Plans by China to take over Kenya’s main port are giving some credence to concerns of the Belt and Road Initiative (BRI) being a form of neo-colonialism by the Asian nation that is a global economic powerhouse. Such plans also send a harsh warning to other countries as to the hard-line stance by China on countries that default on loan repayments. It has emerged Kenya risks losing the lucrative Mombasa port to China should the East African country fail to repay significant loans advanced by Chinese lenders. The loans were granted for the development of the corruption-riddled Standard Gauge Railway (SGR). Built at a cost of US$3,6 billion (R50.95 billion) and connecting the large Indian Ocean city of Mombasa with Nairobi, the country’s capital and largest city, SGR is the most expensive infrastructure project since Kenya’s independence in 1963. China Road and Bridge Corporation was the prime contractor. Late last year, a leaked report by the Auditor-General’s office indicated that the government of President Uhuru Kenyatta had in 2013 waived the Mombasa port’s sovereign immunity in order to use it as a security for the Chinese loan. Another audit indicated that Kenya Ports Authority (KPA’s) assets, including the Mombasa facility, could be taken over if the SGR did not generate enough cash to pay off the debts secured from the China Exim Bank. “The China Exim Bank would become a principle in KPA if Kenya Railways Corporation (KRC) defaults in its obligations and China Exim Bank exercises power over the...

On 1 April 2019, the Board of the African Development Bank approved an institutional support grant of $4.8 million to the African Union (AU) to accelerate the momentum of the African Continental Free Trade Area Agreement (AfCFTA), which received its 22nd ratification on 2 April, bringing the agreement into force. The AfCFTA is a major force for continental integration. It will expand intra-African trade by up to $35 billion per year and usher in freedom of movement for goods, services and people across the continent’s internal borders, with a regime of reduced tariffs and non-tariff barriers to cut the cost of doing business on the continent. It will also boost agriculture and industrial exports by up to $66 billion per year. The Bank’s grant is targeted at laying the institutional foundations for the AfCFTA implementation secretariat and the roll out of the implementation programmes. “The momentum is now in full swing”, said Andoh Mensah, Manager, Trade and Investment Climate Division at the African Development Bank, “It is now crucial to establish a robust, efficient, purpose-driven secretariat, capable of addressing improved stakeholder engagement, inclusiveness and ownership in the AfCFTA implementation”. The grant will also assist efforts towards full ratification of the agreement by all AU member states including the application of tariff reductions and related commitments, while generating stakeholder support for the AfCFTA to ensure inclusiveness and common ownership.  This is a decisive response to the call by African political leaders for the Bank and other partners to support the AU Commission and...

Addis Abeba, 10 April 2019: The Chairperson received the instruments of ratification of the African Continental Free Trade Agreement (AfCFTA) from the representatives of the Federal Republic of Ethiopia today in Addis Abeba. Flanked by HE Albert Muchanga, the Commissioner of Trade and Industry whose department is spearheading the flagship AfCFTA process, the Chairperson noted that the ratification by the host country of the African Union Commission was indicative of the commitment of the Ethiopian government and the leadership of Prime Minister Abiy Ahmed in advancing the African integration agenda The Chairperson further noted that since assuming office, Prime Minister Abiy Ahmed has taken concrete steps such as the issuance of visas on arrival for citizens from AU member states, as a demonstration of the country’s commitment towards the Free Movement of of People Protocol as an integral component of the AfCFTA. He further noted the key contribution and leadership that Ethiopia has shown in promoting the Single African Air Transport Market For his part, Mamo Mihretu Senior Advisor and Chief Trade Negotiator in the Prime Minister’s Office, said that his country’s ratification was a historical occasion, marking the first ever free trade agreement Ethiopia has ever signed. He further assured the Chairperson that Ethiopia intends to continue playing an active role in the roll-out of the AfCFTA. Ethiopia is the 19th country to have deposited instruments of ratification. Deposits of ratification are expected from Sierra Leone, Zimbabwe and The Gambia whose Parliaments have approved ratification of the AfCFTA Agreement....

