Businesses are rooting for capping of the common external tariff at 32.5 percent by East African Community member states. East African Business Council’s CEO Peter Mathuki says the new tariff would be presented during the forthcoming EAC member states summit slated for later this month for ratification. The meeting is also expected to deliberate on admission of the Democratic Republic of Congo and Ethiopia, who have expressed interest to join the trading bloc. However, businesses from EAC member states say they have brokered a deal to cap common external tariff at 32.5% with the proposal expected to be presented during the forthcoming EAC summit in Arusha slated for later this month in efforts to harmonize the tax regime in the trading bloc. The council has called on the member states to expedite in establishing a single regional air space and one network area to further lower the cost of doing business in the region. The proposal by the Democratic Republic of Congo and Ethiopia to join the East African Community trading bloc is at an advanced stage. The forthcoming summit is also expected to handle trade issues between member states. Source: KBC Channel

Negotiators have agreed to raise the East Africa Community’s (EAC) upper tariff band to 32 percent, breaking a deadlock that has delayed review of the customs taxes for close to 10 years. At the moment, the region’s three-band common external tariff (CET) structure has an upper rate of 25 percent, which is blamed by the private sector for letting in cheaper goods from outside the bloc. The region currently charges zero percent on raw materials and capital goods, 10 percent on inputs and 25 percent on finished goods imports. In addition, there are a number of products such as maize, rice and textile which the EAC has put under the sensitive list to attract CET at rates between 35 and 100 percent because they can be produced within. The agreement implies that tariffs will be reviewed to charge import duty of 32 percent on all finished goods from non-EAC states. “We mediated and arrived at an upper band of 32 percent, a figure we thought would be favourable to everyone,” said Mr Peter Mathuki, CEO of the East African Business Council (EABC). Through the years of negotiation, Kenya and Uganda have been pushing for a higher upper CET band of 35 percent “to protect the local industries from influx of cheap goods” while Rwanda has been keen on an upper limit of 30 percent. The new band will have to be ratified by the council of ministers before being presented to the Heads of States Summit later this month. Throughout...

The New Partnership for Africa’s Development Infrastructure Project Preparation Facility (NEPAD-IPPF) held its 30th Oversight Committee meeting for the Special Fund at the headquarters of the East African Community, in Arusha, Tanzania. The meeting which took place on the 13th and 14th of February 2020, convened over 30 participants, including donors providing financial support to the NEPAD-IPPF Special Fund, representatives of the African Development Bank, African Union Commission, African Union Development Agency (AUDA-NEPAD), Regional Economic Communities, Regional Power Pools, Corridors Authorities and Transboundary River basin organizations. Members agreed to implement recommendations of NEPAD-IPPF’s independent evaluation held in 2019, and also approved operational reforms and the 2020 work program. EAC Deputy Secretary General in charge of Planning and Infrastructure, Steven Mlote, thanked the Bank for its generous support over the past 20 years which he said had resulted in numerous achievements in various sectors including transport, energy, one stop border posts, ICT and Trans-Boundary Water Projects. He said the recently completed Arusha-Tengeru dual carriageway and the Arusha by-pass had substantially improved traffic flow in the Arusha region while the counterpart section in Kenya – the Taveta-Mwatate road, has opened up a new and shorter trade and transport route for Rwanda and Burundi from the port of Mombasa. “Along the Coast of East Africa, the transport corridor from Malindi in Kenya to Bagamoyo in Tanzania is due for upgrading with funds from the Bank. It is gratifying to note that its preparation was funded by the NEPAD-IPPF. This road will close the missing surface transport link between the EAC and SADC regions which...

