The slide in Kenya's exports to the East African Community is likely to continue in the near-to-medium term as neighbouring countries industrialise faster, according to the Kenya Association of Manufacturers. Chief executive Betty Maina told the Star on Friday that some of the products that Kenya used to export to Uganda, Rwanda and Tanzania are now being produced locally or being sourced from elsewhere at cheaper prices. She cited China and India as among countries that have eaten into Kenya's share of the five-nation EAC market. Hardest hit products include those that are paper-based or sugar-based [such as confectioneries], Maina said. An analysis of official data has shown that Kenya's sales to the neighbouring countries have been dwindling over the last four years, ironical to the noises around EAC integration that have been growing louder and louder over the same period. The value of sales to Uganda, Tanzania and Rwanda in 11 months to November last year dropped to Sh85.95 billion, a 21.1 per cent decline from Sh108.93 billion over the same period in 2011. "These countries are industrialising and as they do so, they replace imports, majority of which were coming from Kenya," Maina said. "The other thing is that we have also been replaced in those markets by Indian and Chinese goods." She said there was a growing trend in imports from the two countries into the region including Kenya "partly because of our own rigidities in the Kenyan market, as well as blockages in accessing the East...

THE East African Community (EAC), the Southern African Development Community (SADC), the Common Market for Eastern and Southern Africa (COMESA) and Economic Community of Western African States (ECOWAS) will be merged to form a single continental Free Trading Area in 2017. The resolve was among the issues discussed during the recently held, EAC Heads of State Summit Meeting in Nairobi, where the Secretary General for the EAC, Dr Richard Sezibera, extended his appreciation to the five regional presidents in supporting the proposed giant, future trading bloc. “I would like to thank Your Excellencies for insisting that East Africa negotiate as a bloc, even during the most difficult moments. The spirit you nurtured is evident in the ongoing negotiations for a continental Free Trade Area between EAC, COMESA, SADC and ECOWAS,” stated Dr Sezibera. “We are in good position to benefit from an eventual Free Trade Area that will result in the establishment of an integrated market of 26 countries, with a combined population of almost 600 million people,” stated the Secretary General for the East African Community, which at the moment comprises of Kenya, Rwanda, Uganda, Burundi and Tanzania. Taking over the EAC Summit Chair, President Jakaya Kikwete had also maintained that; “To us in Tanzania, as it is the case with all East African Community partner states, regional integration is a matter of both principle and policy. We are staunch supporters of the integration process and formidable believers in African Unity,” he said. The proposed vast Free Trading Area...

“While implementation of the EAC Common Market Protocol which would pave way for a monetary union and make history on the African continent, the Common Market Protocol is still lagging,” stated the Tanzanian Head of State. President Kikwete made the statement in his acceptance speech after taking over the chairmanship of the East African Heads of State Summit in Nairobi late Friday evening. He cited the East African Common Market scorecard of 2014 which indicated a slow trend and progress by member states in the implementation of some of aspects of the Common Market Protocol. “Fortunately, however, key recommendations have been proposed on increasing the pace of its implementation. All of us must ensure full implementation of these recommendations." “But with regard to free movements of services, for example, we are told, 63 measures out of 500 key sectoral laws and regulations of partner states were identified to be inconsistent with the Common Market Protocol." Strangely, though, professional services accounted for 73 per cent of these,” he said. According to Mr Kikwete, the scorecard appreciated that a lot has been done in the movement of goods but non-tariff barriers, particularly agreements on the application of sanitary and phytosanitary measures remain notorious. “Only two out of the 20 capital operations are free of restrictions in all partner states. These are those related to external borrowing by residents and repatriation of proceeds from sale of asset,” he added. President Kikwete urged the community as a whole to remain focused on the implementation...