Tea traders can now export the product to Mombasa auctions via the port of Dar es Salaam, thanks to an investor's investment in a state of the art warehouse in Tanzania's commercial capital. DL Group has set up a warehouse and termed it: Rift Valley Tea Solution Ltd Dar es salaam in the endeavour to boost Tanzania's tea production and exports, the firm's executive chairman, Dr David Langat, told journalists at the weekend. The Dar es Salaam warehouse, he said, has been certified as a member of the East African Tea Trade Association (EATTA) which runs the Mombasa Tea Auction. He said through the certification, Tanzania tea producers will no longer be required to deliver and warehouse tea in Mombasa so as to sell through the Mombasa auction but can send samples, catalogue and sale directly from Dar es Salaam and export the produce through Dar es Salaam port which will reduce the selling and distribution cost of the producers by more than 50 per cent. This means that tea from Burundi, Rwanda, Malawi and Tanzania is warehoused in Dar es Salaam for auctioning in Mombasa. "Lack of an EATTA certified warehouse of this nature gravely undermined efforts toward regional tea cultivation, processing and selling," Dr Langat told journalists here at the weekend. DL Group, he said, was working very closely with governments Tanzania, Malawi, Mozambique, Burundi, Rwanda and Zambia in the endeavour to raise tea production. This is first time EATTA has approved a warehouse outside Mombasa since 1948....

East African Community (EAC)  states have been urged to remove non-tariff barriers (NTBs) to boost trade and regional integration. East African Business Council (EABC) Chief Executive Officer Peter Mathuki said there is a need to trade proactively with neighbours before venturing outside the continent. Annual roundtable “Let’s spur business within ourselves as the EAC bloc,” he said at the annual roundtable for over 30 chief executive officers of companies based in Tanzania’s Arusha and Kilimanjaro region. Walter Maeda, Chairman of Tanzania Chamber of Commerce, Industry and Agriculture (TCCIA) welcomed closer collaboration between the organisation and EABC to support small medium enterprises to take advantage of  opportunities being made available by EAC regional integration. Speaking at the same function, Amani Temu of Taha Fresh said there is need to reduce the number of days it takes to request for waiver of duty from the Import Commissioner for EAC Originating Goods which currently takes seven days as it delays business. He said the long duration is not only a hindrance to intra-EAC trade but one of the obstacles to the smooth flow of business across the borders. Imported goods Among other issues, highlighted by Temu included a recent notice on no conditional release for imported goods by Tanzania Bureau of Standards, which subjects imported goods from the EAC partner states to inspections thereby causing delay. Players in Arusha steel industry called for review of East African Harmonised Standards on hot-rolled steel plates of less than 1mm as plates are an important raw material for their...

A parliamentary committee has protested at proposed legislation that allows the Government to push for the transfer of cargo operations, at the country’s second container terminal, from the Kenya Ports Authority to the Kenya National Shipping Line (KNSL).The changes to the Merchant Shipping Act will allow the Cabinet Secretary for Transport to circumvent a provision that bars a shipping line from running port operations.The proposed changes are contained in the Statute Law (Miscellaneous Amendment) Bill, 2019 tabled in the National Assembly last week.National Assembly Public Investment Committee chairman Abdulswamad Nassir has said that pushing the deal through will not augur well for operations at the port.He warned that the main container terminal may collapse due to competition, and asked the Government to review the proposal.“Should the deal happen, it will effectively kill operations at the main terminal. The second terminal operator is likely to lower tariffs for ships, thereby denying business to the main terminal,” said the MP.Italian company, Mediterranean Shipping Company (MSC) owns 20 per cent of KNSL, and the proposed takeover would effectively give it sway in the terminal’s operations.The Government has already signed a memorandum of understanding with the foreign shipping line, with KNSL expected to handle Sh500 million of cargo annually. The KNSL management is scheduled to appear before the PIC today morning. Source: Standard Digital

