Manufacturers have blamed the introduction of 20 per cent levy on demurrage for the delays at the Port of Mombasa and the Nairobi Inland Container terminal. The Kenya Association of Manufacturers (KAM) said the tax was ill-advised as government agencies deliberately delay clearance processes to facilitate accumulation of demurrage costs paid to incoming ships, hence raising tax collection. Demurrage is a monetary penalty charged on an importer after exceeding the given time for collection of goods or returning equipment used in the transportation of goods. “The government agencies have mooted long procedures to clear cargo at the Mombasa port that make consignments await clearance for up to four weeks. This means cargo inspected at country of origin will be re-inspected with owners paying the cost,” said a speaker at a meeting convened by KAM last week. The forum heard that quality re-inspection and physical examination of cargo by the Kenya Bureau of Standards (Kebs) attracts a Sh5,000 fee while Kenya Plant Health Inspectorate Service (Kephis) charges Sh27,000. The Finance Bill 2018 introduced withholding tax on demurrage paid to non-resident shipping lines at the rate of 20 per cent on the gross demurrage amount settled by local companies. The levy was meant to encourage faster evacuation of cargo. However, the move seems to have had unintended consequences, with long delays in clearance of cargo being now a common occurrence. In an interview, the Association of Kenya Feed Manufacturer(Akefema) Publicity and Marketing Committee Chairman John Gathogo said the import re-inspection of raw...

Lack of awareness and trade barriers have restricted Kenyans to just 0.3 per cent of trade lines under the African Growth and Opportunity Act (Agoa), officials have said as the country seeks to grow its export. Export Promotion Council chief executive officer Peter Biwott said Kenya is only able to export about 20 product lines against the total of 6,400 provided for under the initiative, 18 years since the trade window was opened. “The biggest challenge is information. People need to know what the duty-free markets are, and what they can do to access the US market,” Mr Biwott told a meeting with exporters at a Nairobi hotel yesterday. Agoa, first enacted in 2000 to grant the country and 40 other African states quota and duty-free access to the US market, is set to expire in 2025 following the 2015 extension.

Traders in landlocked states in East Africa are pushing for a single customs bond guarantee scheme for the whole region amid concerns that high cost of complying with Kenyan and Tanzanian laws have raised their cost of production. While the region operates as a single customs territory, Tanzania does not recognise the Common Market for Eastern and Southern Africa (Comesa) Customs Bond Guarantee Scheme which shippers execute at the Mombasa port to move goods through Kenya, Uganda, Burundi, Rwanda and South Sudan. Tanzania is the only East Africa Community (EAC) state that does not belong to the Comesa trading bloc, having opted to integrate its market with Southern Africa Development Community countries. That means a trader who orders goods through Dar es Salam will have to execute a Tanzanian security bond then revert to either national or Comesa one after crossing the border. “Manufacturing in a landlocked country that imports nearly everything through Kenya or Tanzania is a real challenge,” said Mr Salim Somji, chairman of Burundi-based Siphar S.A, a pharmaceutical manufacturer. “When everyone is thinking of competing in the expanded EAC market, we can only think of competing in other landlocked states of the region.” Regional customs bond guarantees ensure that the government is able to recover duties and taxes from the guarantors should the goods in transit be illegally disposed of for home consumption in the country of transit. While Comesa bond is more expensive, with its value being at 0.5 per cent of goods on transit, traders...

THE Secretary General of the East African Community (EAC), Libérat Mfumukeko, has stressed on the need for EAC member states to work closely in order to improve road safety and transport infrastructure in the bloc. In his condolence message to Kenyan President Uhuru Kenyatta following the aftermath of the Kericho bus tragedy that occurred last Wednesday, the Burundian diplomat described the accident as a yet another call to all EAC partner states to continue to work together in curbing the scourge of road accidents. “We have lost too many lives in the recent past; this, therefore calls for an urgent need for member states to continue to work together improving transport infrastructure,” he observed. In the same vein, the secretary general commiserated with the families that lost their loved ones in last Wednesday’s tragic road accident at Fort Ternan in Kericho, which 56 people perished. “On behalf of the EAC and on my own behalf, I convey my heartfelt condolences to your Excellency, and through you to: the bereaved families, relatives and friends of the passengers, the government and the people of Kenya,” condoled the EAC secretary general. According to estimates by TradeMark Africa (TMA), road fatalities are said to reduce the economic output of EAC countries by about $115.6 million per year assuming average productivity per person lost to a road traffic fatality. The people lost would more than likely have long lives resulting in an estimated $5 billion worth of lifetime productivity from each year’s cohort of road...

