East African finance ministers converged on tough taxation measures aimed at protecting local manufacturers from “unfair imports competition,” in their spending plans for the coming year, made public on Thursday. Most of the tax measures, contained in the budget statements for the 2019/2020 fiscal year, were approved during the ministers’ pre-budget consultations in Arusha in May. Higher taxation of imports is aimed at driving consumption of cheaper locally produced goods, spurring the growth of manufacturing and creating jobs that ultimately improve living standards. Proponents of the proposed measures are in line with the EAC Industrialisation Plan that seeks to transform the region into a globally competitive, environment-friendly and sustainable industrial sector that is capable of significantly improving the living standards of the people by 2032. “The recommendations aim at pushing the regional industrialisation policy, creating jobs and improving East Africans’ living standards,” said Philip Mpango, Tanzania’s Finance and Planning minister. Uganda, Tanzania, Rwanda and Kenya are focusing on improving the competitiveness of local industries by protecting them from cheaper imports through taxation and other policy measures. Despite the good intentions, experts have warned that these tax measures — which are also applicable to goods coming from EAC member states — could stand in the way of integration, as each country becomes inward-looking in a bid to build its industrial capacity. Already, trade spats, especially between Kenya and Tanzania, have seen Dar es Salaam block Kenyan products from its market. The partners have also failed to agree on a reviewed common...

Kenya’s budget is the highest in East Africa region exceeding that of Tanzania, Uganda, and Rwanda.The three nations presented their 2019/20 national budgets before respective parliaments at the same time on Thursday.Kenya’s 2019/20 budget stands at Sh3.02 trillion followed by Tanzania (Sh1.4 trillion), Uganda (Sh1.08 trillion) and Rwanda at Sh316 billion. Rwanda, Tanzania, and Uganda 2019/20 national budgets total to Sh2.8 trillion that is around Sh200 billion less Kenya’s budget. Rwanda Rwanda said its overall spending will rise 11 per cent in 2019/20 (July-June) fiscal year to Sh316 billion, while 2019 economic growth will be slower than a year earlier, its finance minister said on Thursday.The finance minister Uzziel Ndagijimana proposed that 85.8 per cent of the budget would come from internal sources, and the rest from external grants. The economy is projected to grow 7.8 per cent in 2019 from 8.6 per cent in 2018, he said. Tanzania According to Tanzania's finance minister, the country's overall spending during the 2019/20 period will rise 2 per cent to Ksh1.4 trillion. Philip Mpango, its finance minister told parliament on Thursday that the John Pombe Magufuli led government also plans to borrow Tsh2.32 trillion from external non-concessional sources.Tanzania is East Africa’s third-largest economy and is investing heavily in public infrastructure projects as it seeks to profit from its long coastline and upgrade its rickety railways and roads to serve the growing economies in east and central Africa. Uganda Uganda finance minister Matia Kasaija said the government spending is set to rise 23...

It will soon be easier for Kenyan businesses to export goods and services to the rest of the continent once the African Continental Free Trade Agreement ( AfCFTA) is operational. The pact is also set to open up the Kenyan market to an influx of imports from other African countries. The AfCFTA is a pact 44 African countries signed last year, establishing the largest Free Trade Area in the world in terms of the number of participating countries and the population. A free trade agreement is one entered into by several nations to open up their markets by reducing or abolishing tariffs on imports and other barriers, for example, stringent licensing requirements for foreign businesses. It, therefore, means that the price of an imported product would almost be at par with the that of a locally sourced good, increasing market access for entrants. One of the things that make imported goods more costly than local products is the tariffs and taxes paid. A free trade agreement may reduce or abolish such tariffs, reducing the price of the import. This leads to stiff competition between the local products and imports. The immediate impact of the AfCFTA is increased market access for businesses. Some markets were difficult to access due to trade barriers, which made it very difficult for foreign businesses to operate. It will now be easier to export products to these new markets. It will also be easier for Kenyan businesses to import products from other African countries at a...

