The Kenya Railways Corporation (KRC) has entered into negotiations with exporters to scale up volume of cargo railed to Mombasa port via the Standard Gauge Railway (SGR) freight service, in what is expected to change the facility’s fortunes. The trains will transport tea, fruit juices and soda ash from the Nairobi Inland Container Depot (ICD) if new laws sail through, said Peter Masinde, manager in charge of the ICD. Since the launch of the freight services in January 2018, the SGR has been transporting only empty containers on its return journey to Mombasa at highly discounted rates of Sh25,000 and Sh30,000 for a 20- and 40-foot containers respectively. Mr Masinde said they are already running trials with Del Monte Kenya Limited on how to transport their products to Mombasa. The Thika-based company manufactures a range of fruit products for local and export market. “The goods will be transported from Thika using the Metre Gauge Railway (MGR) railway and we are looking at about 60 tonnes of cargo every week,” he said, adding that they are also pursuing a deal with Magadi Soda Company which is expected to commit a full train load of 108 containers daily. There have been concerns that the single track may not handle multiple trains, but Mr Masinde said with the seven stations between Mombasa and Nairobi, it can operate a total of 24 trains on both sides going by trials in November last year when they operated 15 trains. KRC is also targeting tea, which...

The agreement was signed last week on Friday at TradeMark Africa offices, Nairobi by KenTrade Chief Executive Officer, Amos Wangora and TMA, Kenya Country Director, Ahmed Farah in the presence of the Chairman of the Board of Directors of KenTrade Mr. Suleiman Shahbal. TMA with funding from United Kingdom’s Department for International Development (DFID) will support Single Window enhancement. Additionally, the funding will be used to automate Partner Government Agencies (PGAs) processes or enhance their existing Systems to increase utilization of the Kenya TradeNet System. These improvements are aimed at reducing trade related costs and time with a view to reduce the cost of doing business in Kenya. Speaking at the event, TMA Kenya Country Director Ahmed Farah said, “TradeMark Africa is committed to growing prosperity through trade in the Eastern Africa region; and 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.” On his part, KENTRADE CEO, Amos Wang’ora said, “So far, 11,400 users are registered in the National Single window; with 36 Government Agencies onboard. We have processed more than 1,707,642 permits since we went live.  Over time the System has simplified trade procedures and processes which has resulted to reduction of delays, improved convenience and substantial...

Economic growth in East Africa outperforms peers at close to 7 percent, the regional economic outlook reports of the African Development Bank (AfDB) show, putting growth in other region on a positive but cautious scale. The bank launched four of its five regional economic outlook reports this week in Abuja, Yaoundé, Nairobi and Pretoria, with forecasts for Central, West, East and Southern Africa. AfDB envisions that the East Africa, with an estimated growth of 5.9 percent in 2019 and 6.1 percent in 2020, will soon be an attractive destination for foreign investment in the continent. The region is expected to expand on the back of improved services sector performance in Tanzania and Kenya, higher agricultural output and bettered consumption. Ethiopia is tipped to lead the region with a predicted 8.2 percent growth in 2019, ahead of Rwanda (7.8%), Tanzania (6.6%), Kenya (6%), Djibouti (5.9%) and Uganda (5.3%). West Africa’s 15 economies seem to be diverse across many dimensions of development, with per capita income spanning between $452 in Niger to $3,678 in Cabo Verde. The regional economy notched up to 3.3 percent in 2018 from 2.7 percent in 2017, and predicted to hit 3.6 percent in 2019 and 2020. On why institutional mechanism in West Africa is weak, the outlook says, “Weak transparency and accountability and political instability and fragility have historically prevented West African countries from mobilising enough domestic resources to meet developmental needs.” The West Africa Regional Outlook charged governments within the region to devise creative means of expanding revenue through reforms...