Windhoek – Ports in Southern Africa are not upfront with their terminal handling charges, which makes the ease of doing business in the region difficult and the hidden cost thereof ridiculously expensive, says Ed Richardson, Freight and Trade Weekly correspondent. Richardson said while a growing number of ports in the Southern African Development Community (SADC) region is open to negotiation on charges, some simply do not respond to requests for information and information seekers have to rely on the World Bank for available data. This, he said, is due to the heavy competition experienced by the different transport corridors where there is no harmonisation of tariffs or political will to unify trading across borders. He stressed that ports that have invested in certain routes for over 100 years and have depots there would never advise a customer to go through another port. There are huge variations in terminal handling costs in the six ports in SADC countries, namely Namibia (Walvis Bay), Mozambique (Maputo, Nacala and Beira), South Africa (Durban) and Tanzania (Dar es Salaam). According to figures provided, the Walvis Bay port is unusually expensive, with double or three times higher tariffs, followed by Maputo and Durban, while the Dar es Salaam, Maputo, Nacala and Beira’s costs, which are the lowest, are on average similar. For example, for handling 20 feet cargo in transit, the Walvis Bay port charges US$216.88, while Maputo and Durban would handle the same cargo for US$148 and US$123, respectively. This is in stark contrast to...

JUBA, Oct. 15 (Xinhua) -- South Sudan on Monday opened its second edition of the Made-in-South Sudan Exhibition aimed at promoting locally-made products and open up the country's investment opportunities. Paul Mayom Akech, Minister of Trade, Industry and East African Community Affairs said this year's event focuses on exposing the country's agriculture and manufacturing potentials in a bid to reduce dependence on imports. Akech said the government seeks to boost South Sudan's manufacturing sector through enacting laws to safeguard investors and the local consumers. "Our immediate task is to enhance policies that will safeguard the producer and the consumer. Engage with financial institutions to provide resources to this local business groups, find them market outside South Sudan and make conditions of export easier for them," Aketch said. The event which brought together over 50 exhibitors is supported by the United Nations Development Program (UNDP) and it will run until Oct. 20. Participants are drawn from sectors such as agriculture, construction, cosmetics, beverages, electronics, textiles, banking and insurance among others. South Sudan depends on oil revenue for over 90 percent of its budget, but production reduced significantly due to civil war that erupted in December 2013, causing most oilfields in the country's oil-rich northern region to shut down. The east African nation is currently struggling with hyper inflation amid shortage of foreign reserves to support its import-dependent economy. Source Xinhuanet

NAIROBI,KENYA, OCTOBER 16 — A group of Canadian companies has pitched tent in Nairobi as they seek to seal business deals and investments in the East Africa economic powerhouse. This comes as Canada remains keen in expanding and deepening its trade and investment relationship with Kenya. The firms are eyeing investments in renewable energy, Oil and gas sector including geophysical surveys,Water, ICT ,Lifesciences and  airport construction companies among others. Kenyan businesses, led by the Kenya Private Sector Alliance (KEPSA), are also keen to forge partnerships that will ensure mutual benefit for both countries. “It is our hope that this upcoming business delegation to Kenya will act as one of the stepping stones towards deepening this relationship,” Kepsa said in a communiqué. KEPSA and the High Commission of Canada lead the two countries’ business delegations to a networking event in Nairobi on Monday, creating an opportunity for the teams to share business ideas and investment opportunities.The event was held at the Trademark Hotel, Village Market. “Canada is interested in expanding and deepening its trade and investment relationship with Kenya,” the High Commission of Canada’s office in Nairobi affirmed. The visit to Kenya is part of a mission dubbed “2018 Team Canada Mission to Africa” which is targeting investment and business opportunities in the continent. The mission brings together companies and educational institutions from Canada, Africa based institutions and Kenyan companies. They include Alberta, ATCO Frontec Limited, C4i Training and Technology, GEOSEIS Inc., Ingeni Inc, Intercontinental Consultants Inc. and Kamit Group, a leading...

