This is as partners continue to squabble over fair tax treatment. The overhaul of the Common External Tariffs (CET) is expected to solve most of the EAC problematic trade disputes on rules of origin and value addition. This month, Kenya will be meeting Tanzanian officials to argue for preferential treatment of assembled Scania vehicles, British American Tobacco cigarettes, and confectioneries. Tanzania has denied duty-free access for Kenya’s confectionaries, cigarettes, and assembled products into its market over claims that the said products from Kenya do not meet the set criteria for preferential treatment. “Such Non-Tariff Barriers (NTBs) have a negative economic impact on the international trade in the goods in question and they often limit market access,” Kenya Association of Manufacturers (KAM) Chairman Sachen Gudka said. The Cabinet Secretary for East African Community and Regional Development Adan Mohamed said talks to sort out the CET are likely to delay past the June deadline. “There has been a lot of abuse across the region and all countries have allegations against each other. We are hoping the complete overhaul of the CET will be completed by the end of the year,” Mohamed said. The CET was set up to promote access to raw materials and semi-processed inputs that are not available in the region while protecting raw materials and semi-processed inputs available in the EAC region. It also sought to promote and protect locally available finished products within the EAC Region from cheaper alternatives outside the region. However, the biggest contention on the...

On March 2, 2016, the East African Community (EAC) Heads of State launched the new generation EAC e-passport and directed that its issuance takes effect from January 1, 2017. The Heads of State further directed that the partner states should implement a phase out programme for the East African and national passports from January 1, 2017 to December 31, 2018. However, owing to procurement rigours, issuance could not start as per the directive. Currently, all partner states save for the Republic of South Sudan, are issuing the new generation EAC e-passport. A regional passport is obviously not a new development in the EAC. In fact, the East African passport predates the current EAC. While the EAC was revived in 1999 upon the signing of the Treaty, the first EAC passport was launched in November 1998. This was by the Permanent Tripartite Commission for East African cooperation, a precursor to current EAC. Thus, since 1998, citizens from the EAC countries have been able to access a special travel document, which allows them to travel with ease within the regional bloc. Its use was however, limited because it was not recognised internationally, meaning that it was not accepted as a travel document beyond East Africa. Since December 18, 2018, the government of Uganda has been issuing the EAC e-passport and in effect started the phase-out programme of the Ugandan national passport. The two travel documents will, however, remain in use concurrently until December 2021, in line with the new timelines set by...

Kenya’s bid to get landlocked Ethiopia to deepen its commitments to the Lamu Port-South Sudan-Ethiopia Transport (Lapsset) corridor projects is under threat with the launch of a new road linking the Horn of Africa country to a port in Somaliland. Last Friday, President Uhuru Kenyatta led a Kenyan delegation to a Kenya-Ethiopia high level trade meeting in Addis Ababa while a day earlier Somaliland President Muse Abdi graced the groundbreaking of a 254-kilometre dual carriage road linking Ethiopia to port of Berbera During the trade talks, Uhuru wooed the Ethiopian private sector to partner with Kenya in the Lapsset project and implementation of Big Four agenda on food security, affordable housing, manufacturing and affordable healthcare. Trade hub “We also called for the fast-tracking of the ongoing transformation of Moyale town into a cross-border trade hub in the region in line with the 2012 Special Status Agreement,” the president said. But in hindsight, since the two projects seek to lure the same customer, analysts say Kenya must now move with speed and fast-track projects along the Lapsset corridor or lose out the port business to her smaller sister who is planning to finalise the road project in 22 months, giving landlocked Ethiopia another alternative to a port, after Djibouti, which currently handles roughly 95 per cent of all inbound trade for Ethiopia. Ethiopia, a nation of 105 million and an emerging economic power house in East Africa, has five neighbours with access to the sea – Sudan, Kenya, Djibouti, Somalia and...

