abroad.
But it is only when he started making a policy shift that he caught Kenya’s attention.
First, Magufuli declared that Tanzanian companies should not import from Kenya anything that can be bought in Tanzania.
He later tightened the already stringent work permit requirements for foreigners working in Tanzania.
In May, Tanzania announced that it would reduce the amount of electricity it buys from Kenya by 67 per cent.
All these decisions did not rattle Kenya because they did not seem targeted at the country and were in line with its national economic interests at the time.
But shortly after, Magufuli upstaged Kenya on the pipeline deal with Uganda. This saw Uganda choose to build the Sh400 billion oil pipeline through Tanzania, leaving Kenya in the cold.
To make matters worse, Tanzanian officials seized passports of Kenyan officials among them Energy Cabinet Secretary Charles Keter who had gone to the country to rescue the pipeline deal in an embarrassing diplomatic scuffle that denied them access to the port of Tanga.
But ironically, a delegation from Uganda was allowed to proceed with their tour. This sealed the fate of the pipeline deal.
After it lost the deal to Tanzania, Kenya decided to go it alone and build its own pipeline. Kenya has since decided to transport its oil by road as it works on the pipeline.
As if taking a cue from Tanzania, Rwanda further muddied the waters after it announced that it was considering developing its railway line through Tanzania. Rwanda said this was cheaper and shorter than the route through Kenya.
This forced Kenya back to the drawing board, deciding to terminate the Standard Gauge Railway (SGR) in Naivasha or Kisumu after Rwanda pulled out of the flagship infrastructure project on the Northern Corridor.
“The former East African Community collapsed because of the mistrust between Kenya and Tanzania. The simmering differences never settled and what is happening right now is that the rest of the players see Kenya as domineering,” Israel Kodiaga said yesterday.
He says Magufuli has reignited these differences and Kenya has to rethink its diplomatic strategy.
“Tanzania is building a big port to rival Mombasa. Kenya must re-engineer its diplomacy to deal with what is going on,” said Prof Kodiaga.
But even before the dust settled on the pipeline and railway deals, Tanzania has pulled out of a trade deal that the EAC was negotiating with the European Union (EU), a move that is being seen in diplomatic circles as the last straw. It is this deal that has got Kenya most agitated.
Magufuli has skipped two consecutive meetings in Nairobi that Kenya was hoping to use to convince him to change his mind on the EU trade deal.
Insiders at the Ministry of Foreign Affairs describe Magufuli’s actions as bordering on economic sabotage.
A Kenyan diplomat who has been engaged in the talks says Kenya sees the move by Tanzania to lead the onslaught against the deal as “blackmail” motivated by malice.
“We see this as blackmail and it is aimed at increasing its share of exports to the EU at the expense of Kenya. The argument that the deal is not good for local industry is hollow because it is the region exporting goods at better terms,” the source said.
The diplomat said Kenya had done everything as required to see the deal through. “What is known as legal scrubbing was completed in September 2015 and all the contradictions in provisions were removed to ensure that the intended purpose and the spirit of negotiations was accurately captured. The agreement has also been translated into 23 official languages of the EU and Kiswahili,” the source said.
This comes at a time when the EAC was just recovering from the “coalition of the willing” nightmare, which at the time had Tanzania isolated.
After Tanzania pulled out, it emboldened other East African neighbours including Uganda and Rwanda, leaving Kenya on the table alone.
To try and rescue the deal, Kenya has decided to go it alone.
Trade Cabinet Secretary Adan Mohamed is in Brussels to try and lobby for Kenya to continue accessing EU market duty-free.
“This development poses a great risk to Kenya,” said Mr Mohamed.
The Market Access Regulation (MAR) will expire on October 1, 2016, meaning that Kenya risks exporting to the bloc at a higher cost.
Unlike Kenya, the rest of the East African countries have nothing to lose if they do not ratify the deal the known as the Economic Partnership Agreement (EPA) by the October 1 deadline.
EPAs are trade and development agreements negotiated between the EU, African, Caribbean and Pacific partners engaged in regional economic integration processes.