Content provided by APO Group. CNBC Africa provides content from APO Group as a service to its readers, but does not edit the articles it publishes. CNBC Africa is not responsible for the content provided by APO Group. The New Partnership for Africa’s Development Infrastructure Project Preparation Facility (NEPAD-IPPF) held its 30th Oversight Committee meeting for the Special Fund at the headquarters of the East African Community, in Arusha, Tanzania. The meeting which took place on the 13th and 14th of February 2020, convened over 30 participants, including donors providing financial support to the NEPAD-IPPF Special Fund, representatives of the African Development Bank, African Union Commission, African Union Development Agency (AUDA-NEPAD), Regional Economic Communities, Regional Power Pools, Corridors Authorities and Transboundary River basin organizations. Members agreed to implement recommendations of NEPAD-IPPF’s independent evaluation held in 2019, and also approved operational reforms and the 2020 work program. EAC Deputy Secretary-General in charge of Planning and Infrastructure, Steven Mlote, thanked the Bank for its generous support over the past 20 years which he said had resulted in numerous achievements in various sectors including transport, energy, one-stop border posts, ICT and Trans-Boundary Water Projects. He said the recently completed Arusha-Tengeru dual carriageway and the Arusha by-pass had substantially improved traffic flow in the Arusha region while the counterpart section in Kenya – the Taveta-Mwatate road, has opened up a new and shorter trade and transport route for Rwanda and Burundi from the port of Mombasa. “Along the Coast of East Africa, the transport...

Importers in East Africa will from July operate under a common Customs bond, which guarantees uniform import duties and taxes across all partner states. Currently, the value of Customs bonds varies from country to country because of the application of different duty rates, valuation and sensitivity of goods. Kenya requires importers of transit goods to secure a Customs bond issued by an insurance company, while delicate or sensitive cargo requires a bank or cash guarantee. In Uganda and Rwanda, the Customs bond is issued by an insurance company with rates based on the taxes charged by the destination country. According to the East Africa Community Single Custom Territory Monitoring and Evaluation Committee, the common Customs bond will reduce the cost of doing business and goods turnaround time. This common Customs bond is expected to be adopted during the Council of Ministers in July as part of the pillar to create a Customs Union. It is meant to create a level playing field for the region's producers by imposing uniform competition laws, Customs procedures and external tariffs on goods imported from countries outside the EAC. The Monitoring and Evaluation Committee met in Mombasa, Kenya to discuss how to tackle the remaining trade barriers. They agreed that enhancing integration of Customs and port functions will ease the seamless exchange of information among partner states. Source: The East African

DAR ES SALAAM, Feb. 13 (Xinhua) --Tanzania's Ministry of Finance and Planning on Thursday signed a facility agreement with Standard Chartered Bank for a 1.46-billion-U.S.-dollar loan to finance the construction of the standard gauge railway (SGR) project from the commercial capital Dar es Salaam to Makutupora in the capital Dodoma. Running approximately 550 kilometers long, the SGR project is one of the country's biggest projects connecting Dodoma to Dar es Salaam via Morogoro and Makutupora, said a statement issued by the Ministry of Finance and Planning. Speaking at the event to sign off the deal, the Minister for Finance and Planning, Philip Mpango, said with the help of Standard Chartered and other partners, the project financing will further increase direct employment in Tanzania. Sanjay Rughani, Chief Executive Officer of Standard Chartered Tanzania, said that deal signified investor confidence in the market and demonstrated Standard Chartered's international network capabilities and commitment to Tanzania. "We are delighted to have reached this milestone in Tanzania to fund the SGR project that will deliver massive benefits to Tanzania and support the government's 2025 vision of making Tanzania an industrialized country," said Rughani. Rughani added that the bank will continue to leverage its unique network reach, and the credibility it has built over time, to further position Tanzania as the go-to destination for investments. Once complete, said the ministry's statement, the SGR project will provide a safe and reliable means for efficiently transporting people and cargo to and from the Dar es Salaam port. According...

The United Kingdom is seeking to enter into a trade pact with the East African Community member countries. The country, which just left the European Union (and into a one-year transition phase), is keen on having long-term and sustainable trade ties with the EAC region. Currently, during the one-year transition period set to end on December 31, the UK-EAC trade engagement will be under European Union protocol where most regional countries including Rwanda apply the Everything But Arms treaty. In an exclusive interview with The New Times UK High Commissioner to Rwanda, Jo Lomas, said that they are looking to negotiate a trade deal somewhat similar to EAC’s Economic Partnership Agreement with the European Union. “We are looking to have a trade deal with the EAC, along the lines of what was agreed upon by the EU. Ultimately, we would like to be negotiating something more ambitious but we are keen not to disrupt trade,” she said. She said that, so far, they have commenced consultations with the EAC secretariat as well as EAC member states, including Rwanda. “We have started to consult with the EAC secretariat and the EAC states on how to take that forward. The Rwandan Minister for Trade was in London and we had an initial discussion,” she said. She noted that the lack of an EAC-EU binding economic agreement necessitated the negotiation of a new one. “If there was trade agreement with the EU already in operation, we would transition to one. At the moment,...

