Intra-African trade has long been a weak point hit upon by leaders looking to strengthen sustainable growth on the continent. Within certain regions, such as the West African Economic and Monetary Union, WAEMU (or by its French acronym, UEMOA), the East African Community (EAC), Southern African Development Community (SADC) or the Common Market for Eastern and Southern Africa (COMESA), regional economic unions have flourished along trade needs and cultural links. The most recent African Economic Outlook (AEO) shows that despite varying degrees of economic growth and development, economic blocs have benefitted community members through not just increased trade, but income convergence, with UEMOA leading among them. Incomes have narrowed at an average rate of 19.6 per cent between WAEMU’s richest and poorest countries over 15 years, according to AEO. In almost all WAEMU countries, the per capita GDP has risen compared to Côte d’Ivoire, the region’s leading economy. Benin and Senegal have caught up with Côte d’Ivoire, while remaining members Niger, Benin, Mali, Guinea-Bissau and Burkina Faso are still behind. “This could mean that poorer countries grew faster than richer ones to narrow the gap. The convergence may also be explained by the slowdown of the Côte d’Ivoire economy during the country’s political crisis of the early 2000s,” the report stated. African trade with the rest of the world, especially the European Union, has remained consistently high throughout a decade of growth and the 2008 economic crisis. However the ‘Brexit’ shake-up, along with a general downturn in commodities prices, puts...

NAIROBI - The East African Community (EAC) governments have been urged to support grain trade, with the argument that such trade is the only sure way for the people to transact and exchange value and thereby raise the standards of living of the citizens. The directors of Eastern Africa Grain Council (EAGC) pointed out the challenges faced by their members in conducting cross-border trade, particularly within the region. It is understood some regional governments have been taking short-term measures to block trade and thereby undoing all the efforts made towards long-term solutions. The directors cited cases where export permits were cancelled without notice. "Some of the effects include trucks being impounded and stopped at the border points, resulting into very heavy financial losses in transport waiting charges, loss of time, inability to meet contractual obligations and high expenses," they said in a press statement. They acknowledged that each of the regional countries had different agro-ecological zones and that at any one time within the year, crops were being harvested in one country and when one country was harvesting, another was not. The EAGC directors said there is reason and basis for continuous trade in grains throughout the year. And their argument is that as a region, if free trade is facilitated by the various national governments, then the entire region will always have sufficient food to feed the East Africans. Regional governments were urged to refrain from any actions that would impede cross-border trade. The meeting, which took place in...

Businesses in Tanzania are accusing the government of being anti-business after its recent announcement that it will introduce value added tax on ancillary services. During an East Africa Business Council meeting this month, Gilead Teri, the director of policy at the Tanzania Private Sector Foundation, said the introduction of VAT on ancillary services provided for goods in transit had resulted in a drastic decrease in the amount of transit cargo shipped via the Dar es Salaam port; competing ports don’t charge VAT on ancillary services. “Introduction of 18 per cent VAT on tourism services such as game driving, water safaris, animal or bird watching, park fees and ground transport services will be unfavourable for business,” said Mr Teri. The measures to broaden the tax base have started to bite, with some hotels in Dare es Salaam turning their facilities into hostels. Kassim Omar, the chairman of the EABC Uganda Chapter and national chairman of the Uganda Clearing Industry and Forwarding Association, told the meeting that businesspeople require 10 documents to import or export to Tanzania, which attract costs estimated to be double the cost incurred in other sub-Saharan countries. “Having discriminatory taxes between domestic and imported products from EAC partner states is against Article 15 on National Treatment of EAC Customs Union Protocol, which prohibits EAC partner states from enacting legislation or applying administrative measures that directly or indirectly discriminate against the same or like products of other partner states,” Mr Omar said. He further claimed that unlike other EAC...

