Dar es Salaam. The government revealed on Saturday that Kenya has stopped importation of rice from Tanzania in yet another sign of unending trade wars between the two largest economies in East Africa. The permanent secretary in the ministry of Foreign Affairs and International Cooperation, Prof Adolph Mkenda, told The Citizen that the Kenyan government stopped the importation of rice from Tanzania over claims of standards and packaging. “We are seeking an explanation [on the ban],” said Prof Mkenda. “We are sure that these are negotiable issues and it is our best belief that they are resolvable.” Apart from rice, there are also other issues that the government of Tanzania is trying to sort out with its Kenyan counterpart. One is that which involves the 15 lorries carrying wheat flour, which are stranded at the Namanga border post. The trucks were stopped to pass through the border following the decision by Kenyan authorities to ask the owner to clear each lorry afresh. This is despite the fact that the owner had already cleared 85 lorries, including those stuck at the border, which were bound various cities of Kenya. The other issue, according to Prof Mkenda, is that involving Bakhresa’s energy drinks product, which the Kenyan authorities overvalue them in contrast to the exact value indicated by the producer. This has made the product to be unfairly taxed by the Kenyan taxman and cause unnecessary inconvenience to the producer. The PS also revealed that the government of Tanzania was aware of...

The question of whether the Nairobi-Naivasha-Kisumu Standard Gauge Railway (SGR) section is viable or not came to the fore when the China Exim Bank cut its funding for the Naivasha route by Sh32 billion. Supplementary budget documents tabled in Parliament in April also showed allocations to the SGR project dropped by Sh42 billion, including the Sh32 billion held back by the bank. The 120-kilometre Nairobi-Naivasha line that cuts through the Nairobi National Park, traversing several town centres and agricultural areas, will cost Sh150 billion. The concerns on the fate of the line were heightened when President Uhuru Kenyatta failed to secure funds as had been highly expected during his China visit two weeks ago. Kenya and the China Communications Construction Company had already reached a deal for construction of the Naivasha-Kisumu stretch. The remaining bits of the agreement were to be finalised during the President’s Beijing visit. However, this did not happen, raising eyebrows of what is in store for the multibillion project. Transport Cabinet Secretary James Macharia had also said the signing of the funding would be done in Beijing during the China-Africa Forum (Focac). “All documents are ready. However, when we engaged the Chinese government, it was agreed that they do support it, but we need to complete the feasibility study, not just for Naivasha to Kisumu but also all the way from Mombasa to Kisumu so that we can establish its commercial viability,” CS Macharia told a press briefing in Beijing. Analysts are now questioning why the...

Rwanda's trade deficit with its EAC peers widened by $16 million (Rwf14 billion) in the first half of 2018, as the country opted for food and cement imports from the bloc to plug domestic production gaps. According to new trade data from the National Bank of Rwanda, the trade deficit increased to $152.83 million (Rwf132.2 billion) from Rwf118.3 billion ($136.81 million) in the six-month period ending June 2018, attributed to increased imports of cement, maize, sorghum and rice from the region. "The worsening trade balance is on account of increased imports -- by 12 per cent from $221.67 million to $248.26 million -- outweighing exports," the central bank said. Rwanda imported more cement after the largest manufacturer, Cimerwa, shut down its plant for maintenance and upgrade in March and April. A second plant, Kigali Cement, owned by troubled Nairobi Securities Exchange-listed ARM Cement, also suspended production during the period under review, even as demand from the rebounding construction industry rose. There was a 31 per cent increase in cement imports, from 117,959 tonnes in the first half of 2017 to 154,486 tonnes during the same period this year. The case for an integrated African market - the costs of 'non-AfCFTA' The imports were to plug a 14.2 per cent hole in local cement production as demand shot up by 12.1 per cent. According to the central bank, cement demand in the first half of this year reached 277,695 tonnes from 247,831 tonnes during the same period last year. Rwanda is...

