The Kenyan shilling appreciated against the US dollar by 0.1 percent, closing the week at 107.8 shillings from 107.9 shillings recorded the previous week. The slight appreciation by the local currency was mainly attributable to subdued demand for the dollar during the week and the positive news on the Eurobond issue. On a YTD basis, the shilling has appreciated by 1.3 percent against the dollar, in comparison to the 7.7 percent depreciation recorded in 2020. “Despite the recent appreciation, we expect the shilling to remain under pressure in 2021,” said experts from Cytonn Investments. Pressure on the shilling will come from the rising uncertainties in the global market due to the Coronavirus pandemic, which has seen investors continue to prefer holding their investments in dollars and other hard currencies and commodities. Demand from merchandise traders as they beef up their hard currency positions in anticipation of more trading partners reopening their economies globally will continue piling pressure on the shilling. The shilling is however expected to be supported by the Forex reserves, currently at USD 7.5 bn (equivalent to 4.6-months of import cover), which is above the statutory requirement of maintaining at least 4.0-months of import cover, and the EAC region’s convergence criteria of 4.5-months of import cover. The stable current account position is estimated to remain at a deficit of 5.2% of GDP in 2021. Improving diaspora remittances evidenced by a 22.3% y/y increase to USD 315.8 mn in May 2021, from USD 258.2 mn recorded over the same...

Tanzania attracted more citizens of other partner states to live and work within its borders in the past years, a new scorecard on the Common Market shows. The country issued 19,629 residents permits compared with Kenya’s 2,378, Uganda’s eight and Burundi’s 459. The report shows that Kenya and Tanzania issued the highest number of work permits to other EAC citizens between January 2019 and December 2020. Kenya issued 2,378 work permits to mostly Tanzanian and Ugandan nationals, while Tanzania issued 1,664 work permits mostly to Kenyans and Ugandans. Kenya, Tanzania and Burundi attracted the highest number of students from other partner states between 2019 and 2020. The Common Market Protocols (CMP) scorecard covering the period between January 2019 to December 2020 was prepared by the “31st meeting of the Sectoral Council of ministers responsible for EAC Affairs and Planning,” who met in Arusha from June 7-11 and attended by Secretary-General Peter Mathuki and all EAC Affairs ministers except Uganda’s. “The EAC has made tremendous progress under the six freedoms of the CMP. This is an indication that the Community is getting back on track,” said Dr Mathuki. “Intra-EAC trade has increased among the EAC partner states in the past 10 years. And we have no choice. That is why we are widening to include the DR Congo to become the seventh member to the EAC,” he added. The CMP, which provides for “Six freedoms” — free movement of goods, persons, capital, labour, and services; right of establishment; and the right...

The Kenya Bankers Association, Kenya Climate Innovation Center, and FSD Kenya have partnered to launch a blended finance project to finance Small and Medium-sized Enterprises (SMEs) in Kenya. Blended finance is when funds are invested in sustainable development projects and the projects provide financial returns to investors. The partnership between KBA, FSD Kenya, and Kenya Climate Innovation Center to finance SMEs in sustainable development is the first project of its kind in Kenya. The program aims to provide funding that is risk-tolerant, concessionary, and flexible to small and medium businesses (SMEs) engaged in sustainable development. Kenya’s banking sector is one of the major economic drivers in the country. The Kenya Bankers Association, the banking industry umbrella body, has started a Sustainable Finance Initiative course “designed to enable financiers to create long-term value for the economy, society and the environment.” The association aims to increase investments in the green economy and in projects that are good for the environment. KBA will host a week-long virtual summit for Small and Medium-sized enterprises starting tomorrow 22nd June to 29th June. The Summit will kick off with the launch of a novel Blended Finance partnership jointly developed by KBA, Financial Sector Deepening Kenya (FSD-K), and the Kenya Climate Innovation Center (KCIC) on Tuesday, June 22nd. This online event is open to all and participants will learn about the blended finance project aimed at helping SMEs in Kenya to scale up. The inaugural event will be followed by a three-day virtual tradeshow where banks will...

