The Secretary General (SG)of East African community (EAC), Liberat Mfumukeko has said that the Bill for the establishment of the East African Monetary Institute (EAMI) has been assented to by the Summit of Heads of State, adding that the EAMI would later be transformed into the East African Central Bank that would issue the single currency. EAC Partner States are in the process of harmonizing critical policies and putting in place the requisite institutions to attain a single currency for the region by 2024 as outlined in the EAC Monetary Union Protocol. “The establishment of this institute will help to provide impetus towards the formation of the East African Monetary Union, which is the third pillar of our integration,” said Mfumukeko. Amb. Mfumukeko disclosed that the Council of Ministers had approved the EAC Domestic Tax Harmonization Policy, adding that proper implementation of the policy would reduce tax competition thereby enhancing cross-border trade and investment in the region. On the Financial Sector, the SG said that the Community had developed requisite legal instruments (Bills) for the insurance and microfinance sub-sector and strategies for implementation of financial education and insurance certification. “Further, we implemented the financial market infrastructure for payment and settlement systems as well as finalized regional regulations for portability of pension benefits and consumer protection,” he added. Mfumukeko was giving his New Year’s Address to the Staff of EAC Organs and Institutions spread across East Africa from the EAC Headquarters in Arusha, Tanzania. He said that Community would have in...

TANZANIA is planning to boost business flow to the Democratic Republic of Congo (DRC) through Lake Tanganyika by addressing non-tariff trade barriers. The non-tariff trade barriers are cited as major impediments to movement of goods and people between the two bordered countries. Industry and Trade Deputy Minister Eng. Stella Manyanya said recently that the plans include proper utilisation of the marine vessels voyaging in Lake Tanganyika-- providing reliable transport to the citizens of the two nations. “MV Lihemba is the main ship currently traversing Lake Tanganyika but the plan is to have more ships to simplify business from Tanzania and DRC. This will go hand in hand with modernising ports in Rukwa and Katavi regions. The move is aiming at granting people with more opportunities to trade minus obstacles,” she said. Lake Tanganyika is the second deepest freshwater body in the world as it has a depth of 1,470 metres on average. Apart from the envisaged construction of new ships, the deputy minister said that other infrastructures including road networks were in the making and that the two governments of Tanzania and DRC were communicating on the best ways of ensuring that there is a dependable and passable road network connecting the lake side areas with other parts of DRC. “The major impediment is lack of dependable road network from Lake Tanganyika to the Tanganyika province in DRC, however, this is also being discussed and soon will bear fruit,” she said. Tanzania trades with DRC in various sectors including agricultural...

Transit  goods to Uganda and Rwanda now takes an average of four to five days after Kenya Revenue Authority introduced real-time cargo tracking. This, according to KRA has cut transit time by more than 75 percent in return boosting trade at the Mombasa port. The Regional Electronic Cargo Tracking System(RECTS) integrates tracking platforms in Kenya, Uganda and Rwanda has reduced transit time between Mombasa and Kampala from an average 21 days in 2017. It now takes an average three days to move cargo from Mombasa to Busia and Malaba borders. Cargo destined for South Sudan reached Uganda's border point of Elegu in an average 3.7 days, with that heading to Burundi and DR Congo taking less than a week, compared to the previous two to three weeks. This has helped address cargo delays and theft which for decades affected importers and exporters, whom have previously been paying high insurance cover for their cargo. RECTS ensures trucks are fitted with GPRS enabled electronic seals that relay real time movement of units, content and driver's details. In case of a breach on the seal, real time information is relayed to the Centralized Monitoring Centre's with the exact location of the truck and a Rapid Response Unit is dispatched to secure the cargo. “We use risk management module to identify risky goods. These trucks are monitored all through to the final destination where a customs officer disarms the seal, "said Jeremiah Kosgei, head of the Centralized Monitoring Centre. He said when a truck...

