The government has committed to strengthen the Addis Ababa Action Agenda (AAAA) and seal the loopholes against control illicit financial flows (IFFs) in the country. The AAAA sets out a strategy to mobilise and ensure effective use of domestic revenue, combat tax evasion and IFFs. It requires progressive tax policy reforms and more efficient tax collection in a transparent manner. IFFs can result from proceeds in corrupt dealings, money laundering and from commercial tax abuse including evasion and trade mis-pricing. The net effect is transferring the monies outside the country to where they are outside the scope of local financial regulators. Funds flow offshore, including through deposits or securities, real estate, businesses, and other assets. In 2017, Global Financial Integrity estimated that the country lost over Sh1.06 trillion ($10.6 billion) in accumulated IFFs since 1970, being the worst case in Africa. Between 2002 and 2011, Kenya is believed to have lost about Sh151 billion ($1.51 billion) to trade mis-invoicing, with the tax losses estimated to be as high as 8.3 per cent of government revenue. Trade PS Chris Kiptoo said there are loopholes existing in laws meant to ward off fraudulent individuals and corporations, hurting revenue collection targets. “If we achieve this, the funds will be redirected in spending targets for essential services set out in government pillars to ensure social justice,” PS Kiptoo said yesterday. A report on Tax justice and Poverty by Jesuit Hakimani Center has named banks, ICT, unregulated money transfer services, legal loopholes and developments like...

Logistics experts have warned that should cargo continue being transferred to the Nairobi Inland Container Depot (ICD) at the current rate, it will cause serious congestion problems at the capital city. Already, routes within the ICD are experiencing heavy traffic, with the Kenya Ports Authority (KPA) leasing remarshaling yards where goods that have stayed at the facility for more than 21 days — when they start attracting customs warehouse rent — are being transferred. The Standard Gauge Railway (SGR) freight trains are railing 800 Twenty Foot Equivalent Units (TEUS) to the ICD daily, which in a year translates to 288,000 TEUs. With the export cargo estimated at 55,000 TEUs plus empty containers, this means the ICD will be operating at over 80 per cent of its installed annual capacity of 450,000 TEUS, presenting a logistics nightmare. Under normal circumstances, ports are required to operate at 70 per cent of their installed capacity to give room for acceptable levels of congestion in case of a crisis. According to a study carried out by Maritime Business and Economic Consultants (MBEC) in May 2017 to determine whether Mombasa port would need services of Container Freight Stations (CFS) in the wake of an operational SGR, a port should utilise 70 percent of its capacity at any time. Anything beyond that is considered congestion, which results to inefficiency. “For a container yard, it is commonly understood that a port operating at a slot utilisation levels below 70 percent of its theoretical capacity will normally operate...

“We must buy more; produce more for our economy to grow. My office assisted by Ministry of Trade will coordinate ministries, departments, agencies and local governments... Effective implementation of the Buy Uganda Build Uganda (BUBU) policy through supporting local industries, enhancing quality and quality of goods produced will reduce Uganda’s trade deficit with other countries globally, Prime Minister Ruhakana Rugunda has said. “Uganda’s population which is now estimated to be at 40 million will require these goods and services; and this is already a market available. If they consume locally produced goods, they support local producers, they create jobs and support growth of industries,” said Rugunda. He said this during a dinner to mark the closure of BUBU expo at Kololo Airstrip on Saturday evening. Uganda last year exported goods worth $3.6b and imports stood  at $6.2b implying a deficit of $3.4b. Rugunda hailed Amelia Kyambadde and her ministry for the BUBU initiative, pledging to support it. “We must buy more; produce more for our economy to grow. My office assisted by Ministry of Trade will coordinate ministries, departments, agencies and local governments for the success of BUBU,” he stated. Amelia Kyambadde, Minister for Trade, Industry and Cooperatives said the main purpose of BUBU is to promote local companies and help them benefit from government procurement systems as well as enhancing quality of goods. She said however said there’s need for Government to invest in raw material value addition such as hides and skins for leather, minerals among others to...

