President Paul Kagame has said that regional integration and close partnership between members of regional economic communities can fast-track development and prosperity for individual nations. Kagame was yesterday speaking at the Global Business Forum on Africa held in Dubai, United Arab Emirates. The session was moderated by John Defterios, the emerging Markets anchor at CNN UAE. The Head of State noted that regional integration in Africa would enable countries to get past divisions that have long prevented the continent from being as prosperous at it should. Citing the example of the East Africa Community integration, Kagame said the initiative has yielded positive impacts such as free movement of people, customs union and joint infrastructure projects. “If you look at the East African region, even more progress has been realised, for example, in the area of customs union, integration in the area of infrastructure that bring the countries of the East African Community together, whether it is telecommunication in the area of realising one area network, where there are no roaming charges,” Kagame said. Other impacts, he noted, include working together to implement reforms that cover aspects such as the economy and security that’s necessary. EAC integration has, among others, seen the liberalisation of free movement of people, goods and services, consequently increasing opportunities for the over 160 million citizens of the bloc. Four countries in the bloc (Kenya, Uganda, Rwanda and South Sudan) in 2014 rolled out the One Area Network, scrapping calls roaming rates which brought down the cost of...

On October 12th the New York Times brought the discussion of second hand clothing in East Africa to the mainstream. Unbeknownst to most in North America, the United States trades millions of dollars worth of used clothing to East African countries essentially tax free. African countries export duty free products to the United States in return. The bilateral trade agreement that makes this transaction possible, the African Growth Opportunity Act (AGOA), is the center of a controversy roiling African-US trade relations. Six East African countries (EACs) created a pact in Spring of 2017 that would increase tariffs on imported used clothing from the US with the eventual goal of an outright ban by 2019. By June, a US lobby, the Secondary Materials and Recycled Textiles Association (SMART), filed a petition with the United States government against limiting clothing imports. The grounds for this petition were that a ban on used clothing would induce disastrous economic effects for tens of thousands of American jobs as well as potentially violate the terms of the AGOA. The United States Trade Representative initiated an “out-of-cycle” review of three out of six countries – Rwanda, Tanzania, and Uganda – to assess the allegations made by SMART on June 20th. Rwandan President Paul Kagame and Finance Minister Claver Gatete fiercely defend the used clothing ban despite threats of sanctions from the United States. The goal, according to the finance minister, is to increase local production and “minimize the health risks that come with the used product”. Kagame also doubled down on...

A number of ports development projects across Africa may be pointing to a positive outlook for capacity expansion in the region, but the myriads of uncertainties in economic growth become a limiting factor. The United Nations in its new report tagged: "Review of Maritime Transport 2017," is optimistic that the projects, when realised, would aid trade facilitation in the region. However, projects such as the $1.5billion Lekki Deep Seaport in Nigeria, and the proposed $2.5billion Badagry Deep Seaport are currently facing challenges ranging from economic considerations to inconsistency in policies. The United Nations Conference on Trade and Development (UNCTAD) report noted that container port volume in Africa dropped by 1.2 per cent in 2016, but will grow by 1.1 per cent in 2017, and by 2.5 per cent by 2018. It, however, forecast that world seaborne trade will increase by 2.8 per cent in 2017, with total volumes reaching 10.6 billion tonnes. Projections for the medium term also point to continued expansion, with volumes growing at an estimated compound yearly growth rate of 3.2 per cent between 2017 and 2022. UNCTAD noted that against the situation in some regions, the projected demand is expected to surpass planned capacity growth (East Coast of North America, China and Oceania). "Capacity expansion is expected to outweigh demand growth in Northern and Western Africa, Southern Asia and the Gulf Coast of North America, sighting Drewry Maritime statistics. "Assuming all planned projects are implemented, it is likely that capacity growth in Africa and Southern Asia...