The Uganda National Roads Authority (Unra) has unveiled plans to rehabilitate and expand the Masaka-Kyotera-Mutukula road. The project is to be funded by the African Development Bank under the New Partnership for Africa’s Development programme of the African Union. Mr Mark Ssali, the head of public and corporate affairs at Unra, said the road will expanded to a single carriageway. “The total road way shall be 11m wide except for Kyotera Town where the road will include a parking lane of 3 metres,” he said in an interview at the weekend. Mr Ssali revealed that the new road designs are expected to be ready by March and thereafter construction works will commence. “Once the design studies are concluded, the East African Secretariat will secure funds for the road implementation under the similar arrangement,” he added. Mr Ssali said the Masaka-Kyotera-Mutukula highway has been prioritised for expansion because it links the central corridor to the northern corridor, which are the main transit routes in the East African region. “This project is part of Mutukula-Kyaka/Kasulo-Kamunazi and Bugene-Kasulo road on the Tanzanian side, which serve as an alternative route to the coast for Uganda through the Dar es Salaam port,” he said. Rising case Since 2017, there has been a remarkable increase in volumes of transit cargo through Mutukula border ever since it became a one-stop border post, which operates 24 hours daily. Transit goods, passengers, travellers and exports exiting through Mutukula to either Tanzania or Uganda stop once for clearance by immigration...

The Kenya National Highway Authority (KeNHA) has started the process to construct part of the 460-kilometre East African Coastal Corridor development project. Tenders were advertised for the two phases of the 13.5km Mombasa—Mtwapa (A7) section, which entails the construction of a four-lane dual carriageway. The works include construction of a grade separated junction, service roads, storm water drains, major and minor drainage structures, access roads and social amenities along the road. The project has already received funds from the African Development Bank (AfDB) and a grant from the European Union. Last June, Gabriel Negatu, East Africa director general of AfDB said construction of the road would begin this year. “Both the Kenya and Tanzania governments have finalised all their requirements to pave way for the construction of the coastal highway,” Mr Negatu said. The Coastline Transnational Highway project, conceived more than two decades ago, covers Bagamoyo-Tanga-Horohoro on the Tanzania side and Lunga Lunga-Mombasa-Mtwapa-Malindi on the Kenyan side, and is expected to cost $751 million. According to an agreement signed last November, AfDB will finance 70 per cent of the highway and the governments of Kenya and Tanzania will cover 30 per cent. Last December, AfDB approved of the $384.22 million financing package for the road construction a few months after the EU gave a grant of $33.41 million or 7.7 per cent of the total project cost to the government of Kenya. The road is a priority item in AfDB’s Eastern Africa Regional Integration Strategy and the Country Strategy Papers...

The ongoing Kenya-Uganda trade dispute on milk tariffs could deal a blow to hopes of Common External Tariffs (CETs) and Non-Trade Barriers(NTBs). The differences between the two neighbours started in December when Kenya introduced a 16 per cent value-added tax (VAT) on milk imports from Uganda as part of measures cushion the local dairy sector. This was later followed by the seizure of Lato milk produced by Uganda's Pearl Dairy by Kenyan authorities. Uganda has threatened to retaliate. The country's minister for East Africa Community Affairs Julius Muganda told the New Vision newspaper that Uganda will retaliate by targeting a number of Kenyan goods, key among them packed juices, assorted household items and roofing materials in a similar protectionist move. This comes just ten days after Uganda's Ministry of Foreign Affair wrote a protest letter to Kenya, demanding immediate and unconditional release of 23 tonnes of Lato milk impounded starting late December. “Cease any operations specifically targeting Ugandan made milk exported to Kenya. Refrain from any actions against Uganda’s exports to Kenya be it milk or any other products that contravene the EAC customs union and common market protocol,'' the protest letter read. It further asked Kenya to take responsibility for any spoilage of products seized and losses suffered. Kenya, Uganda said should address any trade concerns within the EAC and bilateral frameworks instead of resorting to arbitrary means that could jeopardise trade relations. Kenyan officials did not respond calls or messages on the position taken by Uganda. The simmering hostility Kenya...

While Kenya and Tanzania have attempted to join global trade through the production of goods in special economic zones, high labour costs threaten to hamper their effort, says World Bank Group chief economist Pinelopi Koujianou Goldberg. Now, companies are avoiding the region because of the existing poor infrastructure, restrictive trade and investment policies and low adoption of international qualities and standards have made companies avoid East Africa, and in the process crippling the take-off of the manufacturing sector and killing the dream of industrialisation. In Kenya and Tanzania, manufacturing labour costs stand at $2,200 and $1,700 annually, respectively, compared with $900 in Ethiopia and $800 in Bangladesh. “Kenya has underperformed in its participation in global value chains even after transitioning to basic manufacturing,” said Ms Goldberg during a media briefing in Nairobi. She added that even after transiting from a commodity-based GVC to limited manufacturing of mainly agribusiness and apparel within the Export Processing Zones, Kenya’s participation has only increased by 10 percentage points in a quarter of a century. While Vietnam and Mexico witnessed a significant 57 per cent growth in per capita, Kenya’s growth was a mere four per cent. “GVCs translate into faster growth in per capita but we have not seen that in Africa,” she noted. She added that GVCs can continue to boost economic growth, create better jobs and reduce poverty if developing countries undertake deeper reforms and developed nations pursue open and predictable policies. The World Bank contends, a one per cent increase in...