The port of Mombasa handled 29.8 million tonnes during the last 11 months, Kenya Ports Authority managing director Dr Daniel Manduku has said. Manduku said in the period between July 2018 and May 2019, the port of Mombasa registered volume increase of 1,760,166 tonnes to hit the 29,801,152 tonne mark, which is 6.3 per cent increase compared to corresponding period in 2017/18. In a statement, Manduku said the positive performance was mainly driven by containerised cargo, which recorded a positive variance of 2,057,838 tonnes, an 18.9 per cent growth. The port, which is connected to more than 80 ports globally and is served by more than 40 shipping lines, handled 1.26 million containers in the last 11 months. Manduku said the container traffic at the port of Mombasa grew from 1,114,768 Total Equivalent Units (TEUs) in the 2017/18 period to 1,261,327 TEUs in the 2018/19 calendar. “This was an increase of 146,559 (TEUs), which is 13.1 per cent growth compared to the previous corresponding year of 2017/18,” said Manduku. Import containerised traffic also posted an increase growth by 4.9 per cent to record 557,097 TEUs up from 531,204 TEUs in a similar period in 2017/18. Export traffic registered an increase of 13.9 per cent, growing to register 557,238 TEUs from 489,164 TEUs in a corresponding previous period. “The total transit cargo recorded 3,327,377 tonnes against 3,022,533 tonnes registered in the same period in 2017/18, representing volume increase of 304,844 tons or 10.1 per cent,” he said. He added: “The positive...

Dar es Salaam. Minister for works, transport and communication Mr Isack Kamelwe said that the capacity of Dar es Salaam port to handle containers will soon double after completion of the expansion project at the the port. According to Mr Kamwele the port currently has the capacity to handle between 3000 and 4000 containers but after completion of some projects, which the government is undertaking, the port will have the capacity to handle a vessel carrying more 6000. Mr Kamwele was speaking during a tour of the Democratic Republic of Congo (DRC) President Felix Tshisekedi, who toured the port during his two-day state visit to Tanzania. According to the minister the improvement wouldn’t only benefit Tanzanians but also other land locked countries. Some of the projects, which are implemented to improve the port’s capacity include repairing of berths one to eight. He also pointed out that some infrastructures in the port, which includes roads will also be repaired. “We are doing all in our capacity to improve the port’s efficiency,” Mr Kamwele told the DRC president. Source: The Citizen

The Democratic Republic of Congo has applied to join the East African Community in a move that could potentially expand the boundaries of the trading bloc to the Atlantic coast of Africa. The application comes following months of talks between DR Congo President Felix Tshisekedi and Rwanda President Paul Kagame, who chairs the East African Community. Sources familiar with the diplomatic talks that preceded the formal application say most EAC member states are enthusiastic about DR Congo’s membership. The DRC officially communicated its intention to join the EAC in a letter to President Kagame dated June 8. Kinshasa said its desire to join the bloc was informed by its increasing trade ties with the region. In response, President Kagame directed the EAC Secretariat to table DR Congo’s application for discussion at the next Heads of State Summit in November. If it meets the admission requirements, members will vote on its admission. GAME CHANGER The potential membership of the Central African country is being viewed as a game-changer, given its natural resources wealth and a huge consumer market of 81 million people. It is the world’s biggest producer of cobalt, a major component in the manufacture of rechargeable batteries for electric vehicles, and Africa’s main copper producer. It also a major producer of gold, diamonds, uranium, coltan, oil and other precious metals, making it one of the most resource-rich countries in the world. DR Congo is also host to the world’s second-longest river, the Congo, vast swathes of fertile soil, potentially...

The recent ratification of the African Continental Free Trade Area (AfCFTA) has created a promising environment for economic integration of major African markets with the smaller markets and enhance competitiveness at the industry and enterprise level by exploiting opportunities for scale production, continental market access and better reallocation of resources. The eventual implementation of AfCFTA is predicated on the assumption that the reduction of tariff between African countries would increase intra-African trade by 15 to 25 percent (amounting to about 50-70 billion USD) by 2040. The intra-continental trade in Africa would create a very large single market which would allow member states to build better resilience to resource allocations and price fluctuations even as they diversify their export portfolio. However, creating a single large market will require a massive amount of physical infrastructure facilitation. The continent will see itself placed in a catch 22 situation as it will need to invest trillions of dollars in infrastructure to spur contact and build growth momentum in the region. This figure would increase if the costs associated with climate change mitigation and adaption were to be included. For the development to be inclusive, the concept will have to build beyond better harmonization and coordination of trade liberalization across Regional Economic Communities (RECs). Improved customs procedures alone will fail to stimulate the markets unless finance is made available to small and medium sized enterprises, and women entrepreneurs are given adequate resources to participate meaningfully in exports. While the continent-wide free trade agreement has been...