Importers in East Africa will from July operate under a common Customs bond, which guarantees uniform import duties and taxes across all partner states. Currently, the value of Customs bonds varies from country to country because of the application of different duty rates, valuation and sensitivity of goods. Kenya requires importers of transit goods to secure a Customs bond issued by an insurance company, while delicate or sensitive cargo requires a bank or cash guarantee. In Uganda and Rwanda, the Customs bond is issued by an insurance company with rates based on the taxes charged by the destination country. According to the East Africa Community Single Custom Territory Monitoring and Evaluation Committee, the common Customs bond will reduce the cost of doing business and goods turnaround time. This common Customs bond is expected to be adopted during the Council of Ministers in July as part of the pillar to create a Customs Union. It is meant to create a level playing field for the region's producers by imposing uniform competition laws, Customs procedures and external tariffs on goods imported from countries outside the EAC. The Monitoring and Evaluation Committee met in Mombasa, Kenya to discuss how to tackle the remaining trade barriers. They agreed that enhancing integration of Customs and port functions will ease the seamless exchange of information among partner states. To secure cargo movement in the region, the revenue commissioners from Kenya, Rwanda, Burundi, Tanzania and Uganda, who were in attendance, said they were already implementing cargo tracking...

By :  Mbatau Wa Ngai The recent signing of an amendment to the US-Kenya Air Transport Agreement could increase exports to the American market.This is, however, only if Kenya Airways and the government, which is the airline’s main shareholder, play their respective roles with diligence.Specifically, the amendment allows American all-cargo airlines to fly between Kenya and a third nation without needing to stop in the US, an important right when operating a cargo hub.This gives Kenyan all-cargo carriers reciprocal rights to fly into the US. SEE ALSO :KQ Board appoints acting Chief Executive Officer Judicious exploitation of this right could boost the fortunes of Kenya Airways’ cargo subsidiary while also enabling Jomo Kenyatta International Airport (JKIA) to play its rightful role as the regional hub it was meant to be.The signing of the agreement also gives Kenya Airways a lifeline, which it should use to put its finances in order to return to profitability. Admittedly, the national carrier still requires State support to weather the short-term financial headwinds it is facing due to past missteps.Treasury should realise that a successful and profitable airline is an economic enabler for the country like no other, and allowing the collapse of the national carrier would leave the country at the mercy of other airlines—most of them supported by their governments. SEE ALSO :Public relations firm Gina Din sold But last July’s parliamentary vote to renationalise the airline might not be the way to go until the country slays the dragon of corruption that has...

By : DEUS NGOWI in Arusha AS the government of Tanzania walks the talk in the realisation of industrialisation, the country has been picked to host a high level business convention on industrialisation. The business convention with a theme ‘Private Sector- Led Industrialisation through Sustainable Productive and Export Capacities’ seeks to enhance the country’s competitiveness, comparative advantage and the growth of regional value chains in the East African Community (EAC). It is set to further promote the industrialisation development agenda in the country. Its organisers of the event scheduled for Dar es Salaam late next month are the EAC, East African Business Council (EABC), the Confederation of Tanzania Industries (CTI) and Tanzania Private Sector Foundation (TPSF). Tanzania’s Second Five Years Development Plan has identified automotive, petrol, gas and chemicals, pharmaceuticals, agriculture and agro-processing (cotton to clothing, textiles and garments, leather and edible oil) as priority sectors for industrialisation. At regional level, the EAC industrialisation strategy aims at increasing intra-regional manufacturing exports to at least 25 per cent and the share of manufactured exports relative to total merchandise exports to at least 60 per cent by 2032. EABC Chief Executive Officer, Dr Peter Mathuki, said the convention would be going in the same way as stipulated in the FY DP II. Industrialisation is the allencompassing policy priority guiding the design and implementation of policies and strategies aimed at achieving the objectives of Tanzania’s Five-Year Development Plan from 2016/17–2021/22. “The industrial sector in the EAC contributes about 8.9 per cent to the...