The UK this past week opened a new chapter in its relations with African countries at a summit to set the tone for the country’s trade and diplomatic ties with the continent after exiting the European Union. British Prime Minister Boris Johnson hosted leaders from 21 African countries in London, where 27 deals worth an estimated $8.5 billion (£6.5 billion) were signed at the UK-Africa Summit held on January 20. The summit came just months after Japan and Russia hosted African leaders in their respective capitals last year. “We want to build a new future as a global free trading nation, that’s what we are doing now and that’s what we will be embarking on, on 31st of January,” Mr Johnson told the gathering in London. “But I want to intensify and expand that trade in ways that go far beyond what we sell you or you sell us.” The tone of the meeting signalled a shift in Mr Johnson’s attitude towards Africa. Eight years ago, as mayor of London, he wrote a commentary in the Spectator Magazine suggesting that Africa would have been better off if the UK was still its colonial master. Britain expects to start an 18-month transition from being a member of the EU beginning January 31, to being an independent country capable of signing bilateral or multilateral trade deals. Britain may have to renegotiate all trade deals initially signed under the EU, including with African countries. In the EAC, for example, Britain had been a...

With the AfCFTA expected to increase intra-African trade by 52 per cent by the year 2022, the journey towards making it a reality is in high gear. The Africa Continental Free Trade Agreement seeks to have the removal of tariffs on 90 per cent of goods traded within the continent. Towards this, UNCTAD and the African Union have developed an online platform to help remove non-tariff barriers to trade in Africa. The tool became operational on January 13. Moving goods across the continent Traders and businesses moving goods across the continent can now instantly report the challenges they encounter, such as quotas, excessive import documents or unjustified packaging requirements. To improve the movement of goods across the continent and reduce the cost importers and exporters in the region face, the tool will help African governments monitor and eliminate such challenges which slow trade costing the continent billions of dollars annually. The African Union’s Agenda 2063 seeks to transform Africa into a global powerhouse of the future. The need to envision a long-term 50-year development trajectory for Africa is important as the continent needs to revise and adapt its development agenda due to ongoing structural transformations; increased peace and reduction in the number of conflicts; renewed economic growth and social progress; the need for people-centred development, gender equality and youth empowerment; changing global contexts such as increased globalization and the ICT revolution; the increased unity of Africa which makes it a global power to be reckoned with and capable of rallying support around its own...

Trade wars and border blockades within the East African region cost Uganda $454.7m (Shs1.6 trillion) worth of export revenue for the year ended December 2019, according to data sourced from Bank of Uganda, Uganda Revenue Authority and Uganda Coffee Development Authority. The data indicates that Uganda lost much more revenue from Kenya and Rwanda compared to other EAC member states. For instance, according to the data, Uganda’s export receipts from Rwanda declined to $173m (Shs640b) in 2019 from $250m (Shs925b) in 2018. Uganda at last lost $75.6m (Shs280b) of revenue specifically due to a decline in exports from companies such as Hima Cement, Roofings and Movit, among others. Exports revenue to Kenya, according to the data, declined to $535m (Shs1.9 trillion) in the period from $825m (Shs3 trillion) in 2018. This means that at least export revenue worth $290m (Shs1 trillion) was lost mainly due to cautious purchase of Uganda’s maize, sugar, beef and poultry products. Cautioned  Kenya, despite experiencing scarcity and low supply of maize on its market, cautioned against Uganda’s maize on claims that it contained aflatoxins, a poisonous substance that is produced by molds. The country has also not fully embraced Uganda’s poultry products despite lifting a ban against the same in 2018. Kenya and Uganda are currently involved in a milk export war, which by last week had at least cost Uganda about Shs1b worth of export revenue, according to details from Private Sector Foundation Uganda. Rwanda continues to maintain a blockade at the Katuna border...