The Democratic Republic of Congo (DRC) has written to President Paul Kagame, current chairperson of the East African Community asking to join. A letter dated June 8, 2019 and signed by the head of State, Felix Tshisekedi expresses an interest DRC has in joining the community now made of 6 country members – South Sudan being the latest. “Following the conversation we had in Kigali and later on in Kinshasa and the interest that showed my country to adhere to the community of the East African Community, I am honored to make an official adhesion request,” reads the letter addressed to President Paul Kagame in part. Tshisekedi said that, the decision is informed by the “increasing trade between his country and the EAC country members.” “Would you kindly present to your counterparts – heads of state – our passionate wish to join the organization so that we can contribute to the development of this sub-region,” the letter reads. Rwanda, Uganda, Tanzania, Burundi, Kenya and South Sudan are the six member states of the EAC. ‘The giant of Africa’ totaling 2.3 million square kilometers with 81.3 million habitats(2017),DRC is a big trade to all the EAC member states. News of the DRC’s request to join EAC was confirmed by Olivier Nduhungirehe, State Minister in charge of East African community at Rwanda’s Ministry of Foreign Affairs and International Cooperation.   Source KTC Press

The President indicates that the fair is taking place when Burundi has just developed its own development plan, which is a first national development plan developed by the Burundians themselves. The Head of State proceeding to the official opening of the Industrial Fair He pointed out that in the field of industrial policy, the government’s intention is to establish an industrial platform favorable to employment and youth and industrial know-how. Thus, Mr. Nkurunziza recommended to the ministry having the industry in its attributions to submit without delay to the council of ministers the national policy on industrialization based on the national development plan 2018-2027 and without omitting the considerations sub-regions in this area. “We want an industry that respects environmental and international requirements and adds value to jobs and economic growth,” he said. It also meant that he expects from this industrial fair, training, employment, respect for environmental standards and social responsibility. “My first goal is to reconcile young people with their land, their heritage, and their territorial identity,” he continued. Mr. Nkurunziza then believes that after the show these young people with an industrial vocation will be certain to be able to pursue a professional career at home in Burundi and for a long time. Meanwhile, Olivier Suguru, the President of the Association of Industrialists of Burundi (AIB) has said that this 2nd edition will serve as a meeting place for professionals from the sector of the sub-region and the rest of the world to exchange experience and forge win-win partnerships. An opportunity...

For the first time, one of East African Community member states Burundi unveiled its budget concurrently with Kenya, Tanzania, Uganda and Rwanda who have presented annual spending plans for 12 consecutive years together.   Kenya’s Ksh 3.02 trillion 2019/2020 budget by Treasury CS Henry Rotich dwarfed all four with Burundi having the lowest budget at just 82.4 billion shillings. The government of Tanzania eliminated and reduced 54 licenses and fees as they had previously agreed with the private sector in the “Blueprint for improvement for the regulatory environment”. the Tanzanian government has also imposed new taxes on wigs, licenses fees, and sanitary towels in the new budget. In Uganda Finance Minister Matia Kasaija has allocated an additional Ush 1,500 billion to security so as to enhance its capacity. Ush 1.054.6 bn has also been allocated towards agriculture. In the budget, an additional Ush 57.8 billion has been provided to the Uganda National Roads Authority (UNRA) to embark on the south-west tourism circuit. The scheme to enhance financial credit for youth and women was enhanced with Ushs130 bn and Ush 32bn respectively. There was also an increase in the budget allocation for education in Uganda where the previous year they allocated Ush 2781.1 billion in 2018/2019 while this year they have allocated it with Ush 3,373 billion. In Rwanda, the trade deficit increased by 9.3% in 2018 because imports and exports increased by 8.1% and 7.2% respectively in 2018 as compared to the previous year. Economic plans enshrined in the 2019/20 budget, as...