The East African Community (EAC) has adopted a wait-and-see policy to the ensuing border dispute between Uganda and Rwanda as the arms investigative unit hits the ground running on a fact finding mission. The ongoing trade dispute has cast a shadow on the EAC cross-border trade relations as the Uganda’s largest border crossing with Rwanda — the Gatuna post — remain closed to traffic. “We have our directorates’ of customs and trade in both Rwanda and Uganda. We expect to file a report on the dispute in the next few days before engaging with the partner states,” EAC Secretary General Dr. Liberat Mfumukeko said. Mfumukeko, who spoke on Tuesday during a private sector roundtable on elevating the role of the sector in the EAC,  further warned of the disputes impact on cross-border business activities as is the case with the majority of non-tariff barriers (NTBs). According to the East African Business Council (EABC), the ongoing conflict has an effect resonating to beyond just the scope of the duos border points. “Any time there is a challenge with one border, it affects all the other borders. Our respective members have asked us to make our voices heard but we can only do this carefully. We need to understand what is exactly happening and the political issues involved,” EABC Chairman Nick Nesbitt told Citizen Digital. Uncertainties into the dynamics involved in the near-month long wrangle have left experts perplexed on the probable outcomes from a prolonged trade spat between the pair. Chief Executive...

The Republic of Ireland has hailed the commitment of the six East African Community (EAC) Partner States to the EAC integration process. Ireland’s Ambassador to Tanzania and the EAC, H.E. Paul Sherlock, further disclosed that his country would continue to promote trade and development cooperation between his country and the EAC. Amb. Sherlock said that Ireland’s experience within the European Union was that every regional integration process has its challenges which can be surmounted through negotiations by the member countries. Amb. Sherlock said that Ireland would continue to provide support to EAC integration initiatives through TradeMark Africa, a not-for-profit company established in 2010 to support the growth of regional and international trade in East Africa. The Irish envoy was speaking when he paid a courtesy call at the EAC Headquarters where he held discussions with senior officers from the EAC Directorates of Customs and Trade. At hand to receive the Ambassador was Alhaj Rashid Kibowa, the Director of Trade at the EAC Secretariat. In his remarks, Alhaj Kibowa informed the Amb. Sherlock that the Community was increasingly encouraging bilateral mechanisms among Partner States to resolve Non-Tariff Barriers (NTBs) to trade. Alhaj Kibowa said that all EAC Partner States assented to the EAC Elimination of NTBs Act 2017, adding that NTBs were continuously being addressed by stakeholders at all levels of the Community. Alhaj Kibowa further said that the Community had embarked on ambitious infrastructure development in the roads, railways, ports and energy sectors to spur economic growth and trade in...

A new initiative is set to be rolled out as part of efforts to comprehensively deal with pollution along the Northern Corridor, a key regional transport artery. The details of the project are contained in concept paper released in January titled ‘Reduction of greenhouse gas (GHG) and pollution in the freight transport sector along the Northern Corridor’. The document was done by the Northern Corridor Transit and Transport Co-ordination Authority (NCTTCA) and supported by Trade Mark East Africa (TMA). The NCTTCA members are Kenya, Uganda, Burundi, Rwanda, Southern Sudan and the Democratic Republic of Congo (DRC). Head of Transport policy and planning at NCTTCA Aloys Rusagara said the initiative is part of other projects the organisation rolled out several years ago to mitigate pollution in the maritime sector in line with the International Maritime Organization (IMO) rules on greenhouse gas emissions. “The policy organs directed the NCTTCA to implement the green road freight program between its member states in 2016 and by 2017, we had already done a baseline survey for emissions at the Port of Mombasa,” Mr Rusagara told Shipping at the organisation’s offices in Mombasa. The NCTTCA was charged with assessing the level of pollution from the port to the final destination of the goods “We have already drafted a work plan towards achieving that programme aimed at meeting the directive in order to reduce greenhouse gas emissions and entire pollution within the transport sector, from the Port of Mombasa to the final destination of the consignments,” he...

A diplomatic row between Uganda and Rwanda is posing a threat to regional integration, East African Community (EAC) secretariat has warned, even as it called for a truce. It told journalists in Nairobi yesterday that it has dispatched teams to both Uganda and Rwanda on a “fact finding mission” as it seeks to help resolve the continuing standoff. The regional body said the row is an impediment to the ongoing discussions to harmonise EAC Common External Tariff (CET), an annex of the EAC Customs Union Protocol, which guides duty charged on products imported into the community. Existing tariff EAC Secretary General Liberat Mfumukeko said this is adding to the existing tariff and non-tariff barriers (NTBs) which have continued to derail intra-regional trade. “Every single time when goods cannot move, businesses suffer. When business people cannot take their goods to another country whether it is from Uganda to Rwanda, or Rwanda to Uganda, or from Tanzania to Kenya, every single time we face these situations they are detrimental to businesses, he said. “We have our experts in Rwanda, we have our experts in Uganda for a fact finding mission. We are going to have a report very soon and from the report as EAC, we will be able to engage the partner States,” Mfumukeko added. A meeting to discuss CET is scheduled for Arusha later this week but industry captains and EAC secretariat are concerned over diplomatic and trade standoffs in the region, saying apart from the two countries Kenya, Tanzania...