The African Union has launched an advocacy campaign to encourage more countries to ratify the African Continental Free Trade Area (AfCFTA), ahead of the January 2019 deadline to implement the agreement. A business guide developed by the International Trade Centre (ITC) was launched to help the private sector and policymakers better understand and navigate the agreement. Albert Muchanga, the AU Commissioner of Trade and Industry, said the bloc was confident of getting the 15 remaining member states to ratify the agreement by December. So far, Kenya, Rwanda, eSwatini, Chad, Niger, Guinea and Ghana have ratified the AfCFTA, while three countries — Egypt, Kenya and Uganda — have ratified the Common Market for Eastern and Southern Africa (Comesa), Southern African Development Community (SADC) and the East African Community (EAC) Tripartite Free Trade Area. At least 22 ratifications are needed for the AfCFTA to enter into force and 14 are required for the TFTA. Comesa Secretary General Chileshe Kapwepwe said overlapping activities between the TFTA and the AfCFTA needed to be harmonised. Ms Kapwepwe, who is the chair of the TFTA Task Force, said closer co-ordination between the AU and the regional economic communities will be key to successful implementation of both agreements. “The narrative of the regional economic communities being the building blocks of the ACFTA should be promoted to ensure complementarity,” she said. Source The East Africa

Opinion among experts is divided on how fruitful President Yoweri Museveni’s recent trip to the China-Africa forum was after it emerged he failed to ink a deal on funding for the the standard gauge railway. Before the Forum on China-Africa Co-operation summit held last week, officials in Kampala had said that firming up plans for financing the SGR would be high on President Museveni’s agenda. But these plans were scuttled after President Uhuru Kenyatta asked China to give Kenya a grant to complete the Naivasha –Kisumu leg of the SGR. The SGR has been promoted as the most important link for East Africa since the Uganda Railway was built in 1900. Initial plans envisaged a railway line from the Mombasa Port in Kenya to Uganda, Rwanda and connecting back to Tanzania and the DRC. A second line would connect South Sudan to the north. Currently the Kenya, Uganda and South Sudan links are the only ones in the discussion. Kenya’s failure to conclude a financing deal means Uganda is a long way from starting to build its side of the SGR. China had already told Uganda that it would only fund the Malaba-Kampala section of the SGR if Kenya committed to funding the entire Nairobi-Malaba leg of the project. “Once Kenya and China commit to finance the remaining leg of the SGR, Uganda will be ready to start. We in Uganda are ready to conclude the financing agreements,” said Kieth Muhakanizi, Secretary to the Treasury. Some economists say that it...

Kenya will have to wait longer for the East African Community (EAC) to make the much-awaited review of the Common External Tariff (CET). This is as negotiations between member States drag on. Kenya, which since September last year has been pushing hard to have the review fast-tracked, will have to wait for an indefinite period, as Uganda and Tanzania ask for more time to access the impact of such a review on their local economies. Export Promotion Council (EPC) Chief Executive Peter Biwott said the review request at the hands of the EAC secretariat would have happened last September but States are holding back and asking for more time to study its impact. “I believe no country in the region is opposed to reviewing CET and making it more accommodative. But we have regional finance ministers who are asking for more time and that is what is dragging the negotiations,” said Mr Biwott yesterday at the sidelines of the Intra-Africa Trade conference in Nairobi. In 2005, when EAC countries adopted a Customs Union, they committed themselves to the current CET, which Kenya is now demanding to be reviewed. The CET comprises of a triple band structure where raw materials and capital goods traded among EAC countries do not attract any tax. Avoid fake news! Subscribe to the Standard SMS service and receive factual, verified breaking news as it happens. Text the word 'NEWS' to 22840 The second structure is where intermediate goods used to process a final product for example...

A chara, – Those proposing that Ireland should leave the EU have pointed to Ireland’s low level of exports to non-European markets, and especially so-called “emerging” economies, as representing a major opportunity for exploiting these markets in the event of Irexit. This viewpoint fails to appreciate that foreign (mainly American) firms account for 90 per cent of Ireland’s exports. Where these send their exports is determined by their global production and marketing strategies. Foreign firms, for the most part, use Ireland as a base for serving the so-called EMEA (Europe, Middle East, Africa) market, the great bulk of which is accounted for by the EU. In 2016, two-thirds of Ireland’s exports of goods and services went to the EMEA region. The EU accounted for over four fifths of these exports. For some American firms based in Ireland, the US itself is understandably an important market. Hence, that country accounted for almost one fifth of 2016 exports. This means that the rest of the world absorbed just a sixth of Ireland’s exports in that year. However, the American firms operating out of Ireland typically have similar operations serving the other major global regions (the Americas and Asia/Oceania) from bases within these regions. Thus, the firms in question have little reason to expand beyond the EMEA market, since to do so would be to compete with their parallel operations elsewhere. Leaving the EU, therefore, would greatly undermine probably the key reason why American firms locate in Ireland, with little prospect of alternative...

