Members of the East African Community are split down the middle again after Uganda joined Tanzania in pulling out of signing a trade pact that is key to continued access to the European Union market without paying duty. Although Kenya, Rwanda and Burundi are ready to sign the Economic Partnership Agreement (EPA) with the EU, World Trade Organisation rules do not allow countries aligned to a trade bloc to sign up individually. Uganda indicated last week that it was not going to sign until the bloc had reached a common position on all issues. “Everyone, including the EU is now agreed that we don’t sign,”  said Julius Onen, the Permanent Secretary in Uganda’s Ministry of Trade. “We must have a common position on all the issues. As EAC, we maintain solidarity and want to move together as a common market. It’s now the agreed position, even for the EU, that we have to sign together,” he added. A week ago, Aziz Mlima, Permanent Secretary in Tanzania’s Ministry of East Africa, said the country would not sign the agreement following the vote by Britons to leave the EU. “Our experts have analysed the pact and established that it will not be to our local industry’s benefit. Signing this pact at the moment would expose young EAC countries to harsh economic conditions in post-Brexit Europe,” Dr Mlima said. On Thursday, Tanzania’s Minister for Trade, Industries and Investment Charles Mwijage said Britain was Tanzania’s key trade partner in Europe. “Internationally, we trade with Britain, China, India and South Africa. When...

Twenty-six African countries have failed to agree on how traders would access a market of more than 600 million people through the proposed Tripartite Free Trade Area (TFTA), blurring expansion plans by companies. The EAC, Common Market for Eastern and Southern Africa (Comesa) and Southern African Development Community (SADC) have differed on the kind of preferential treatment sensitive goods and services from one bloc would be offered in another. The 12-month period for negotiations expired on June 30. "We were to complete this work by last month (June) but we did not reach an agreement. There are still challenges," said Mark Ogot, a senior assistant director in-charge of economic affairs at Kenya's Ministry of East African Affairs. It is understood that though the blocs have reached a common position on the proportion of tariff lines to be liberalised they have broken ranks over a common tariff to be applied on sensitive products such as maize, wheat, sugar, textile and cement which are considered essential in spurring the growth of domestic industries. The EAC countries have agreed to liberalise 37 per cent of the tariff lines estimated at 5,600 items. This would allow about 2,000 items excluding sensitive items to enter member countries at zero duty. The other goods would be charged duty at the rate of 10 per cent for intermediate goods and 25 per cent for finished goods. Southern African Customs Union - the SADC Customs union - has agreed to remove duty on 60 per cent of its...

Value Added Tax (VAT) on auxiliary services, widely referred to as VAT on Transit Goods has of recent attracted a lot of criticisms from stakeholders, mainly those using Dar es Salaam Port. Brought by the new VAT Act of 2014, the VAT on transit goods became operational from the last financial year. Since the Tanzania Revenue Authority (TRA) started applying such tax, the interested parties of the Dar es Salaam port were displeased. Their concern was always that the VAT on transit goods has added the cost at Dar es Salaam port, thus scaring away the importers who were opting for Mombasa Port as an alternative. But, to the TRA, their sentiment appears to miss a point as the taxman defends that the newly introduced tax had no hand in reduced cargo by making the Port being costly. TRA's Commissioner for Domestic Revenue, Mr Elijah Mwandumbya, gave a realistic situation on the ground, noting that comparatively the Dar es Salaam port is still cheaper than its competitor, Mombasa port. "Let's take an example of cargo imported through Dar es Salaam or Mombasa port to the land-locked Rwanda," Mr Mwandumbya said. According to the recent comparative data available to TRA and of which the 'Daily News' acquired a copy, the importer pays a total of 4,169 US dollars for the 20-foot container that is subjected to all costs including VAT on auxiliary services at the Dar es Salaam port while the same container is charged a total of 4,465 US dollars...