The East African Community (EAC) and Central Corridor Transit Transport Facilitation Agency (CCTTFA) in collaboration with the World Bank will meet on 2 and 3 November .The aim will be to look into how the project on Lake Tanganyika Transport Program should be supported. The World Bank has committed approximatively US 500 million to the support of the Lake Tanganyika Transport Program. Liberat Mfumukeko, the EAC Secretary General, says the community is committed to delivering an integrated transport system and the Lake Tanganyika Program in particular. “Successful implementation of the Lake Tanganyika Transport program is expected to result into numerous benefits for the riparian states and the communities around the Lake”, he says. Among the benefits include the enhancement of inland waterway transport and connectivity on Lake Tanganyika; improving the navigational safety on Lake Tanganyika and promotion of security through cross border trade as well as reducing the transport costs for goods and passengers for the Lake Tanganyika Basin countries through improved infrastructure and logistics services. It will also be an opportunity to improve connectivity of the Lake ports and the land-locked countries with the port of Dar es-Salaam through the central corridor allowing people and goods to move more easily and efficiently within the region. Dieudonné Dukundane, Executive Secretary of the Central Corridor Authority, says that if one compares transport fees paid in other countries, Burundi is still paying a high rate estimated at between 30 and 40% of the merchandise values. “This constitutes a big challenge to the...

A majority of East African economies are yet to make significant reforms to create an easier environment to do business, a new World Bank report shows. Only Rwanda and Kenya made notable changes to improve doing business in the region, moving more than ten places up globally, according to the World Bank's Doing Business 2018 report. Rwanda remains the easiest place to conduct business and is ranked 41 from 56 last year. Kenya, East Africa’s largest economy, moved 12 places up to position 80 from 92 last year. The two countries, which rank second and third after Mauritius (25) in sub-Saharan Africa, eased paying and filing taxes by establishing online platforms and dealing with construction permits by eliminating licence fees in the case of Kenya and introducing risk-based inspections in Rwanda. Kigali, the report notes, also improved in corporate governance, online registration of property transfers and allowing public access to judgements on commercial cases. Nairobi’s reforms included merging procedures for business registration, reliable electricity with specialised teams to restore outages, access to credit information and reducing time in cross-border trade by enabling electronic submission of customs entries through the single window system. Laggards Despite impressive economic growth, Ethiopia dropped ranking from 159 last year to 161. The country only reforms included removing the requirement to open a bank account for company registration and eliminating the paid-in minimum capital requirement. It also strengthened its customs authority to better cross-border trade. Tanzania increased land and property registration fees and was ranked 137 dropping five...

Buses plying the Mombasa-Nairobi route could be headed for another round of loss-making after Kenya Railways Corporation launched a morning inter-county train Wednesday. The Madaraka Express train that has been operational since June will now make stops at Athi River, Emali, Kibwezi, Mtito Andei, Voi, Miasenyi and Emali stations twice a day. The stops are in Machakos, Makueni, Taita-Taveta, Kwale and Kilifi counties. The express service has been rescheduled for 3.30pm daily. Using the train is cheaper than bus and matatu service. Bus fare from Voi to Mombasa is Sh300 but one will only use Sh210 by train. DEMAND Mombasa-Mariakani fare is usually Sh100 but the train charges Sh50. From Nairobi to Voi, bus passengers pay Sh1,000 as opposed to Sh510 on the train. Transport Cabinet Secretary James Macharia, who flagged off the first inter-county train said there has been an increased demand for transport provided by the Chinese built Sh327 billion standard gauge railway. “The train has been in operation for more than five months and we are also in the process of rolling out the second phase of construction connecting Nairobi to Naivasha which will be completed in about 36 months,” the minister said. The booking window has also been increased to seven days from three.” UPGRADE He added that the ministry would upgrade access roads to the nine stations in the coming six months. Matatu Owners Association chairman Simon Kimutai said passenger numbers for high capacity buses could be reduced but business would thrive for the small operators. “The...

The new service that commenced on Wednesday, Nov 1, will be an express train set to depart the Nairobi and Mombasa Termini at 3:30 pm. The existing morning train has now been transformed into an inter-county train service, departing at 8am from both Nairobi and Mombasa termini, and stopping at all the seven intermediate stations. Infrastructure Cabinet Secretary James Macharia says that the new service is part of measures to increase access and lower the cost of transport across the country. “Since its launch five months ago, the Madaraka Express has moved over 337,000 passengers between the port city of Mombasa and Nairobi, with the number growing daily. We are currently performing at over 90 percent with regards to passenger numbers, and by introducing this additional service we expect to measure up to the type of service the public has demanded since we launched the passenger service in June; just one of the key highlights we have had as a ministry even as we seek to improve the overall transport sector,” he said. He said by introducing this second train, it will be more difficult for middlemen to take advantage of Kenyans by doubling the availability of train tickets as well as the daily train capacity. “Over time, KR and China Roads and Bridges Corporation have introduced a number of initiatives that we hope, have made Madaraka Experience better. They have introduced various ticket booking platforms, meaning you no longer have to physically visit the termini to purchase your tickets;...