Summary Leaders say the infrastructure will transform the socio-economic welfare of citizens in both countries. Uganda and the Democratic Republic of Congo (DRC) on Wednesday launched a 223km road project linking the two countries, with the   project envisioned to boost cross border trade, improve security and connectivity between the two countries. According Mr Bageya Waiswa, the permanent secretary in the Ministry of Works and Transport, the project was initiated with major objectives of boosting trade and commerce, addressing the issue of security, easing movement and welfare of the people, and strengthening relations between Kampala and Kinshasa. At the ground breaking ceremony held at Mpondwe (Uganda) and Kasindi (DRC), President Museveni and his DRC counterpart Felix Tshisekedi said the infrastructure will transform the socio economic welfare of the citizens in both countries. President Tshisekedi described the project as a reinforcement of relations between the two neighbouring countries.  “I thank him [Museveni] for this initiative because it caters for the idea of the integration of our countries. As brothers, instead of looking to build walls, it is better to build bridges,” Mr Tshisekedi said. “I am happy to be here for this project. Tshishekedi came with an open position because he does not want any suspicion with his neighbours. We are here to break ground for this project and ready for more projects,” Mr Museveni said. In a joint communique issued by the two heads of state, the infrastructure project is part of a coordinated effort between the two countries to promote...

Unity across the greater Horn of Africa has long been a cherished but elusive objective. But with the recent opening of the Moyale One Stop Border Post, there is renewed impetus to establish closer economic and political ties among Horn of Africa countries. Kenya National Chamber of Commerce and Industry (KNCCI) Moyale chapter chairman Ali Muumin told Nation.Africa that the opening of the crossing is crucial for regional integration. “We hope that the full operationalisation would mark the end of the previous bottlenecks that hindered trade and access,” he said. He cited bureaucratic delays, high taxes and tariffs as some of the main challenges that have for decades hampered closer ties, including enhanced trade between Kenya and countries such as Ethiopia, Djibouti, Eritrea and Egypt. Exports from southern Ethiopia and Djibouti, he said, often found their way to Djibouti warehouses before being redirected to each other's market shelves via Djibouti ports. Lower tariffs Harmonised and lower tariffs on goods from the region entering Kenyan markets will also stimulate trade among partners and make it more lucrative to export goods to these countries than to other African nations. KNCCI Marsabit chapter chairman Hajji Adano Gure also reiterated the need to reform existing regional institutions to boost regional trade. A major cause of the shortcomings in regional integration efforts, he said, was the failure of African leaders to consult citizens when designing integration strategies and programmes. Small-scale manufacturers, he said, face difficulties when they try to get the required import or export...

Investment in the diverse sectors of the blue economy will help create jobs for the youth in the East African Community. This is according to the President of Zanzibar, Dr. Hussein Ali Mwinyi, who has called for foreign direct investment from East Africa and beyond in the island’s blue economy. Dr. Mwinyi said that the island was open for investment in diverse sectors of the blue economy including deep-sea fishing, ports infrastructure, marine transport, petroleum and gas, and tourism. “Zanzibar also requires heavy investment in modern agriculture, real estate and conference tourism,” said Dr. Mwinyi in a speech read on his behalf by the country’s 2nd Vice President, Hemed Suleiman Abdulla. “Investment in these sectors will spur business within the East African Community in addition to increasing national revenue and improving the lives of the people of Zanzibar,” said Dr. Mwinyi. According to the president, Zanzibar had been a centre of maritime and international commerce for centuries with merchants from the island proving their worth in regional and global markets. Abdulla read the speech during a CEO Evening Round Table Engagement dinner on EAC regional integration dinner convened by the East African Business Council that brought together business people and private sector mandarins from the island. The event was themed “Private sector-led Integration.” On his part, the Vice President challenged the Zanzibar National Chamber of Commerce to rally the island’s business community for purposes of exposing them to investment opportunities in East Africa and relaying their the challenges they faced...

Global Britain should look towards supporting the development of Africa’s digital landscape, argue Pauline Girma and Oona Palmer (LSE). In this post, they explain that given that seven of the ten fastest-growing internet populations are located in Africa, and that it is home to what is the youngest population in the world, the future growth of the global e-commerce market depends upon unlocking the continent’s potential. The British Prime Minister has invited President Ramaphosa of South Africa to join the G7 summit in Cornwall, England in early June. The summit will discuss among other things trade and the digital economy. A number of African states are taking part in the WTO negotiations on digital trade, but South Africa has opposed the whole idea of the current WTO negotiations on the topic. Africa presents both significant opportunities and challenges for those looking to expand e-commerce. Despite changing demographics and improving business environments, which have contributed to rising household consumption, infrastructural and technical constraints continue to undermine efforts to scale e-commerce, and hinder Africa’s integration in the global digital economy. Fewer than a quarter of Africa’s roads are paved according to the World Bank, and even the relatively large markets of Nigeria and Kenya struggle with access to electricity. Moreover, the lack of widespread internet connectivity remains a fundamental barrier to the uptake of e-commerce in Africa, with less than one-third of Africans able to access the Internet. Yet the potential for the widespread adoption of e-commerce to facilitate technological ‘leapfrogging’ has...