The African Continental Free Trade Area (AFTA) has garnered the required 22 ratifications for it to come into force. The the latest ratification came in on April 1 from The Gambia just 11 days after the first anniversary of the signing of the Agreement on March 21, 2018 in Kigali. What was thought unthinkable has happened. It was the icon Nelson Mandela, who said “it always looks impossible until it is done”. He also said after climbing one great hill, you only realise you have more hills to climb. The real hard work now begins - that of Implementation - on which Africa doesn’t have a very proud record. Besides, there is quite a bit of unfinished work to be done. In addition to trade in goods, AFTA also covers services as well as innovation, competition and investment. Adding these areas was a stroke of genius, given the psychotic fear of these issues by many developing countries in international trade agreements particularly the World Trade Organisation. However, way back in 2006, the African ministers at a conference in Nairobi chaired by the then Kenyan Trade minister Mukhisa Kituyi, now secretary general of United Nations Conference on Trade and Development (UNCTAD), took a fundamental decision to include these issues among programmes for regional economic integration in Africa. Various service sectors are already fairly liberalised in much of Africa, such as tourism, financial, communication, computer, transport, certain professions, energy, cultural and entertainment services. This follows years of autonomous liberalisation under economic liberalism...

EAST African Community (EAC) partner states are set to generate 7,480megawatts of electricity come 2022. The increase from the 1,083 megawatts that was generated by the six member states last year, will be realised through a $2.5 billion funding by the African Development Bank(AfDB) which is approved through the Regional Integration Strategy for Easter Africa (RISP 2018-2022). “There has been an unprecedented level of resources mobilised that is geared towards the improvement of power generation among partner states,” EAC Secretary General Libérat Mfumukeko said here last week. According to Ambassador Mfumukeko, the funds will be channeled into enhancing regional transport connectivity, regional energy infrastructure, regional ICT connectivity and management of trans-boundary water resources. The EAC boss said the regional bank had also prioritised a number of energy projects under RISP, namely the Masaka (Uganda)- Mwanza (Tanzania) transmission line; Kigali-Bujumbura oil products pipeline feasibility study; Uganda-Tanzania-oil-pipelineproducts study. “The funds will also support projects aimed at accelerating implementation of the EAC single market, trade development, including tackling of non-tariff barriers, and putting in place policy frameworks for industrialisation and promotion of EAC as a single investment destination,” he explained. The EAC secretary general, who was speaking after meeting the AfDB Director General for Eastern Africa Region Mr Gabriel Negatu, thanked the bank for accepting to support agriculture and industry in the region as well as some Heads of State approved infrastructure and Health projects. In his rejoinder, Mr Negatu pledged more support to agriculture and industrialisation in the EAC bloc. Mr Negatu...

The World Bank has revised down Africa’s growth rate, citing the continent’s fragility due to political and regulatory uncertainties. Africa will grow at 2.8 per cent in 2019, according the global lender, down from the earlier projected three per cent. The World Bank also downgraded to 2.3 per cent the growth for 2018, down from 2.5 per cent in 2017, in their latest bi-annual analysis of the state of African economies released Monday. The continent’s economic growth is said to have been outpaced by population increase for the fourth consecutive year, pushing down 2019 growth projections below three per cent since 2015. World Bank Chief Economist for Africa Albert Zeufack said the continent’s future growth would now largely rely on its investment and improvement in the digital economy. “The digital transformation can increase growth by nearly two percentage points per year and reduce poverty by nearly one percentage point per year in sub-Saharan Africa alone. This is a game-changer for Africa. There is need for investment in the education system to embrace digital skills, improve regulations and encourage digital entrepreneurship to create jobs,” Mr Zeufack said. Kenya was ranked favourably on the path to digital framework, with the potential to boost consumer participation in the economy. Together with Ghana, Nigeria, Rwanda, South Africa, Tanzania, Uganda, and Zambia, the country was found to have homegrown digital, multi-side platforms (that is, matching providers and consumers of goods and/or services) in transportation, online shopping, asset sharing, and professional services There was, however, more...

