East African Community member states will explore the potential of a central bank digital currency (CBDC) for their shared payment system to end reluctance by member countries to trade in each other’s currency. The bloc’s secretariat said advances in technology and innovation have created a potential for new forms of cross-border payments even as it moved to upgrade the struggling East African Payment System (EAPS), which was launched in May 2014. “Review recent advances in technology and innovations that have created the potential for new payment infrastructures and arrangements that could be applied to cross-border payments,” the secretariat said in a consultancy call for a feasibility study on the planned upgrade of the EAPS. “The consultant will, therefore, conduct an exploratory scoping review of such developments, as well as emerging technologies and their adoption, including but not limited to technologies involving the use of Central Bank Digital Currencies,” it added. Single currency The adaption of a CBDC could provide an option for the EAC partner states, which target to attain a single currency for the region by 2024 in line with the bloc’s Monetary Union Protocol. A CBDC uses an electronic record or digital token to represent the virtual form of a fiat currency of a particular nation or region. These digital currencies are centralised and are issued and regulated by the competent monetary authority of the country. The CBDC acts as a digital representation of a country’s fiat currency and would be backed by a suitable amount of monetary...

Traders within the East African Community (EAC) will soon be able to report cross–border challenges live and get prompt feedback on the same. This is thanks to an initiative by the newly appointed EAC Secretary General Dr. Peter Mathuki that seeks to resolve persistent Non-Tariff Barriers (NTBs) at regional border points. Dr. Mathuki has hit the ground running and having come from being at the helm of the East African Business Council (EABC), a regional business arm of the EAC, he understands the struggles that the common trader faces while doing business within the bloc. This makes him an ideal leader as he makes decisions based on the experiences he has been encountering when he was on the other side of the table. Dr. Mathuki has now vowed to improve trade in the region which currently stands at 15 per cent by removing some of the challenges threatening the stability of regional trade. According to him, some of the persistent NTBs include restricted market access for goods and un-harmonized charges that continue to frustrate intra-EAC trade. He says that investment by increasing transaction costs and curtailing movement of goods are contributing to the low intra-EAC trade. “EAC intra-regional trade is under 20 per cent, and it is my mission to ensure that this grows to at least 50 per cent in the next five years,” he said. One of his agendas is to have a database of these challenges as they emerge so his office can investigate the causes and...

Kenya and Burundi's chambers of commerce have inked a deal that will foster cross-border trade relations between the two East African countries. Kenya targets to increase its trade with Burundi by pushing for removal of tariff barriers along the main transport route through Tanzania. The deals follow the State visit by Burundian President Evariste Ndayishimiye this week as the two countries move to ease trucking of goods such as pharmaceuticals, petroleum and value added agricultural products. President Uhuru Kenyatta and President Ndayishimiye on Monday signed Memoranda of Understanding (MoUs) on cooperation in agriculture, livestock and fisheries, and another on public service. In the deliberations that lasted more than three hours, the roundtable forum identified agriculture and value addition, manufacturing, pharmaceuticals, building and construction, financial intermediation, ICT enabled services and transport as potential areas of cooperation and opportunities. The two chambers, while appreciating the political goodwill expressed by the two Heads of State, agreed to establish a joint business council to enhance investment and trade for the mutual benefit of both countries. Trade Principal Secretary Johnson Weru said Kenyan exporters of goods to Burundi incur 20 per cent more costs due to constant delays at the Tanzanian border and county levies in that country. As a result, he said, the resultant higher costs of Kenyan goods in Burundi has seen Burundians dump these products in favour of cheaper substitutes from Tanzania, Uganda, Rwanda and China. Cabinet Secretary for Trade Betty Maina said that eliminating these barriers will be key in growing...