NAIROBI, Kenya, Feb 22 — Germany’s Foreign Affairs Minister Frank-Walter Steinmeier on Sunday said his country was looking to capitalise on East African integration. Arriving in Kenya on the heels of the East African Community’s 16th Ordinary Summit, Steinmeier was in the company of 20 German business leaders and industrialists whom he said were eager to take advantage of the opportunities that the opening up of the East African markets would create. Kenya’s Foreign Affairs Cabinet Secretary Amina Mohammed welcomed the interest and efforts to broaden that integration to include countries in central and some Southern African countries would generate even greater interest from foreign investors. “We need as many companies as are in Germany to have a presence in Kenya because the population of Kenya is not just 44 million. This is an entry point to the rest of Africa and with the agreements that we have signed within the continent we’ll soon have a market size of 600 million plus. Whichever way you look at it, we’ll soon have a bigger market for Germany than Germany has in Europe,” she said. Amina said Kenya was also in talks with Germany to increase the number of scholarships that the country currently benefits from through the German Academic Exchange Service (DAAD). Stability, Steinmeier however emphasised, was key to the continent’s economic prosperity. Singling out the conflicts in Somalia and South Sudan, Steinmeier said political solutions as opposed to military intervention were key to long-term stability. And in both respects, he...

TEXTILE and tanner industries in East Africa are set for vast revival as Heads of the East African Community member states agree to set up a mechanism that will promote growth and protection of the two industries. Addressing journalists hardly two days after conclusion of the 16th EAC Summit for Heads of State, the Minister for East African Cooperation, Dr Harrison Mwakyembe, said in Dar es Salaam that the region was committed to utilizing effectively the potential in textile and skins and hides industries to reduce dependence on importation of second-hand clothes and shoes. “The council of ministers (for which Mwakyembe is the current chairman) is currently working out modalities to enhance implementation of the agreement by Heads of State to resuscitate textile and tanner industries,” Mwakyembe explained. However, the minister was explicit on the implementation of the plan insisting that the population had nothing to worry about as no inconvenience would be caused and socio-economic stability would be guaranteed. As for the wider picture, the plan is to spur trade with the community and beyond. Of late, importation of second- hand clothes took their toll in all five major cities let alone other district headquarters. Despite the fact that a section of the community make gains from the business, the future of the region in terms of textile industry remained uncertain. Textile industry can offer employment to millions in the region. As for the reported unsettled matter on temporary ban of motor vehicles from Tanzania from picking tourists directly...

HISTORICAL reasons explain why the Kenyan industrial base is much more advanced in comparative terms to other East African countries Tanzania included. However, it is significant to note that not all that was Azimio la Arusha was negative. Today, Tanzania has plenty of homegrown cottage industries owned by ordinary Tanzanians. Mr. Mazzari Taj Mohammed is one such Tanzanians who produces honey packaged as Asali One. The product, like many Tanzanian made products are struggling to capture the East African market. There are several reasons why Tanzanian exports, despite being the leading export partner to Kenya do not earn the exports as much money as they should. Chief among them is that Tanzania exports raw unfinished goodsmaize, beans, potatoes, tomatoes and onions among others. Tanzania even exports cashew nuts in its unprocessed form to Kenya. The politicians will scream blue murder that the Kenyans are engaging in economic sabotage. In reality there is no such government policy by the Kenya Government just like the Tanzanian government has no policy to exploit its own farmers due to their vulnerability. What individuals entrepreneurs like Mzee Mazzari of Asali One lack most of all, is not hunger for markets but market awareness. This past week, Traidlinks a development organisation funded by the Republic of Ireland, and Trademark East Africa brought together some 15 or so local producers who are ready for the export market to give them skills necessary to capture the existing glut which is currently filled by brands from all over the...