Malawi and South Sudan on Thursday signed a trade agreement that will see Lilongwe exporting its surplus food to Juba to help ease a widening deficit of cereals in Africa’s youngest nation. The two countries officially signed a memorandum of understanding (MoU) in Juba that allows Malawi  to export to South Sudan products such as maize, maize flour, sugar, rice, groundnuts and beans. The deal also allows South Sudan to export refined petroleum products to Malawi, a move which is expected to cut costs of importing from the Arab world, according to Minister of Trade Sosten Gwengwe. The minister signed the pact on behalf of Malawi Government while South Sudan Minister of Trade Kuol Athian Mawien signed on behalf of South Sudan. In an interview with The Nation from Juba on Thursday, the minister said: “This market is untraditional for us. It is outside Southern Africa Development Community and Common Market for Eastern and Central Africa and we want to make the Africa Continental Free Trade Area [AfCFTA] agreement a reality. “We want more exports and more foreign exchange in Malawi. We want more young people to be motivated to do farming because access to market is now guaranteed.” Gwengwe said that Malawi is looking forward to exporting food from this year’s cereals surplus estimated at 1.2 million metric tonnes (MT). The minister said Malawi’s exports to South Sudan in 2020 were estimated at $3million (about K2.4 billion) while imports were estimated at only $15 585 (about K12.5 million). This means that...

Country Financing Roadmap aims to increase private investments Nation first in Africa to launch Country Financing Roadmap To benefit $431.6bn financing gap to meet SDGs Once again, Nigeria was left in the lurch by the World Economic Forum (WEF) to pick its West African neighbour Ghana, as the launch area of the first Country Financing Roadmap (CFR) for the Sustainable Development Goals (SDGs) in Africa. Ghana is the first country in which the CFR was released. It is piloting the initiative which will serve as a blueprint for other countries. The effort is funded and supported by the European Commission (EC) and the Danish International Development Agency (DIDA). The Country Financing Roadmap is a new country-led approach developed with the WEF to improve long-term competitiveness and bring the Sustainable Development Goals (SDGs) to life. The CFR presents a set of country-led plans to encourage greater financing at scale, especially private-sector participation, to meet the SDGs by 2030. The CFR has focused on financing sustainable infrastructure, a key indicator and driver of economic growth and development, which often hampers the ability of a country to attract sizeable investment if left behind, according to the World Bank. The CFR also focuses on the Micro, Small and Medium Enterprise (MSME) sector as it represents about 85 per cent of business within the private sector and contributes to 70 per cent of GDP, according to the report. According to WEF, the Country Financing Roadmap aims to increase private investments to help close the $431.6...

Africa is regarded as the new business frontier of global trade and investment. This despite numerous challenges such as lack of proper infrastructure and access to capital. In it’s most recent report for 2020, Deloitte and Touche outlines countries with most ideal environment for investment. Herein is a snapshot of most appealing countries: Mauritius The modest Indian Ocean island, which is best known for its exquisite white beaches and lush lifestyle, is fast becoming one of the hottest investment destinations and foremost business hubs on the African continent. Being likened to one of the leading real estate and business hubs in Asia is no small achievement. The fact that Mauritius is on a mission to make itself more attractive as an investment environment is clear from its progressive and highly favourable tax regime. Mauritian tax planning advantages include no capital gains tax; no inheritance, wealth or gift tax; a standard 15per cent individual tax rate; and no exchange control. Corporate tax is set at a rate of 15per cent or lower, while the country also boasts a strong tax treaty network. Cote D’ivoire Côte d’Ivoire has enjoyed a vibrant, robust, and stable economic growth since 2012, but experienced a slowdown in 2020 owing to the Covid-19 crisis. Prior to the global shock triggered by the pandemic, Côte D’ivoire had one of the most robust economies in Africa and in the world and had grown at an annual average rate of 8 per cent since 2012. The country remains Francophone West...