Reports that Kenya has suspended a recent order that all transit cargo be transported using the Standard Gauge Railway to the Naivasha Inland Container Depot has offered temporary relief to investors in the logistics sector. On Tuesday last week, Transport Cabinet Secretary James Macharia held a virtual meeting with Northern Corridor stakeholders where the directive was communicated after a heated discussion. The meeting came hot on the heels of a letter from the Uganda government opposing the move to transfer the transit cargo to the new facility. At the port of Mombasa, we confirmed that only long-stay transit containers were being railed to the Naivasha ICD. It was, however, not immediately possible to establish the number of such containers. “Yes, transit railings is now optional,” confirmed Kenya Ports Authority (KPA) head of corporate services Bernard Osero. Local and foreign clearing and forwarding firms, container freight stations and transport firms have warned that they risk collapsing if the State presses ahead with its decision to evacuate all cargo to the hinterland. Alternatively, they will be forced to relocate to Nairobi, Naivasha or further up along the busy corridor. This, however, has done little to allay their fear that the economies of the coastal region and towns along the Mombasa-Nairobi highway will be destroyed. Macharia had earlier stated that one of the reasons for using the railway was to protect truck drivers from contracting the coronavirus disease. On average, 1,500 trucks laden with cargo leave Mombasa every day and there have been fears that...

Maersk Shipping Line and China Ocean Shipping Company have signed a sharing agreement to increase their network in the Eastern Africa region. In the new joint service -dubbed “Mashariki”- the two shipping companies will ensure a dedicated service for both port of Mombasa in Kenya and Tanzania’s Port of Dar Es Salaam. This is a boost to the Port of Mombasa as it will be directly connected to Port of Shangai in China. It will provide to customers, who are served via the port of Mombasa, great access to one of the key markets in China. Furthermore, export customers will experience a great enhancement with cargo from Mombasa to Asia moving on average two weeks faster. From Mombasa, Maersk offers end-to-end transport solutions to many of company’s customers based in Kenya, Uganda and South Sudan for both dry and refrigerated cargo. On Friday, MV Cosco Yinkou became the first ship to arrive in Kenya under the Maersk-Cosco agreement. According to Kenya Ports Authority acting Managing Director Rashid Salim, the new caller, MV Cosco Yinkou, recorded the best performance of 362 crane moves per shift. Source: the-star.co.ke

The war on illegal sea trade has been heightened as navy officers step up operation at the Coast. The Kenya Navy has, together with the Kenya Coast Guard Service (KCGS), increased their patrols on the Indian Ocean to tame illicit trade. The security operation is targeting illegal fishing, drugs trafficking and sea pollution among others. “As a part of a multi-agency collaboration, the Kenya Navy and the Kenya Coast Guard Services' personnel today conducted a joint patrol at the South Coast's brown waters to curb illegal trade,” said the Kenya Defence Forces (KDF) in one of its operation posts on Twitter. It is estimated that the country loses at least Sh10 billion in revenue annually due to illegal and criminal activities at sea. The Twitter update on the patrol last week came as KCGS Director-General Vincent Loonena met with Kenya Ports Authority (KPA) acting managing director Rashid Salim to discuss maritime safety. KPA is a member of the Coast Guard technical committee where it plays an advisory role. The maritime agency was established by President Uhuru Kenyatta with its key roles being ensuring safety of the country’s territorial waters, safeguarding the ports and prevention of dumping of harmful wastes and pollutants in the sea. The Coast Guard also has a role in ensuring that vessels, sea farers and all sea users have the necessary licences for their operations at sea — whether work, leisure or business. It also offers search and rescue services and prevent illegal commercial activities such as...