IN response to the government's call to increase production and value addition to Tanzania's traditional cash crops. DL Group announced here that it was working hard in conjunction with the Tea Board of Tanzania to make Dar es Salaam a strategic international tea marketing and transit hub. "It is a huge ambition, but we are on course," the DL Group Chairman, Dr David Langat declared here in a special interview, further explaining: "The government of Tanzania has a clear position on honest investors and it is very positive on decent private sector initiatives. This kind of government's stand is very, very important in making Tanzania one of Africa's tea production and trading hub." In the budget speech covering the current fiscal year, tea was one of the eight key traditional cash crops listed by the agriculture ministry and which the ministry said was seeking serious production and processing attention under the Agricultural Sector Development Programme (ASDP II), Phase Two. Other crops are cotton, pyrethrum, cashew nut, sisal, sugar, coffee and tobacco. The ministry said tea production in 2018/2019 year was expected to reach 35,000 tonnes. Dr Langat said prospects for stepped up tea production and processing were bright because, tea was not a new crop to Tanzanian growers and already the country is a key exporter of tea in East and Central Africa and the international market. "What is needed now is to increase investment in efficient, lean and cost effective technology, improve product quality through capacity building. Good farm...

The gap between Kenya’s imports and exports widened in the first two months of the year to Sh192 billion from Sh175 billion in the same period last year, official records show. Latest Central Bank of Kenya (CBK) data indicates export earnings dropped from Sh110.7 billion to Sh104 billion blamed on poor earnings from tea. By comparison, import bills grew slightly by 3.4 percent to a record Sh296 billion, highlighting growing appetite for foreign goods. This comes as Pakistan ceded its first position as the biggest destination of Kenyan goods to Uganda and Netherlands, which took the first and second spots respectively in the two-month period. The unfavourable terms of trade leaves the shilling exposed as less dollars are earned even as more of hard currencies are required to pay for the imports. Exports to Uganda grew by Sh124 million to Sh10.71 billion. On the contrary imports from Uganda fell by Sh7.94 billion to a paltry Sh4.5 billion. This comes at a time when Kenyans have been claiming Uganda is giving Kenya a raw deal as the landlocked country has flooded the Kenyan market with its products such as eggs and clothes. Expenditure on machinery and transport equipment’s rose by 22 percent to Sh86.8 billion mainly due to SGR related imports. As the country rushed to finish phase 2A of the project. Expenditure on food imports dropped by 24 percent to Sh28.7 billion. Receipts from tea took a nose dive earning Kenya Sh21.46 billion down from Sh26.9 in the same period...

Things are looking up for Mombasa port as a modernisation project and the Standard Gauge Railway (SGR) bring in more cash. The port earned Sh45.35 billion in 2018, an increase of Sh4 billion over the previous year’s Sh41.56 billion, as it handled a slightly higher number of containers. According to the Kenya Ports Authority (KPA) financials for 2018, profit before tax for 2018 dropped marginally from Sh10.6 billion to Sh10.3 billion, largely as a result of an increase in expenditure. MODERNISATION With the five-year modernisation project, which entailed dredging the port channel and constructing Berth 19, the port has increased its capacity to handle bigger panmax (382 metres) vessels, and the upgrade of the cargo evacuation equipment saw it lower ship occupancy time from five to 1.55 days in 2017. This means KPA can now expect to see growth in cargo volumes, and especially once the second container terminal under construction is complete. This will increase the port's container capacity by 450,000 twenty-foot equivalent unit (TEU’s), further cementing the port as the region’s logistics hub. The ports grants from the government rose to Sh5 billion last year, up from 588 million the previous year, as the country intensified the port’s modernisation to bring it to par with its competitors, including Durban, Egypt and Lagos ports. CARGO The push to have importers use the SGR and pick their cargo from the Nairobi Inland Container Depot in Embakasi also breathed life into the previously lacklustre facility, pushing its handling capacity last year...

REPORTED 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 hardline 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...