Dubai-based ports operator DP World would have done well to beware the ides of March. This was the month in which the governments of both Djibouti and Somalia kicked out the state-owned entity. The two separate quarrels over infrastructure deals have origins and ructions that go far beyond the ports themselves, reflecting a complex network of shifting regional alliances, geopolitical manoeuvres by influential powers in the Middle East and North Africa, and the potential for profit – and corruption – such large projects invite. In February, after six years of conflict, President Ismaïl Omar Guelleh’s government in Djibouti took over the Doraleh Container Terminal (DCT) that it had built in a joint venture with DP World. Djibouti complained about the commercial terms of the contract, saying that it was lopsided in the Emiratis’ favour. The government is now looking for new investors. It recently hosted delegations from CMA CGM and Pacific International Lines, and has received attractive offers from its allies in Ethiopia. Aboubaker Omar Hadi, president of the Djibouti Autorité des Ports et Zones Franches (APZF), complained to our sister magazine Jeune Afrique about the long and difficult divorce with DP World. He said: “For six years, we tried to renegotiate the contract without success. In February, we proposed buying out their shares of Doraleh Container Terminal. They were about to accept, but they insisted that we should not develop any other ports in the country. It was a blatant attack on our sovereignty.” In April, President Guelleh told...

The Port of Mombasa plans to increase the number of containers it handles to two million Twenty Foot Equipment units (TEUs) by 2022. Last year, the port handled 1.2 million TEUs and targets 1.3 million this year. The increase in volume of cargo at East Africa’s biggest port will result in a rise in revenue from Sh50 billion netted in July alone to about Sh100 billion monthly. Before major changes were initiated at the port to ensure efficiency following the appointment of Kenya Ports Authority (KPA) acting managing director Daniel Manduku, the port netted about Sh30 billion monthly in revenue. In 2017, the port handled 30 million deadweight tones of cargo, up from 21 million in 2012. Dr Manduku is however upbeat that the volume will hit 45 million tones in the next four years to achieve the Sh100 billion revenue. The envisaged two million TEUs of cargo annually, he said, will enhance KPA operations. In its port performance programmes released last week during a stakeholders round-table and cocktail on Vision 2030 at English Point Marina in Mombasa, delivery board chairman James Mwangi said the facility had recorded tremendous growth in container traffic and cargo volumes. “In 2012, the port handled 900,000 TEUs and by the end of 2017 it had handled 1.2 million TEUs, an increase of about 32 per cent. Cargo volume in deadweight tonnes also increased from 21 million in 2012 to 30 million in the same period,” said Dr Mwangi. Dr Manduku said improved cargo clearance...

Financial support from Germany to the East African Community (EAC) would from now largely focus on improved trade integration of the bloc. Another key priority would be on technical cooperation, it emerged during last week’s talks between the two sides. “The cooperation will continue in many areas with more focus on implementation to achieve tangible results”, said Dr Kirsten Focken, the cluster coordinator of GIZ-EAC Programme based in Arusha. She said during a meeting to plan the next phase of development support to EAC by the European economic powerhouse that new projects have to benefit regional integration. “We have to come up with clear and smart project objectives, outputs and indicators for the next phase of cooperation,” she said. The fourth phase of the multimillion euro EAC-GIZ Support Programme comes to an end in the middle of next year. The planning process for a new phase of the programme started last September with a series of appraisal meetings by the consultants. EAC deputy secretary general (Productive and Social Sectors) Christophe Bazivamo said the long-standing German support to the bloc’s integration would continue. “Implementation of the Customs Union and continued implementation of the Common Market will remain the core areas of support and cooperation,” he told the meeting. The support in the next phase of the programme would focus on economic sectors through regional cooperation and improved trade integration. According to the EAC secretary general, Amb Liberat Mfumukeko, Germany had supported the EAC to the tune of 290 million euros in...