East African countries are likely to lose more than $5 billion in foreign earnings from agricultural exports this year as a direct result of the effects of the Covid-19 pandemic, and uncoordinated individual countries' mitigation and containment responses. With agriculture being one of Africa's most important economic sectors, making up 23 per cent of the continent's GDP and employing nearly 60 per cent of the economically active population, the disruptions being witnessed now means roughly half of the almost 670 million people face food insecurity. TRADE DISRUPTION Some 250 million are considered severely food insecure and the numbers might increase if the right measures are not taken. There is already reduced food demand, disruption of trade in export crops even within regions, and severe crop production and processing shocks. According to McKinsey & Company's latest report Safeguarding Africa's Food Systems Through and Beyond the Crisis, the supply disruptions could result in a severe economic blow for countries such as Kenya, Tanzania, and Uganda which rely on agricultural exports as primary or secondary source of export earnings. "Africa's exports of food and agricultural products are worth $35 billion to $40 billion a year, and some $8 billion a year flows through intra-regional trade in these products," says the report. CARGO COST INCREASE "In addition, Africa's food and agricultural imports amount to between $45 billion and $50 billion a year along with $6 billion a year in imports of agricultural inputs and if measures are not checked, we are likely to lose...

FACILITATING the free movement of cargo across borders is vital towards the economic recovery of the East Africa member states during and post Covid-19 pandemic, the East African Business Councils (EABC) has said. The EAC private sector body said recently that the cross border trade could have been a remedy to reduce the Covid-19 adversity through flow of essential goods like food, medical supplies and other hygiene products. The spread of Covid-19 has increased restriction on the movement of goods and people across borders threatening the livelihoods of traders and their families, and reduced revenue for partner states. When trade barriers remain unaddressed, the EABC said the economic recovery from the virus pandemic may take long time with the far reaching effects continue to bite member states. The characteristic nature of cross border trade in the region is conducted informally and mostly occupied by vulnerable, small and unregistered traders. Similarly, a significant portion of trade between East Africa and the rest of the world largely constitutes of primary commodities with huge prospects in exporting finished products. As the cross border saga on the free movement of goods and services persist, the EAC private sector body has called on the need for lasting solution to the barriers hindering the free movement of cargo across EAC borders and in particular, the borders between the two countries. For example, the 14 days standstill on the movement of goods between Kenya and Tanzania borders risks business continuity and affects intra-EAC trade. There are over...

Alec Ross, the author of Industries of the Future, opined in 2017 as the world embraces digital trade in goods and services, data remains its key raw material. Over the past few weeks, there have been a number of commentaries on the ongoing Kenya-United States negotiations of a bilateral trade agreement following a meeting between presidents Uhuru Kenyatta and Donald Trump in February. In a 19-page “Summary of Specific Negotiating Objectives” by the Office of the United States Trade Representative Executive Office of the President, a number of issues were highlighted and have elicited debate, among them, cross-border data flows. Data has become crucial in trade agreements. As more nations come to the realisation of its importance, most trade pacts contain provisions on data. In light of the proliferation of North-South Free Trade Agreements (FTAs), that is, agreements between the developed countries and the less developed, it is important that trade policy negotiators look at data provisions in these agreements with a tooth-comb. As the East African Community (EAC) countries continue to negotiate these FTAs, there is no better time to hold discourse on the place of data, especially regarding national security, transferability and localisation. The EAC is bereft of any serious provisions on data. Yet as e-commerce grows, digital trade will encompass a considerable chunk of these agreements. The World Trade Organisation (WTO) does not have a legal framework on this, meaning countries entering into agreements are largely left to their own devices. The WTO’s position on this is...

The Government of the Democratic Republic of Congo and TradeMark Africa (TMA) signed a contract to begin construction of the One-Stop Border Post (OSBP) at Mahagi in Ituri Province, on the border with Uganda on April 16, 2020.  The estimated nine-month project is co-financed by the Netherlands, through its Ministry of Foreign Affairs, and the British Department for International Development (DFID).  The works will be carried out by COIL limited. The kick-off meeting was held online on April 30, 2020 due to the precautionary measures related to COVID-19.  A ground-breaking ceremony will be held as soon as the situation allows.  COIL limited has begun mobilising the necessary staff and resources to start construction work soon. Mahagi (DRC)/Goli (Uganda) is one of DR Congo’s busiest border crossings, located at the axis linking the popular centres of Arua (Uganda), Bunia (DRC), Kisangani (DRC) and the port of Mombasa (Kenya) along the Northern Corridor. OSBPs reduce transit time and costs for cross-border movements by integrating Customs processes of border agencies of two neighbouring countries in one place without increasing risks to public security or revenues collection. Transiting users stop once in the destination country for customs clearance, entry and exit processes. In 2019, TMA supported the construction and initiation of One-Stop Border Posts across 7 border crossing points in the East African Community (EAC) Partner States and the Tunduma border post between Tanzania and Zambia. A survey of time and traffic to cross these borders showed that they have contributed to reducing crossing times by an average of...