The British high commissioner to Uganda Peter West has advised Uganda and Rwanda to resolve the current standoff between the two countries through dialogue. The tension between Uganda and Rwanda has been growing in the recent past and climaxed with the closure of the Gatuna and Chanika borders by the Rwandan authorities last week on Wednesday. At the time of the closure, the Rwanda Revenue Authority said the move was to pave way for the upgrading of the one stop border post at Gatuna. But while debate raged over the sudden decision, Rwanda cautioned its nationals against travelling to Uganda. Rwandan ministers accused Uganda of illegally detaining their nationals, enforcing the deportation of hundreds and denying others entry. Olivier Nduhungirehe Rwanda's state minister in charge of East African Community said that there are more than 40 Rwandan citizens languishing in cells controlled by the Chieftaincy of Military Intelligence (CMI). Similarly, Richard Sezibera, the Rwandan minister of Foreign Affairs and Cooperation also said that Rwandans are strongly advised not to travel to Uganda due to ongoing arrests, harassment and torture and incarceration without consular access. Uganda has however refuted the allegations saying the Rwandans under arrest are criminals just like others, arguing that no Rwandan has been targeted. Today, buses travelling from Kigali reported that they had been stopped from carrying Rwandan nationals from Kigali to Uganda. Those found with Rwandan nationals aboard were fined up to $5,000 (about Shs 18m). Rwanda also doubled the amount of tax levied on Ugandan...

As the border closure between Rwanda and Uganda entered day six on Monday, the Uganda Revenue Authority revealed that it was taken by surprise by Rwanda's action, and that pleas to Kigali to find a quick solution to the crisis went unheeded. A March 2 letter by the Commissioner for Customs at URA Dicksons Kateshumbwa to his Rwandan counterpart revealed the scale of the crisis. "Whereas the rationale and spirit behind the decision is appreciated, it would have been more appropriate to undertake the measure as a joint decision, considering the fact that the affected borders are OSBPs (one-stop border posts) where either side is interdependent on the other," said Kateshumbwa. "Besides, a decision of this nature would ideally give ample time to the stakeholders to enable adjustments to be done so as to comply and in the case of customs to rationalize manpower so that we facilitate trade smoothly. In this particular case, the implementation of the decision was done on the very day of notification." Mr Kateshumbwa said most of the stranded cargo had already been cleared under the Single Customs Territory. "We have a clogged Gatuna border post with 10 Rwanda registered trucks, 49 Uganda registered trucks, 37 Kenya registered trucks and nine Burundi registered trucks all carrying mixed goods," he said, adding that some of the trucks are carrying perishables while 17 of the Kenyan registered trucks are carrying petroleum products. "Therefore, considering the potential risk of these highly flammable products as well as the potential...

It’s almost two years now since Rwanda-Uganda relations started escalating to worrying levels. This culminated to Rwanda’s decision to “strongly advise its citizens not to travel to Uganda due to ongoing arrests, harassment, torture, illegal incarceration without consular access, deportation, etc., of Rwandan citizens” as tweeted by the country’s Foreign Minister, Dr Richard Sezibera. He added that: “This is for their [Rwandan nationals] own security. Ugandans in Rwanda or travelling through Rwanda are safe.” Why this decision and why has Rwanda taken this long to act? There was a time when Rwanda-Uganda relations could be described as being characterised by “tensions.” This was even prior to Uganda starting to arrest and torture Rwandans. Once these acts began, the situation could no longer be described as one of mere tensions. These were acts of outright aggression. Indeed, as long as the other side did not react in a similar vein, then the right description could be said to be that these were Ugandan provocations towards Rwanda. But why wasn’t Rwanda retaliating in similar coin and equal measure against Ugandans in Rwanda, and why has it circumvented this temptation, instead advising its citizens to avoid travel to Uganda? The answer is that, like all provocations, it represents a trap. The appropriate counter to such a trap is, moreover, to side-step it, denying the provocateur what they seek to further the aims for which they set the trap in the first place. It is only by grasping what this trap by the Ugandan...

The East African Community (EAC) has acquired a regional parliamentary institute (EAPI), a training facility expected to harness capacities and narrow the skills gap of parliamentarians and staff in quest to further strengthen the integration process. The institute was launched Friday by Martin Ngoga, the Speaker of the East African Legislative Assembly (EALA) in Nairobi where it will be located. Speaking at the official launch, Ngoga, underscored the importance of the institute’s presence in the region, stressing it would help drive the integration process and provide a valuable link between people within the region and beyond. He noted that the institute would provide an adequate base of knowledge on legislative matters to Members of Parliament and staff who at times come from different backgrounds when they join parliaments. “The launch of the EAPI is definitely an indication of the total commitment to the integration dispensation by (regional) parliaments and by yourselves. It is only befitting to recognise each and every one of you for the support you have personally and collectively accorded and extended to the EAPI,” Ngoga said. The launch of EAPI follows the enactment of the East African Parliamentary Institute Bill, 2011, which provides for the legal framework of its establishment. The EAPI Act, among other things, establishes a mechanism for capacity and skills development to promote professionalism through establishment of the institute. The speaker lauded the EAC Heads of State for assenting to the Bill, whose operationalisation now sets basis for motion of the objectives of the...