The advent of Standard Gauge Railway (SGR) and the current war on contraband goods have placed the Kenya Ports Authority (KPA) on the radar. With the government focus on improved infrastructure as an enabler to economic development, the port management will continue to be under pressure and its performance one of public interest. And the pressure has clouded the other things happening at the port. The management of KPA should provide information to the public about what they are doing to ensure the port remains viable. With the passing of the Access to Information Act 2016, one hoped that proactive disclosure of information as an accountability measure would be readily embraced. This would also enhance public participation and understanding of key government projects to generate support for government agenda. Globally, port business has increased and plays a major role in economies. And with modern trends where many shipping lines are banded together to enjoy economies of scale, what are we doing to position our port to play the all critical role in the transit business? And what is the management doing to ensure the port maintains a competitive advantage over the other ports in the region? Remarkable progress has been made with the SGR.  There is increased revenue collection. Phase one of the SGR became operational with the passenger services in June last year and freight services between Mombasa and Nairobi in operation.  Starting with one train ferrying 108 containers daily from the port to the Inland Container Depot in Nairobi,...

After 20 years of bitter conflict, the border between Eritrea and Ethiopia is officially open for business and merchants are trading freely across the former war zone. Where soldiers stared each other down as recently as six months ago, a relaxed army presence now watches horse-drawn carts and buses full of visitors, as trade and tourism crosses the border of Africa’s longest-running conflict. Business booms between former rivals Merchants in the disputed territories once fought over between Eritrea and Ethiopia are now enjoying the benefits of open trade and a huge spike in the movement of people. For two decades, little more than soldiers, refugees and rebel fighters moved across the closed border between the two countries. However, now goods and people are free to cross the border, filling merchant shelves with goods that were previously out of reach. More importantly, the peace deal between Eritrea and Ethiopia has transformed a barren war zone into a border bustling with activity and potential customers for merchants to sell their product to. There are some early concerns developing from the open border, though. The business boom is accompanied by a surge in the number of Eritrean refugees crossing the border into Ethiopia in a bid to escape the repressive regime of Isaias Afwerki. There are also problems for Ethipiopian traders dealing with their new Eritrean partners, who have to deal with the unstable value of the Eritrean nakfa and unregulated exchange rates. While both governments have said they hope renewed trade will boost their economies,...

Favourable weather has boosted East Africa’s tea production in the six months to June this year, even as prices have dropped in the wake of oversupply and enforcement of aflatoxin testing rules last year, which have halved exports to Pakistan, the region’s largest export destination. The onset of rains drives production in the region, which is mainly supplied by Kenya. The recent increases in rainfall boosted this year’s crop 17 per cent compared with the 2017 output. However, this excess production has been blamed for a 13 per cent drop in prices at the Mombasa auction over the past month. Rwandan and Burundi teas fetch higher prices due to their superior quality, compared with Kenya’s, Uganda’s and Tanzania’s. The quality of tea at the Mombasa auction is determined by different parameters, including the buyer’s perceptions, size of the granules, pricing, leaf appearance, infusion and tasting (and smell, which is done by tea tasters who are experts). “Quality is gauged differently worldwide,” said the East African Tea Traders Association (Eatta) managing director Edward Mudibo. Related Content Too much rain lowers quality of Rwandan tea Storm in a teacup? Tea exporters seek to exit Mombasa auction Tanzania targets five regions to boost tea yields and sales Tea quality and demand affect pricing “What is regarded as grade 1 — or the best quality — for the UK market may not be the best for Sudan and Somalia. What is perceived to be the lowest quality for Sudan and Somalia certainly may not...