Neighbouring east African countries, Tanzania and Uganda have announced that a crude oil pipeline is on the cards with construction planned to commence early next year. According to local media, Uganda's energy minister, Irene Muloni, confirmed the development of a crude oil pipeline following discussions the ministry held on Tuesday with a visiting Tanzanian delegation. Muloni said the two countries had agreed to fast-track the project, which will cover 1,443 kilometres. It is reported that oil explorations have uncovered more than 6.5 billion barrels of crude oil reserves from about 40% of the Albertine basin in western Uganda. Muloni said: “Every activity in respect to the project will be done in a fast tracking mode. We have agreed to meet in Tanga (Tanzania) in October this year to launch the front-end-engineering-design for the project.” The minister revealed that feasibility studies estimate the project to cost $3.55 billion. East African crude oil pipeline According to the media, Muloni said a pipeline company will be set up and Uganda, Tanzania and other interested east African states will have shares in it. “The pipeline is very attractive and viable. Securing financing will be explored in much detail. Contacts are being made to potential funders,” she stated. Both the countries’ leaders are reported to have agreed to name the pipeline project reflecting the East African Community and the second ministerial meeting endorsed, ‘East African Crude Oil Pipeline'. A joint media release, signed by Muloni and her Tanzanian counterpart, Sospeter Muhongo, read: “The ministerial meeting...

Dar/Arusha — Despite Tanzania's recent decision to pull out of the Economic Partnership Agreement (EPA), the European Union (EU) has said it is forging ahead with plans to sign the deal with the East African Community (EAC). The head of the EU Delegation to Tanzania, Mr Roeland van de Geer, said the decision to sign or not to sign the already negotiated agreement was for the EAC to determine. "The EU is ready to sign the EPA, and it is hoped that the EAC will also be ready to sign in the near future. That decision is for the EAC and its member states to take," Mr van de Geer told The Citizen through email. Tanzania announced last week that it would not sign the EPA during a ceremony scheduled for next week in Nairobi. Tanzania, along with Kenya, Uganda, Rwanda and Burundi, negotiated the trade agreement with EU for more than a decade before a deal was apparently reached. Foreign Affairs Permanent Secretary Aziz Mlima said last Friday, that the decision was not based on Britain's decision to exit the EU, but more specifically on what he described as "national interests." He said the decision was meant to protect Tanzania's nascent industries. Mr van de Geer spoke as the EAC technocrat behind the 14 years of negotiations said he was still optimistic Tanzania would come along. Elsewhere, reports in Kenya said the country's Foreign Affairs minister, Ms Amina Mohammed, was due in the country to hold talks with the...

Construction works are set to begin to widen a strategic busy highway connecting Rwanda to the border with Tanzania. The 92km Rusumo-Kayonza road will from November be rehabilitated and widened to accommodate busy traffic of heavy cargo trucks. For this project, Rwanda has signed $184.1 million (Rwf 137.3 billion) loan agreement with African Development Bank ($94 million), Japan International Cooperation Agency ($68.4 million) and the European Union ($ 21.7 million). This 6metre-wide highway is part of the Central Corridor that leads to Dar-es-Salaam Port-Tanzania. It will be extended to 7 metres wide. “The project will make overland transportation smoother and decrease shipping costs,” said Claver Gatete, Rwanda’s Finance Minister. Before construction starts, Rwanda is set to first expropriate 565000 houses along the highway with total compensation valued at $12.5 million. Rwanda will repay this loan in a period of 40 years with 10 years of grace period and an interest rate of 0.75% on AfDB loan, while JICA will charge 0.01% interest rate. At the signing, Ambassador Negatu Makonnen the AfDB representative to Rwanda said; “this is the biggest project my bank financed since 1974 in Rwanda that will make a huge impact.” Takayuki Miyashita, the Japanese Ambassador to Rwanda said it is their biggest commitment to Rwanda in the last 27 years. “We are determined to contribute to Rwanda’s infrastructure development because the country uses loans efficiently.” The loan is a second commitment by JICA to a mega project that links Rwanda to the central corridor. Early this year,...

Radosław Domagalski will lead a delegation of entrepreneurs from an array of sectors, ranging from renewable energy, agriculture and trade. The envoys will also include representatives of the Foreign Affairs and Finance Ministries, alongside the Polish Information and Foreign Investment Agency (PAIiIZ), the National Economy Bank (BGK) and the Polish-Tanzanian parliamentary group, Domagalski announced on Wednesday. A series of bilateral talks with representatives of the Tanzanian and Kenyan finance, industry, trade and agriculture ministries are on the agenda. The key topic of the talks are aid credits the Polish government has granted to Kenya and Tanzania. Poland hopes that Polish companies will be able to tap into the resources lent to the two countries, reaching up to USD 110 mln for Kenya and USD 100 for Tanzania. “I hope that with this development aid we will see new Polish investment projects on the African continent,” Domagalski told news agency PAP. The trip coincides with the 14th UN Conference on Trade and Development (UNCTAD), to be held in Nairobi next week. The visit begins on Monday, 18 July, and will last until Friday, 22 July. Trade between Kenya and Poland reached USD 109.8 million in 2015. In the case of Tanzania, last year’s trade figures amounted to USD 69.5 million. Source: Radio Poland