The political crisis in South Sudan is expected to impact on the East African economies as the crisis disrupts businesses and trade, undermining the region’s prospects for growth. The crisis is happening at a time when the region has yet to find a concrete solution to the Burundian political crisis, which not only raises the bloc’s risk profile but also dents investor confidence. While South Sudan’s admission into the EAC earlier this year raised optimism about the potential economic gains from its integration — expanding the EAC Common Market to 162 million people — the recent violence has analysts warning that it could wipe out recent economic gains. While definite figures are not readily available, Uganda and Kenya’s annual exports to South Sudan are valued at some $200 million and $180 million respectively. However, political instability and the adverse impact of external shocks over the past two and a half years are expected to have a significant impact on South Sudan’s economy and the region. Regional businesses, mainly from Kenya and Uganda, that have opened outlets in South Sudan are already feeling the pinch due to political instability, forcing them to rethink their business strategy. “Due to the recent disruptions in South Sudan, we scaled down our operations and we have been reviewing this stance as the situation improves,” said KCB Group chief operating officer Samuel Makome. KCB was among the first regional banks to enter the South Sudan market. “South Sudan is a key market for us and we...

The Dutch government and Trade Mark East Africa (TMA) have committed to improve the financial fortunes of women in East Africa’s cross-border trade. Through the ‘Women in Trade’ programme, the Netherlands authorities aim to reach 25,000 women in Kenya, Uganda, Rwanda, South Sudan, Tanzania and Burundi by the end of this year. Trade Mark has signed a $500,000 (Sh50 million) agreement with the International Trade Centre (under the programme to support 800 women-owned SMEs to access international markets. While addressing trade exhibitors at a Nairobi hotel, Dutch Minister for Foreign Trade and Development Cooperation Lilianne Ploumen said there is need to support the women businesses to complement statistics that show they own over 40 per cent of business in East Africa. “Research has shown that empowering women to trade is good for the economy, society and women themselves,” she said while touring a trade exhibition on the sidelines of the United Nations Conference on Trade and Development in Nairobi. TMA director general David Stanton said supporting women in trade is part of the organisation’s vision to foster inclusive and sustainable economic development. “The partners will work to improve export opportunities for women enterprises in East Africa, and strengthening the capacity of institutions and associations to effectively support women entrepreneurs,” he said. Stanton said TMA was committed to increasing its support to women, with a vision of reaching at least one million more women in the second phase of the programme. However, Ploumen regretted that, despite the prevalence of women-owned SMEs...

NAIROBI (HAN) July 23.2016. Public Diplomacy & Regional Security News. Tanzania’s concern early this month over the impact of Brexit on the East African Community has now turned into an opportunity for leaders and trade negotiation experts to demand a review of the Economic Partnership Agreement between the regional bloc and the European Union that was due for signing next month. The experts want the aspect of liberalisation in the EAC-EU EPA renegotiated, with open-ended time because the agreement currently contains a number of provisions that are prejudicial and bound to constrain EAC’s development. They also want a review of the nomenclature for classification of countries such as Kenya — the only developing country in the EAC — whose exports to EU, unlike those from least developed countries, will face a stringent entry regime if the EPA is not signed. The EPA is a trade and development deal that has been under negotiation between the EU and countries in Africa, Caribbean and Pacific since 2002 — it was to succeed the 2000 Cotonou Agreement. The 2007 Framework Economic Partnership Agreement would pave the way for a free trade area between the EU and these regions. Nathan Irumba, chief executive director of regional trade negotiations institute Seatini Uganda, said the EAC might be hounded into signing because of the unique situation Kenya finds itself in, yet there are options around it. “If the negotiations are between blocs, why doesn’t the EU treat EAC as an lesser developed country (LDC)?” asks Mr...

The launch of the Pan-African passport was one of the most memorable milestones at the just-ended 27th ordinary session of the African Union (AU) in Kigali, Rwanda. The African passport will be the third for citizens in the East African Community after the national and the East African passport. Dr Nkosazana Dlamini-Zuma, the chairperson of the AU Commission, handed two representational African passports to President Paul Kagame, and to the head of the AU, President Idriss Deby of Chad. "At the summit in January 2016 this year, you decided that we must launch the African passport. We are making this start with our heads of state and government, foreign ministers, the leadership of the regional economic communities (RECs) and the leadership of the representatives of the AU executive councils and organs," she said in her opening remarks. Dlamini-Zuma also urged heads of state to create conducive conditions for member states to issue the passport to their citizens, "within their national policies, as and when they are ready." The passport seeks to create advantageous visa-regimes across the continent and later on create a pathway for a visa-free Africa, under the AU agenda of the "Africa We Want." She explained that after sharing aspirations of African citizens, the commission adopted Agenda 2063, which is a 50-year framework towards a continent that is integrated, peaceful and prosperous, driven by its own citizens and playing a dynamic role in the world. "The Africa we have today is full of hope, possibility and optimism, but...