The government of Tanzania has announced a completion date for work on the Bagamoyo megaport, one of a number of infrastructure projects that are expected to lay the foundations for the country’s economic development. The fate of the scheme has been in doubt since it was put forward in 2014 as a 20 million teu (twenty-foot equivalent unit) container port, variously priced at between $7bn and $11bn, and due to be completed in 2017. Now Stella Manyanya, the deputy minister for trade, has told the Tanzanian parliament that the first phase of works will be done, and operations will commence, sometime in 2020. The port is being financed by China and Oman’s sovereign wealth fund, the State General Reserve. It is being developed by Hong Kong-based conglomerate Merchants Holdings International. As well as the harbour and 8,000ha port, Bagamoyo will be the site of a 1,700ha special economic zone which, it is hoped, will have a broad range of manufacturing facilities including a manure-processing plant to be paid for by Oman. The plan is that when fully developed in 2025 the port will have taken over from Dar es Salaam as Tanzania’s main connection with the global economy. Dar suffers from congestion and other inefficiencies that the World Bank recently estimated were costing Tanzania $2.4bn a year. Lu Youqing, China’s former ambassador to Tanzania, has been particularly bullish about Bagamoyo’s prospects. In February he claimed the port would turn Bagamoyo into the African equivalent of Shenzhen, the city that was declared a...

EAST African Community (EAC) moves towards surmounting financial control to improve management of donor-funded projects amid shrinking contribution of development partners (DPs). EAC Secretary General Ambassador Liberat Mfumukeko (pictured) told the first EAC Development Partners Consultative Forum here yesterday that the secretariat has already recruited the manager for the Partnership Fund, with the view of enhancing fund management and efficiency. "The Partnership Fund is key in coordination of EAC development partner support. It has continuously played critical role in supporting activities to accelerate EAC agenda since its inception a decade ago," Ambassador Mfumukeko said, hinting that the fund manager has already reported for work. The EAC mission is to widen and deepen economic,political, social and cultural integration to improve the quality of life of all citizens in the region through increased competitiveness, value addition to agricultural produce, trade and investments. The community secretariat is responsible for fund mobilisation from DPs and other sources for project execution. Ambassador Mfumukeko said that the EAC has significantly strengthened its financial systems and procedures. The PF was established in 2006 to coordinate and channel contributions by DPs to projects and programmes towards regional integration and socio-economic development as well as facilitate harmonisation and alignment of their support to the EAC. Head of Corporate Communications and Public Affairs Department at the EAC Secretariat Owora Othieno said the new unit will deal with administration of the fund, communication with fund members, monitoring and evaluation of the achievements, budgeting, financial control, auditing and supervision of work-plan execution....

Logistics costs and operation time in Kenya significantly dropped last year on the back of strong digital processes at key points and improved infrastructure, a new survey shows. According to the 2017 Logistics Performance Survey recently unveiled by the Shippers Council of East Africa, cost and time indicators for road freight, sea, air and rail in Kenya last year dropped compared to 2015. Road freight turnaround time between Mombasa and Nairobi in 2016 was 26.4 hours down from 36.8 hours in 2015, and 10.7 days between Mombasa and Kampala, down from 15 days. Time taken by trucks from Mombasa to Kigali dropped from 17.5 days in 2015 to 12.5 days in 2016. This illustrates a 40 per cent truck turnaround between 2014 and 2016. Truck turnaround for Dar es Saam to key corridor destinations like Kigali, Bujumbura and Kampala remained steady with a marginal decrease of 18 per cent. Port dwell-time, the time it takes a vessel to arrive at the port area to the first berths, improved from 68 hours in January 2015 to about eight hours for the Port of Mombasa. This is attributed to the introduction of fixed berthing by the Kenya Ports Authority and the expansion of the port which increased its capacity. The custom processes at the port also decreased from 55 hours to 43 hours within the year. Nairobi has the shortest airport dwell-time in the region at an average of 28 hours for exports and 33 hours for imports while the airport in...