It is imperative for East African Community (EAC) to listen carefully to the issues Tanzania is raising related to the Economic Partnership Agreement (EPA) the bloc concluded with the European Union, a regional lawmaker has said. MP Abubakar Zein Abubakar, a Kenyan representative in the East African Legislative Assembly (EALA), stressed this during an interview with The New Times on Monday. “It is important for us to listen to the issues Tanzania is raising and also look at the implications of Brexit. We, as Africans, cannot afford not to act together as a bloc,” Zein said. “We must always consider working together as a unit and take into consideration whatever unfolding situations.” Tanzania’s foreign affairs permanent secretary Aziz Mlima said his country will not sign the EPA between EAC and EU. Dr Mlima told reporters in Dar-es-Salaam, last week, that Tanzania decided to halt signing because of the “turmoil” that the EU is experiencing following Britain’s exit. “Our experts have established that the way it has been crafted, the EPA will not benefit lead industries in East Africa, but instead to their destruction as developed countries are likely to dominate the market,” said Dr Mlima. Like Mlima, Rwandan economist and EALA member, James Ndahiro, opposes the EPAs on grounds that “it is one-sided” and that EAC economies do not have a competitive edge given their small industrial base. Ndahiro said that, for example, EU countries spend more than Euro 90 billion on direct farm payments (subsidies) and, as such, agricultural products...

PREVAILING infrastructure and energy gaps across the continent can be bridged fast if African countries pursued joint projects, the African Union Commissioner for Infrastructure and Energy, Dr Elham Ibrahim, has said. Ibrahim made the remarks while speaking to The New Times on the sidelines of the ongoing 27th African Union summit in Kigali. She noted that with most of the African countries being emerging economies, teaming up for major projects would ease the burden on individual countries as well as improve their chances of securing funding. “This is what can enable us undertake huge projects, as well as alternative projects. It is important to work together since resources in some countries are not adequate enough for large projects. That is why we are devising a strategy of joint infrastructure projects,” Ibrahim said. The continent continues to suffer from inadequate infrastructure such as road network, railway access and pipeline which experts say has slowed integration and limited intra-Africa trade. Ibrahim said regions that had jointly implemented infrastructure projects such as east Africa had experienced rapid growth in recent years and could easily mobilise funding. “If you look at countries in the East African region, they have improved very fast in recent years in terms of infrastructure due to cooperation. This is true in the areas of roads network, railway and pipeline. Cooperation speeds things up and makes it possible to get funding,” she said. By teaming up, the commissioner added, financing, a factor considered “elusive” by most governments implementing infrastructure projects, would...

The misleading reporting that has recently appeared in the press regarding Qalaa Holdings and its investment in Rift Valley Railways (RVR) has compelled us to respond to the blatant inaccuracies and to clarify any misunderstanding that may have occurred as a result of these false accusations. We clearly and unequivocally state that Qalaa Holdings is committed to adhering to the highest international business standards and to ensuring the success of the project in question. Furthermore, the company has repeatedly demonstrated that it is a staunch advocate of investing in the region as a whole. Qalaa Holdings was, therefore, deeply dismayed by the story that was reported online by Finance Uncovered and published on June 22nd in The Observer. Since 2011, Qalaa Holdings has proudly overseen the renaissance of a strategic infrastructure asset in East Africa which was previously in a state of disrepair. For the past five years, despite significant challenges, Qalaa Holdings has supported RVR's management and its local partners to implement a comprehensive and complex turnaround program. By assembling and leading a consortium of experienced infrastructure financiers, including the IFC, AfDB, KfW, FMO and BIO, Qalaa Holdings has enabled RVR to achieve the following:- 1. Reduce incidents (calculated by million train kilometers) by 40%; 2. Increase its haulage capacity through the acquisition of 20 locomotives and up to 240 high-capacity wagons; 3. Reduce transit time between Mombasa and Kampala (one way) by 29.8%; 4. Introduce the most advanced train operating technologies; 5. Pay $66 million in concession fees...