A few days ago, Tanzania’s Trade minister Charles Mwijage announced that his country would not be signing the Economic Partnership Agreement (EPA) with the European Union. He argued that the EPA would expose his country to harsh economic conditions in post-Brexit Europe. This followed an earlier announcement by Dr Aziz Mlima, Tanzania’s Permanent Secretary to the East African Community, that his country would not sign the EPA. This came as a shocker to Kenya, especially when Uganda immediately followed suit in rejecting the EPA. As if reading from the same script, Uganda’s and Tanzania’s decision left many wondering if there is more to this. Would this also mean the end of the EAC? According to WTO rules, countries that form an economic bloc like the EAC cannot make individual agreements with another bloc such as the EU. This generally means that the decision by Tanzania and Uganda has put paid to Kenya’s efforts and those of Rwanda and Burundi to sign the EPA with the EU. This means that Kenya’s horticultural sector may be adversely exposed if it will not enjoy preferential (duty free and quota free) access to the EU, the world’s largest single market. OBJECTIONS TO THE EPA There are many people who have objected to the EPAs with Europe, in fact quite a number of NGOs have been active in trying to dissuade governments from signing them, citing the lopsided nature of the agreement. They also say that the EPAs may curtail the development options available to...

Members of the European Parliament are rooting for the extension the October deadline to sign the comprehensive Economic Partnership Agreement (EPA) between East African Community (EAC) and the EU. The MPs said the move is meant to salvage Kenya after Tanzania and Burundi stood in the way to the realisation of the deal set to give relief from heavy taxes for the country's exports to the EU.Tanzania has refused to sign the agreement while Burundi is at the verge of being sanctioned by the European Union following political instability in the country.EU chair of a joint delegation of Trade and Development Committee Bernd Lange attending the 14th United Nations Conference on Trade and Development in Nairobi said Kenya would be the biggest casualty should the two scenarios persist and the EPA is not signed hence the need to save the situation"Our first proposal is to have the October 1st deadline extended to allow for more time and see whether Tanzania will agree to sign or if Burundi will improve her democratic situation and evade sanction from the European Union. "If none of these happen then I expect that Kenya will apply for the GSP plus and when it is received then we can begin the market access regulations and save Kenya," Mr Lange said.The Generalised System of Preferences (GSP) Plus status will allow Kenya to continue exporting at the current preference terms even if the two countries fail to sort out their issues standing in between the region and a...

I had read and heard about the One Stop Border Post from East Africanists, but was frustrated because no one was putting out a photograph or graphic illustration of how it works. So I decided to check it out, driving from Kisumu into Uganda through the Busia border point. There were surprises aplenty. Something radical is happening with this one-stop thing. When you are entering Uganda from Kenya, you go to a single immigration hall. At one window, a Kenyan immigration official stamps your travel document to log your exit. And you step right over to the next window, hand over your passport and a Ugandan official stamps your entry. If you are a law-abiding citizen, you are through in about two to three minutes. You walk through a short corridor, and you are in Uganda. On the return leg, you head to the opposite immigration complex, and the process happens in reverse. The same thing happens for Customs clearance. This exercise used to take travellers at least 30 minutes, and sometimes clearing your car could run into an hour! If you don’t have a passport, you also get an interstate pass, which is issued simultaneous by Kenya, Uganda, and Rwanda. On average, the one-stop posts have cut the time travellers spend at the border by at least 90 per cent. This is truly remarkable, because it was all but impossible to think of an African government acting alone or collectively with others achieving those levels of efficiency. But politically,...