According to Kenya TradeNet CEO Amos Wang’ora 11,400 users are registered in the National Single window, 36 of them being government agencies. “The System has simplified trade procedures and processes, resulting to reduced delays, improved convenience, substantial cost savings, and improved collaboration,” he said during the signing of a KSh150 million partnership with TradeMark Africa (TMA). So far, more than 1,707,642 permits have been processed through the TradeNet System since it went live. The funding from the United Kingdom’s Department for International Development (DFID) will be used to support the enhancement and usage of the National Electronic Single Window System and implementation of the Maritime Single Window. Implementation of the Kenya TradeNet System commenced in 2012 and the system was rolled out in 2013. TMA Kenya Country Director Ahmed Farah said “TradeMark Africa is committed to growing prosperity through trade in the Eastern Africa region; we recognize the impact of the single window on the trade value chain. That is why we are committing to support the enhancement of this system in order to increase its capacity as an effective trade facilitation tool. It complements with our other investments at the port of Mombasa, with Kenya Revenue Authority, and at various one-stop border posts.” Source: Khusoko

COMESA private sector development officer Innocent Makwiramiti says this will also result to an increase in intra-trade among member states and reduce cheap imports from international markets in the region. Intra Common Market for Eastern and Southern Africa (Comesa) trade exports currently stands at an estimated 29 trillion shillings with Kenya and Egypt among the leading exporters within the bloc. However the COMESA officials says only the COMESA intra trade only accounts for 10 percent of the bloc’s total trade  due to standard restrictions and there is need for more  harmonization and standardization of food and animals products the most common traded goods in the region to boost trade among members states. The member states have also been urged to ratify all COMESA food and animal standards to ease the movement of goods across borders. This according to COMESA will help reduce cheap imports into the bloc’s markets. Local farmers were urged to take advantage of  a COMESA approved  phytosaniatry facility at Muguga to acquire export licenses. Source: KCB

The deadline set by the Tripartite Council of Ministers for member States of three regional economic blocs to sign and ratify the tripartite free trade area lapses this month. So far only four countries in COMESA, East Africa Community and Southern Africa Development Community tripartite bloc have signed and ratified the agreement. These are Kenya, Egypt, South Africa and Uganda. A total of 22 out of 26 countries in the tripartite bloc comprising COMESA East Africa Community and Southern Africa Development Community have signed the agreement. Delegates attending the seventh Extraordinary meeting of the COMESA Intergovernmental Committee that opened in Lusaka today, were informed that eight of the 19 countries that had ratified the Africa Free Trade Area Agreement (AfCFTA) were Tripartite Member/Partner States. The AfCFTA attained the requisite ratifications on Monday this week when The Gambia signed, bringing the number the number of ratification to 22 which is the threshold for the agreement to enter into force. Zambia’s Minister of Commerce, Trade and Industry Hon. Christopher Yaluma who opened the meeting said it was time for the remaining countries to sign the tripartite given that is was supposed to the building bloc to the continental FTA. “I cannot overemphasize the absolute importance of all of us ratifying the Tripartite Agreement so that it enters into force immediately, “he said. “After years of negotiation, the Tripartite FTA is ready for implementation. It is very much a low hanging fruit.” Currently, 93% of the work on Rules of Origin has been...

Licenses of traders attempting to export substandard horticultural products will be revoked in order to protect Uganda’s export interests. The measure was unveiled this morning by the Ministry of Agriculture, Animal Industry and Fisheries following a stern warning from the European Union about declining standards of Uganda’s exports, especially roses, fruits and vegetables. Agriculture minister Vincent Bamulangaki Ssempijja says Uganda’s exports are increasingly being blocked from entering the export market due to failure to meet standards. Ssempijja said the rejection of Uganda’s export products has been caused by the presence of harmful organisms and excess pesticide residues. The most affected commodities include peppers (capsicum), Annona (Kitafeli) and roses. Ssempijja told journalists at the Media Centre in Kampala on Tuesday that the government will be watching exporters, traders and farmers closely to ensure quality products at all levels. He says that Ugandan traders will now be required to introduce their chain of farmers to ministry officials, to be assisted in improving standards. Ssempijja said that the ministry will stop the clearance of export consignments of any exporter with more than one interception by the European Union. Ssempijja said he has already appointed a National Task Force comprising both private sector and technical staff to specifically guide compliance on exports and the development of strategies to ensure Ugandan products maintain the current markets, but also penetrate new niche markets. “The ministry is planning to procure equipment for analyzing pesticide residues to support export certification for compliance of pesticide residues,” he said. Ssempijja...