The Africa Continental Free Trade Area (AfCFTA) signed in March 2018 aims to establish a single market across the continent. This challenge is also an opportunity to extend the provision of regional public goods beyond hard infrastructure. Peace and security, mining, and energy are such examples covered in the Africa Economic Outlook 2019. Until now, evaluation of the progress of integration across Africa has centered on the eight African Union-recognized Regional Economic Communities—and seven other economic organizations—all primarily aimed at deepening intra-regional trade. But regional integration has always been about more than an exchange of market access and cooperation. At the very least, there is always a need for rail, road, and other means of communication. In its assessment of progress and prospects for the recently signed African Continental Free Trade Area (AfCFTA), the Africa Economic Outlook 2019 concentrates on the progress of cooperation to develop regional public goods. A tally of regional organizations dealing with regional public goods shows that five deal with energy, 15 with the management of rivers and lakes, three with peace and security, and one with the environment. The key distinctive feature of regional public goods is that, unlike national public goods, no single body with the authority of a state exists to ensure the supply of the good. Since all Regional Economic Communities have more than two members, some collective action is necessary to provide these regional public goods. Governance (implementing shared standards and policy regimes) is the intermediate public good necessary to generate the desired regional public goods:...

Kenyan tea traders are beneficiaries of the latest tensions between India and Pakistan. Tension between the two countries led to New Delhi's decision to cancel Pakistan’s Most Favoured Nation (MFN) status. This has made it difficult for Indian tea to cross borders, prompting Pakistan to buy even more Kenyan tea as an alternative. This is a boon for Kenyan exporters, even as the country’s Tea Directorate forecasts a fall in the volumes this year to 416 million kilogrammes from a high of 474 million kilogrammes in 2018. In international economic relations, MFN is treatment normally granted by a country to another to enable smooth trade between them. India withdrew this status for Pakistan a fortnight ago after a deadly bombing of its troops in the disputed Kashmir region. Related Content Storm in a teacup? Tea exporters seek to exit Mombasa auction Tea quality and demand affect pricing Pakistan, India say shot down each other's warplanes In East Africa, Rwanda and Burundi tea quality is best In a tweet, Indian Finance Minister Arun Jaitley announced the decision, which raised Customs duty by 200 per cent. “India has withdrawn the MFN status to Pakistan after the Pulwama incident. Upon withdrawal, basic Customs duty on all goods exported from Pakistan to India has been raised to 200 per cent with immediate effect,” he said. A suicide bomber killed more than 40 paramilitary police in Indian-administered Kashmir on February 14 in what was the deadliest attack on Indian forces in the region for decades....

Rwanda has been cited as one of the emerging economies to look out for in 2019, at the ongoing One on One Conference by EFG Hermes, a leading financial services corporation in Frontier Emerging Markets (FEM). The summit, which is underway in Dubai, United Arab Emirates, convenes executives from over 180 African companies representing 26 countries who are meeting more than 500 investors representing 260 institutions and family offices, managing an aggregate USD 11 trillion in assets under management. Rwandan firms present at the summit include BK Group PLC, Mota Engil and DP World. At the summit, the firms stand an opportunity to attract affordable capital. Ali Khalpey, Chief Executive Officer of EFG Hermes Frontier, said that opportunities are arising in countries such as Rwanda, which are expected to be among the top 10 markets for growth in 2019 thanks to innovative power generation and infrastructure projects. “Year on year, we are witnessing increased participation of African companies in our flagship conferences…Investors are seeking opportunities that are expected to arise in key African markets…At the same time, opportunities are arising in countries such as Ethiopia and Rwanda, which are expected to be among the top 10 markets for growth in 2019 thanks to innovative power generation and infrastructure projects. Kenya is making the reforms necessary to boost growth while Ethiopia has appointed a commission to explore opening up a stock exchange and all the needed regulatory frameworks and structures,” Khalpey said. Since entering Sub-Saharan markets, the summit has played a...