Few modes of transport evoke such a sense of history and romanticism as rail. The first recorded use of rail transport was around 500BC, when ancient Greeks used a rail-like system – most likely powered by humans or horses – to carry boats across where the Corinth channel currently is. In the 1400s, German miners used wooden railways that were pushed by hand or pulled by horse. After the first iron rails were introduced in England in 1767, it took less than 40 years before Richard Trevithick built the first steam locomotive, also in England. In 1830, the world’s first regular steam passenger rail service was inaugurated by the Canterbury & Whitstable Railway. Africa’s first network of railways was started in Alexandria, Egypt in 1852. By 1860, South Africa had launched its first steam train, running from Central Durban to the Point, and by 1897 a railway line between Cape Town and Bulawayo in Zimbabwe was completed. In the early part of the 20th century rail lines were being constructed across the continent, connecting cities and countries in North, East, West and Southern Africa. Today, fast-growing economies across the continent are upgrading antiquated rail infrastructure to support improved regional trade and mass local transit. However, according to the African Development Bank, the poor condition of rail infrastructure and rolling stock in many African countries is undermining the potential of rail systems to contribute to economic development. Critical priorities for rail development in East Africa Governments and rail operators are responding...

Regional coffee growers, exporters and sector policy makers are turning their focus to domestic consumption, a move they say is intended to cushion them against fluctuations on the international market, which sometimes adversely affects their incomes. They were speaking Friday at the official launch of the 17th African Fine Coffee Conference and Exhibition (AFCC&E) in Kigali. The event is running under the theme, 'Specialty Coffees at the Heart of Africa', and it is focusing production and marketing of high quality coffee. The event was organised by African Fine Coffees Association (AFCA) and Rwanda's National Agricultural Export Development Board (NAEB). About 2,000 people are taking part in the event, including coffee producers, exporters, roasters, policymakers and buyers from around Africa, the Americas, Europe, among other parts of the world. Samuel Kamau, the Executive Director of African Fine Coffees Association, said: "Local consumption is our future because we have to be self-sufficient. We cannot rely on donations. It creates the first base market for our farmers, so they do not have to worry about international prices going down." "For countries like Ethiopia, the prices on the international market are normally better than those on the international market. The international market has to pay more because (international consumers) are competing with the local people". Regional countries, he observed, can tap into the African Continental Free Trade Area, a deal signed in Kigali earlier this year with view to liberalise intra-African trade. "For instance, we want Rwanda to trade with Kenya, with Uganda and...

Non-tariff barriers remain the toughest headache for Comesa member states, and must be handled to clear way for free trade in Africa. Comesa Secretary general Chilese Mpundu Kapwepwe said there are also a number of sensitive products which member countries would not prefer to have tariffs removed, hampering the process to smooth harmonization of trade laws. “Once the restrictive barriers are harmonized, it will increase intra-trade among member countries,” she said on the sidelines of the heads of customs sub-committee meeting which ends today. The Tripartite Free Trade Area which should ideally harmonise the various trade groupings, has so far been ratified by 22 of the 26 member states of Comesa, East African Community and Southern African Development Community (SADC). The tripartite FTA brings together a population of 700 million people with an estimated Gross Domestic product of well over $1.4 trillion (Sh 140.9 trillion). It is looking to leverage on working recommendations for digital trade to see progress in the TFTA and the whole Comesa region. Identification, removal and monitoring of Non-Tariff Barriers to trade by the Member States in the Tripartite Community is one of the priority areas for policy harmonisation and coordination under the Tripartite framework. The two-day meeting is part of efforts for the 22 member states to give guidance and coordinate regional and national customs procedures and specifically customs related issues. The medium term strategic plan is focused on improving customs co-operation and trade facilitation to simplify and enhance automated and digitalized customs systems. Among...

Kenya’s trade deficit widened by Sh55.64 billion in six months to June on increased food and machinery imports as exports remained sluggish. The deficit — the gap between imports and exports — increased to Sh601.94 billion, up from Sh546.30 billion, according to the Kenya National Bureau of Statistics data. Analysts say the widening deficit is piling pressure on the shilling against global currencies such as the dollar and denies Kenya an opportunity to create more jobs because locals lose out to foreign manufacturers. The high demand for the dollar to fund imports forces the Central Bank of Kenya to intervene, depleting foreign exchange reserves. Imports increased by Sh75.69 billion, or 8.94 per cent, to Sh921.88 billion, while exports rose at a slightly slower pace of 6.68 per cent to Sh319.94 billion. A persistently higher demand for imports than exports may mean Kenyan jobs are being lost to factories in major source markets such as China, which earned Sh202.72 billion from goods she shipped to Kenya in the six-month period. Beijing’s shipments, however, dropped marginally from Sh213.05 billion a year earlier on reduced machinery and equipment orders for the standard gauge railway construction works. Imports from China include textile products, which are cheaper due to a relatively uncompetitive local industry. “Time and again, the government has been trying to revamp that (textiles) sector, but with the cheaper imports, it has not been successful and something has to be done to arrest that trend,” said Genghis Capital senior research analyst Churchill Ogutu...