Construction of the Sh40 billion Kipevu Oil Terminal (KOT) at the Port of Mombasa is expected to begin in earnest following the award of the contract to China Communications Construction Company. Kenya Ports Authority (KPA) acting managing director Daniel Manduku said the contract was awarded after the tender committee completed due diligence weeks ago. The new terminal will have the capacity to handle four vessels of up to 100,000 DWT (Dead Weight Tonnage) and will have a Liquefied Petroleum Gas (LPG) line that is expected to help stabilise gas supply in the country. “We are soon embarking on construction of the Kipevu Oil Terminal (KOT) for discharge of fuel to the tanks owned by Kenya Pipeline Company and other oil companies at a cost of about $400 million (Sh40 billion),” Dr Manduku said. Mombasa port currently has only two oil terminals that are ageing and too small to handle large quantities of imported oil and gas. “The KOT will supplement the two facilities at Shimanzi and the old Kipevu terminal,” Dr Manduku said. Construction of the oil terminals is part of KPA’s expansion programme that is seen to be critical to securing the country’s energy needs. Dr Manduku said KPA has also started construction of the second container terminal using a Sh30 billion loan from Japan International Co-operation Agency (JICA). Construction of the first phase of the second container terminal, with additional capacity of 550,000 twenty-foot equivalent units (TEUs) every year, is complete. Dr Manduku said the second phase will...

NAIROBI, SEPTEMBER 13 ―  Kenya is hoping to seal major trade deals and boost its bilateral ties with Turkey as Africa moves to this years’ Turkey-Africa Economic and Business Forum (TABEF 2018) in Istanbul. The country’s private sector lobby institution-The Kenya Private Sector Alliance is leaving nothing to chance as it rallies business entities in the country to ensure representation at the forum, which will bring together companies from over 50 African Countries, over 1,500 Turkish Companies and over 7,000 participants. The forum which will include Business to Business meets and match making between African companies and Turkish companies from all sectors, will also provide a platform for possible intra-African deals. “KEPSA together with the Turkish Embassy in Nairobi extend an exclusive invitation for you to attend the Turkey-Africa Economic and Business Forum to be held under the auspices of H.E. Recep Tayyip ERDOGAN, President of the Republic of Turkey at Istanbul Lutfi Kirdar ICEC in Istanbul,” THE Kepsa secretariat said in an invite to the business community. The forum is scheduled for October 9 – October 11. During the three days event, African countries and their respective institutions will get to discuss opportunities, establish relationships with Turkish public and private operators, demonstrate expertise and business while meeting Turkish and regional managers and economic experts. The forum is being jointly organized by the Ministry of Trade of the Republic of Turkey and Foreign Economic Relations Board of Turkey (DEiK) with the collaboration of African Union Commission (AUC) under the motto of...

The Kenya Ports Authority has started the process of developing the 7,413 acres Mombasa Special Economic Zone in Dongo Kundu, Likoni constituency. KPA acting managing director Daniel Manduku on Wednesday said they will construct one berth and a road on the proposed land. The authority with the support of the Japan International Cooperation Agency is in the process of undertaking an environmental impact assessment of the port infrastructure of Mombasa Special Economic Zone. Mombasa residents have been invited to share their views. Manduku said the zone will open up Mombasa to multi-national industries, which will employ thousands of Kenyans. “We have identified 3,000 hectares ( 7,413 acres) owned by KPA in Dongo Kundu, where we shall develop a special economic zone. We are already doing the feasibility to put up the first berth and a road,” he said. Manduku said Kenya must start developing its own export market, because currently it stands at 15 per cent, therefore the special economic zone shall encourage private sectors to come in and set up export companies. “In developing that SEZ, we shall encourage the private sector to come and set up industries, which will create a lot of job opportunities,” he said. Manduku said the special zone is a big opportunity to Kenyans because a typical industry will employ between 200-300 people. “One industry can sit pretty on a hectare, how many companies can be built on 3,000 hectares, do your math. Those will be very many companies that will provide employment to...