In May 2021, the bridge across the Zambezi River linking Botswana and Zambia was opened by the presidents of the two countries. The construction of the bridge, which replaces the longstanding, slow ferry service across the river, means trucks on regional routes can now cross the river in a few hours, or less, rather than the previous three days to a week. It also means they can avoid using the biggest crossing between the ports and factories of South Africa and the rest of Southern Africa – Beit Bridge, which is also one of the most congested borders in Africa. A one-stop border post at the bridge will allow easier thoroughfare. This project embodies the benefits that good infrastructure and joined-up bureaucracy offer regional trade, both of them generally in short supply. More than 250 trucks a day should be able to cross the Zambezi instead of the handful that were able to cross before, bringing down costs, increasing the security of cargo and providing an alternative route for trade to the sea for inland markets. It is not without potential pitfalls. One is the congestion that is likely to develop at Martin’s Drift border post, currently an alternative to the main border post at Gaborone into Botswana, as demand increases. And sections of the roads along this main trade route, an integral part of the North South Corridor, are in urgent need of repair, for example several hundred kilometres of a two-lane highway through Botswana to Kazungula, with eroded...

The East African Community Sectoral Council on Trade, Industry, Finance and Investment (SCTIFI) has urged the EAC Regional Coordination Committee to review and harmonise the Covid-19 testing charges, in addition to the validity and mutual recognition of the certificates with a view to ensuring the safe and smooth movement of goods and persons in the region. The SCTIFI noted with concern the non-recognition of Covid-19 certificates by Partner States, the unharmonised charges for Covid-19 testing and the validity of Covid-19 certificates amongst Partner States. The SCTIFI further observed that notification procedures were not being followed, a situation that essentially constitutes yet another Non-Tariff Barrier (NTB) to trade within the region. The Sectoral Council, which met under the chairmanship of Kenya’s Cabinet Secretary for Industrialization, Trade and Enterprise Development, Ms. Betty Maina also directed the Republics of South Sudan and Uganda to operationalise the Nimule/Elegu One Stop Border Post (OSBP) by deploying all relevant officials to the OSBP. The Sectoral Council had been informed that the Nimule OSBP was completed and handed over to South Sudan and was pending full operationalisation by having all relevant officials from border agencies including from Uganda operating from the OSBP. The SCTIFI further directed Partner States to use regional mechanisms or structures such as the EAC Standards Committee and SCTIFI itself to resolve disputes among themselves as opposed to taking unilateral interventions. The Sectoral Council directed Partner States to comply with the transparency principles of WTO TBT/SPS Agreements, the EAC Customs Union Protocol and EAC...

Oil transporters will have to book in advance their trucks for entry and loading at oil installations as the Kenya Revenue Authority (KRA) starts rolling out the eFuels Project under the Regional Electronic Cargo Tracking System (RECTS) this month. Commissioner of Customs and Border Control Lilian Nyawanda notified petroleum stakeholders that the rollout of the eFuels Project will commence at the Eldoret Kenya Pipeline Depot before a gradual implementation in other oil installations. The system will eventually be rolled out at all customs release points. “In order to enhance the system and operational efficiency, the authority intends to deploy a ‘transporter booking’ module in Regional Electronic Cargo Tracking System (RECTS). The module will enable all petroleum transporters book in advance their trucks for entry and loading at oil installations through RECTS,” read part of the notice to the transporters. The new transporter booking module uses a smart gate functionality that allows only those trucks booked in advance to access oil installation facilities for loading and exit after all customs release procedures have been finalised. As a prerequisite, the eligible petroleum transporters must have a valid Transit Goods License (TGL) which can be obtained directly from KRA Licensing office which is free of charge. Last year, KRA notified industry stakeholders in the Petroleum Industry that monitoring of white petroleum products under customs control will strictly be done through the RECTS. Installation of the system commenced in July 2020. Already all containerised Transit Cargo & Single Customs Territory (SCT) Goods from the...

Mozambique has launched reconstruction works of the Sena railway line which connects Malawi to the port of Beira. The development comes just a day after the two countries signed a memorandum of understanding (MoU) that will revive this important, but neglected, railway line. This follows discussions, last October, between President Lazarus Chakwera and his Mozambican counterpart Felipe Nyusi. During the talks in Maputo, the two leaders decided to reopen the railway line which, some years ago, proved vital for intra-regional trade. Speaking at the launch of the reconstruction work in Mutarara District, Nyusi described the line as an important step in making regional integration a reality. He said as a member of Sadc, he is as enthusiastic about the project as Chakwera is. Mozambique has already done a good part of the 44-kilometre stretch that starts from Mutarare to Marka (Nsanje) from where Malawi is supposed to pick up. In her remarks during the launch, Malawi’s acting consular general for Tete Province Jane Asani said the line is vital to Malawi which has millions of tonnes of its import passing through Mozambique every year. “This speaks of how a good neighbour Mozambique is to Malawi. This is not just about our two countries but a fulfilment of Sadc regional integration which you (Nyusi) are currently chairing and agenda 2063,” she said. Asani said while Malawi is yet to start the rehabilitation works, there is huge political interest to have the project done on time. She also said Covid-19, among other...