It is hard to see how African economies will bounce back to the vibrant fast growing hubs that they were over the past two decades, the pre-corona era. Countries like Rwanda that led East Africa (and most of the World) with annual economic growth averaging 9.4 percent now looks at annual growth rates of a mere 2 percent.  When the tourism and hospitality industries reopen their doors, will tourists and holiday maker flock in triple and quadruple their previous numbers and will they do so long enough for the industries to stabilize and resume growth? Will air travel shake off the blow it has taken, will it be willing to pocket less profit to attract business or will it hike prices to capitalize the anticipated initial high demand post the pandemic?  How individual industries will raise from the ashes of the pandemic is anyone’s guess but should recovery of global economies, especially of vulnerable third world countries like those in Africa be left to the invisible hands of commerce or should concerted regional and continental strategies be tabled?  Dare I say, it seems that the continent has again been stooped into the ill fated philosophy of individualism; it has again been divided and is again on the verge of been conquered. Just like they took individual course of action when the pandemic befell the continent, countries are destined to make individual response strategies, prioritizing self over whole.  Already this autonomy approach to the pandemic has rendered regional blocs asunder. Hard...

East African Community finance ministers have agreed on measures to protect and enhance the competitiveness of the regional manufacturing industry ahead of the conclusion of a comprehensive review of the Common External Tariff (CET) that has dragged on for more than three years. In his budget speech on Thursday, Kenya’s Finance Minister Ukur Yatani said the new measures on Customs duty were agreed on at the regional level at the EAC Pre-Budget Consultations meeting for the 2020/2021 fiscal year. Customs taxation measures will take effect on July 1, 2020, and regional governments have agreed to maintain a 35 per cent import duty rate, with the corresponding specific rates on a wide range of iron and steel products for another year, to protect the metal and allied sector from competition from cheap imports. DUTY-FREE IMPORTS In addition, all inputs for the manufacture of baby diapers will also be imported duty free under the EAC Duty Remission Scheme to support the local manufacturing of these products. Inputs used in the textile and apparel sector will be imported duty free under the scheme to promote local production of new clothing and apparel including fashion and design. “I have proposed at the regional level, measures aimed at promoting local manufacturing and also measures to ensure that locally manufactured products are competitive,” said Mr Yatani.   EAC Finance ministers have also agreed that inputs for assembly or manufacture of mobile phones be imported duty free under the EAC Duty Remission Scheme to enhance innovations particularly...

Kenya will address delays and backlog of trucks at the borders in a week's time, Industrialization, Trade, and Enterprise Development Cabinet Secretary Betty Maina has said. Even so, trust issues around Covid-19 tests continue to play out at the borders with Tanzania and Uganda, with drivers from either side complaining of discrimination and lack of transparency in the processes. Speaking to the Star yesterday, CS Maina said the  government has increased testing capacity at its borders to ensure speedy clearance of truck drivers. The CS last week during a Webinar by consultancy firm Delloite assured of government's commitment to support cross-border trade. “Nobody wants disruption of business,” the CS told the Star yesterday, “We have increased capacity to clear backlog.” She however insisted drivers must take tests before commencing their journeys. Under the guidelines in place, truck drivers test and receive Covid-19 results in a minimum time of 48hours before being proceeding with their journey. “In the context of Covid, we must ensure we support the health ministry and that we conduct safe trade,” CS Betty said. Most affected borders are the busy Kenya-Uganda border of Malaba and the Kenya-Tanzania border of Namanga. At Malaba, delays have caused a long queue with trucks stretching more than 50 kilometers on either sides. Kenyan truck drivers have accused Ugandan authorities of harassment once in their territory, where they are denied access to amenities such as toilets and hotels. “They eat, sleep, relieve themselves in the trucks,” Kenya Transporters Association (KTA) chief executive...