French President Emmanuel Macron visited Djibouti and Ethiopia on Tuesday, promising “respectful” partnerships in the face of growing regional indebtedness to China, which is fast expanding its presence in Africa. Looking to strengthen economic, military and cultural ties in East Africa, Macron announced a defence deal with Ethiopia and is expected to seal a major transport contract in Kenya on Wednesday. Macron described Djibouti, the last colony to gain independence from France – in 1977 – as a “historical partner and strategic ally”. Both Paris and Beijing, as well as Japan and the United States, have military bases in Djibouti because of its location along a shipping lane that leads to the Suez Canal. Its geographic importance in the Horn of Africa was the foundation of Djibouti’s hopes of becoming a major trading centre. Two years ago, East Africa’s smallest country inaugurated its newest and biggest port – part of an infrastructure expansion, partly funded by China, that included three more ports and a railway to Addis Ababa, the capital of landlocked Ethiopia. The government of Djibouti President Ismail Omar Guelleh hoped to turn the country into a “new Dubai” competing for business with overburdened African ports such as Mombasa in Kenya. Sandwiched between Ethiopia, Somalia and Eritrea, Djibouti – population 980,000 according to the United Nations – is a crucial part of Beijing’s “Belt and Road Initiative” along what has been nicknamed the “Maritime Silk Road”. It allows China to reach Africa and Europe across the Indian Ocean. The...

He said technology is a prime enabler of sustainable competitiveness, with the power to elevate African countries to middle-income level. Ruto noted that countries can embrace modern technology by investing in education and training, beginning by aligning the needs of the private sector “vis-a-vis what our youth are taught”. “A suitably reoriented technology should impart leadership, digital and soft skills in every young person going through the education system,” he said. The Deputy President spoke on Tuesday in Munyonyo, Uganda, during the Africa Now Summit 2019. Leaders attending the two-day conference, whose theme is “Towards a secure, integrated and growing Africa” are Uganda President Yoweri Museveni (Uganda), Somalia President Mohamed Abdullahi Mohamed and Uganda Prime Minister Ruhakana Rugunda. Others are Tanzania Vice President Samia Suluhu, Secretary-General of the United Nations Conference on Trade and Development Mukhisa Kituyi and Chairman of Heirs Holdings and United Bank for Africa Tony Elumelu. Having appreciated the power of technology in furthering growth, Ruto said Kenya was scaling up training and support for innovation by financing and facilitating market access for young people to create, collaborate, test and improve concepts. “This is how vibrant tech hubs arise, survive and drive structural change,” he noted. At the same time, Ruto urged African leaders to refine their education to focus on science, technology and innovation. He said the move would help align training with market needs and to the demands of the Fourth Industrial Revolution. He told the conference that Kenya was already implementing the “most ambitious...

Tanzania relations with the international community could be more strained in 2019, due to its “poor commitment to democracy, lack of openness to foreign investment, and adoption of protectionist policies,” says a report by UK-based think tank Economist Intelligence Unit (EIU). According to the think tank, Tanzania will become a difficult place for the private sector. EIU says that the government’s inward-looking policies, anti-gay stance and a controversial legislation that bans pregnant girls from attending school, have upset international trading partners. The report released mid-February, came as President John Magufuli moved to mend fences with bilateral partners after a tumultuous 2018. Last week, the president moved former university law lecturer Prof Palamagamba Kabudi from the Legal Affairs Ministry to Foreign Affairs, swapping places with career diplomat Augustine Mahiga. Prof Kabudi’s primary task is seen as countering the growing discomfort among donors and bilateral lenders with the Magufuli administration. Prof Kabudi’s new docket places him in charge of East African Community (EAC) matters, and the EIU predicts Tanzania’s economic relations with fellow EAC member states will remain broadly cordial, despite occasional trade disputes with some of them. The EIU says abrupt tax increases, erratic regulatory changes and lack of transparency may undermine the government’s own Development Vision 2025 plan which prioritises industrialisation and job creation under a private-sector-led development strategy. According to the report, the mining industry will be a particular victim of this agenda, with a ban on unprocessed mineral exports and a strict regulatory framework eroding the sector’s attractiveness....