Kenya is the second hotspot for African venture capital(VC) investment having raised $305 million in 2020, according to a new report by AfricArena . According to the report dubbed the state of tech in Africa 2021, most of Kenya's VC financing is derived from foreign investors due to the high number of expatriates in the country. The report also attributes Kenya's perfomance to having a high number of coding schools and being a forerunner in the African fintech space. Nigeria took top spot in Africa having raised $307 million in 2020, Egypt came third with $269 million of funding recorded last year while South Africa had $259 million. Rwanda has also positioned itself as a hub for East Africa and it enjoyed great success with $126 million raised in 2019. Unfortunately the pandemic halted its impressive progress and that figure tumbled 91 percent to just $11.6 million in 2020. The agritech sector grew phenomenally in 2020, with Kenya leading the way, mainly because of massive deals such as the $85million raised by GRO Intelligence, and other big deals in Twiga Foods and Apollo Agriculture. Kenya received the $305million in 52 deals in 2020 averaging $5.9million per deal (second behind Ghana for the highest average deal value). The value of deals in the Kenyan market declined by 46 per cent while the number of deals stayed constant at 52 (with the average also dropping 46%). Venture capital investment into Kenya as a proportion of GDP is the highest in Africa at...

Kenya is commonly considered to be East Africa’s financial hub. Its economic growth has increased steadily in the last decade due to significant political, structural and economic reforms. The SME sector stands out as the key driver of Kenya Vision 2030 which seeks to transform the country into a newly industrialized middle income country by 2030. SMEs are crucial in encouraging industrialization and helping to eradicate poverty by creating employment and raising income levels. Social and Economic Benefits SMEs complement large firms as subsidiary units; because they are more flexible they can effectively meet the needs of the market. They have a facilitative role in entrepreneurial activities across the country in both urban and rural settings, thus contributing immensely towards the socio-economic development and transformation of the country. SMEs are can ensure the achievement of sustainable development goals (SDGs), promotion of inclusive economic growth and sustainable industrialisation and fostering as well as reduction of inequality. There are about 7.41 million Micro, Small and Medium Enterprises in Kenya which contribute approximately 35-50% of GDP. According to the Kenya National Bureau of Statistics (KNBS) 2019 Economic survey, small mostly informal businesses with an annual turnover of less than 500, 000 Ksh recorded an 18 percent increase in annual turnover between the 2018-2019 financial years. During the same period their contribution to job creation was reported to have been over 83.6 percent of the total 840 600 new jobs created. The SME sector showed a great deal of resilience in the 2019 financial year as it continued to...

THE government has said economic diplomacy remains Tanzania’s top priority. It revealed yesterday that during the next financial year, the country’s embassies will be empowered to lure more investors to come and invest in the country. Tabling her ministry’s budget estimates for 2021/2022 fiscal year, the Minister for Foreign Affairs and East African Cooperation, Ambassador Liberata Mulamula , said Tanzanian envoys should foster the country’s economic endeavors abroad. She said the embassies were key in boosting investment and soliciting markets for goods produced in the country, as well as marketing the country’s tourism sector. The minister outlined 12 key priority areas that the ministry wanted implemented in the coming fiscal year, as she requested the House to approve 192.3bn/- in recurrent and development expenditures. Other priorities according to Ambassador Mulamula include bolstering bilateral ties with other countries, intensifying regional cooperation and other international organizations. The minister further said her ministry would continue putting up an enabling environment, coordinating and increasing awareness campaigns to entice Tanzanian citizens living in the Diaspora to contribute to the development of their country. “We will equally, continue protecting and defending the interests of our nation locally and internationally, as well as continuing with our lobbying campaigns to have Kiswahili language used by different countries, at regional and international levels,’’ she noted. Also, Ambassador Mulamula insisted, Tanzania would continue participating in all joint efforts to protect and maintain peace in the globe as well as development through the United Nations (UN). In reducing the cost of...