The East African employers and trade unions have called on EAC partner states to fully implement the trading bloc’s Common Market Protocol which came into force in July, 2010. The East African Trade Union Confederation (EATUC) and the East African Employers Association (EAEO) asked EAC partner states to work towards eliminating all non-tariff barriers (NTBs) in an effort to promote free movement of labour in the region. This was revealed in a meeting called by the speaker of EALA aimed at making a case on facilitation for freer movement of labour, persons, services, capital and goods Source: Business Week

The East African Community Heads of State Summit in Nairobi resolved that, following the implementation of the One Network Area by Kenya, Rwanda and Uganda, all the EAC countries should harmonise their calling rates on all networks by July. To meet the deadline set by the EAC presidents, the Council of Ministers has already adopted the principles and methodology for determining reduced, harmonised EAC roaming rates and a plan of activities that will ensure the reduced rates are in place by the set date. The EAC Heads of State have also directed the Secretariat to provide the Partner States with a list of protocols that have not yet been ratified and these do include; Vehicle Load Control Bill (2012), Defence Cooperation Protocol and the EAC Peace and Security Protocol. The Summit also approved key priority interventions to be implemented over 2015/2016 and these do include; consolidation of the Single Customs Territory Road map for the implementation of the Single Customs Territory; Vehicle Load Control Limit;Implementation of the Heads of State Prioritised projects in railways,ports,inland water ways and energy; conclusion of negotiations of the Tripartite Free Trade Area Source: The East African

Contractors have completed and handed over the Malaba one-stop border post to be shared by Kenya and Uganda, paving the way for its commissioning to improve trade flow between the countries and the Great Lakes region. The Works ministry in Uganda handed over the facility to the Uganda Revenue Authority (URA), raising hope for faster clearance of cargo. “Innovations have reduced the time needed to travel from Mombasa to Uganda. Initially, it required 18 days, which have since reduced to less than five days. The OSBPs (one-stop border posts) would dramatically reduce clearance time,” Richard Kamajugo, Commissioner for Customs said. The one-stop border post concept is aimed at harmonising transit clearance, with two officers from bordering countries sitting under one roof to handle transit documents concurrently to save time. Currently, traders in the region are hampered by strenuous customs clearance procedures in which goods are separately inspected by officers on either side of the border leading to massive delays. The special border posts will include Taveta-Holili border and the Namanga border (Kenya-Tanzania), Busia and Malaba borders (Kenya —Uganda) and the Kanyaru-Akanyaru border (Burundi-Rwanda). Others are the Mutukula border (Tanzania-Uganda), Gasenyi-Nemba border (Burundi-Rwanda) and Lungalunga-Horohoro border (Kenya – Tanzania)Analysts said the harmonisation of customs clearance on common borders would help to cut back on processing time and substantially reduce the cost of doing business. It also helps to fight graft because impatient truckers and traders resort to offering bribes either to jump queues or expedite cargo clearance. Source: Business Daily

Three little boys in Kigali are sharing a lollipop. They lick it in turns. The lollipop is imported, so 45 per cent of its cost is due to transport and allied costs. It may have been made in Kenya or Tanzania or even farther afield, and it has travelled thousands of kilometres and crossed several borders. So whichever of the boys bought that treat, he’s paying part of the freight clearance charges, handling charges, insurance, fuel costs and the salary of the trucker who got it to the Rwandan capital. Logistics is a critical yet easily neglected component of economic development. Investment in agriculture is futile if there is no supply chain in place to get produce to market. Essential medication is rendered ineffective if it cannot be transported in the appropriate conditions. Consumer goods cannot improve people’s lives if the cost of importing them means they are too expensive for people to access. Yet in discussions of “sustainable development goals” or “poverty reduction,” there is too often a tendency to focus on headline targets and forget about the mechanics of delivery. In East Africa, transport and freight costs are among the highest in the world, with freight logistics expenditure more than 50 per cent higher per kilometre than in Europe or the United States. This extra cost is caused by a “logistics gap”: a lack of infrastructure, technology and expertise affecting everything from road networks to payment systems and warehousing facilities. In landlocked countries like Rwanda and Burundi, this...