The resolve by the East African Community member states to market the region as a single investment destination was laudable, as it was widely expected that the gains of regional integration would thus trickle down to all citizens. Still, while regional integration has been the mantra of the EAC heads of state and regional policy makers, the key question is whether this dream will ever be realised, going by the persisting trade wars between the member states. Although significant milestones have been achieved with the signing and ratification of key protocols, the region still has a long way to go to attain its goal of unity. The trade wars and the seemingly lack of commitment by some partner states on the implementation of joint regional projects such as the pipeline and the crude oil refinery have sent mixed signals about the commitment to regional integration. The trade disputes are eroding the gains of the Common Market Protocol, which provides for free movement of goods, services, labour and capital within the regional bloc. The success of the Common Market is critical to the ongoing regional integration process because it will pave the way for the achievement of the monetary union and the EAC political federation. Last week, Tanzania cracked down on sugar imports from Uganda, claiming the commodity had been sneaked into Uganda from Kenya, which is entangled in a domestic sugar crisis caused by importation of large amounts of contaminated duty-free sugar. Dar imposed a 25 per cent import duty...

Mitumba business will thrive even after National Treasury Cabinet Secretary Henry Rotich told MPs he intended to slap the items with higher duties in a bid to revive the textile industry. Kenya has broken ranks with its East African Community (EAC) peers to reduce tariffs on imported second-hand clothes in a strategic decision by President Uhuru Kenyatta's administration to maintain cordial relations with the United States. Under President Donald Trump, the US has not hesitated to pick up trade wars, indiscriminately tussling with both economic giants China and minions Rwanda. An EAC Gazette of June 30 shows that Kenya's importers would bring into the country second-hand clothes, popularly known as mitumba, at a reduced tariff of $0.20 (Sh20) per kilogramme for the next 12 months. This is after a reduction of 50 per cent from an applied tariff of $0.40 (Sh40) per kilogramme. The decision brings into question Uhuru's plan to protect local textile manufacturers and revamp the sub-sector to unleash tens of thousands of jobs. But this will certainly assuage Mr Trump. The real estate mogul, who has vowed to ‘make America great again,’ has already sanctioned Rwanda for increasing import duty on second-hand clothes. "The President has been invited to the US, and so you do not want to create an awkward moment diplomatically,” says University of Nairobi Economics lecturer Gerishon Ikiara. Trump has invited Uhuru to Washington for an official visit set for August 26, with discussions including regional peace and stability set to feature prominently during...

Owing to such illegal entry points the tax authority has not been able to reach its set targets in revenue collection, with a sizable chunk being lost through such ‘panya’ routes. Minister for Works, Transport and Communication Isack Kamwele revealed the shocking number of illegal ports and airstrips on Friday when he was on a familialisation tour of TPA and Dar es Salaam port where he held a meeting with the port’s management. He said a survey conducted by TPA identified 134 illegal entry ports on lake shores and the shores of the Indian Ocean while 58 airstrips were found to be operating while unregistered. He said Kibirizi port, which was operating illegally in Kigoma municipality, was said to have collected revenues totaling Sh40m a month when TPA decided to post its staff to oversee it. The porous entry points which have been identified by the Tanzania Ports Authority (TPA) are believed to be operating 24/7. They exist on the shores of the Indian Ocean and the shores of inland lakes such as Tanganyika and Nyasa which border neigbouring countries. Some of the items shipped in through the illicit entry points include sugar, cooking oil, cement, timber, minerals and many other items which contribute to the killing of local industries owing to dumping. “These funds were formally being pocketed by individuals. If one porous port can generate Sh40m a month in revenue, how about 133 other ports located in various parts of the country?” the minister queried. He said the...