A $3.8 billion railway project linking Kenya's largest port Mombasa and the capital Nairobi is doing well and the railway will reach the break-even point by 2020, an employee of State-owned China Communication Construction Corp (CCCC) has said recently. The comment came after some foreign media suggested the debt for the line, the country's first standard-gauge railway, might be too burdensome for the East African country. The railway was built by China Road and Bridge Corp (CBRC), a subsidiary of CCCC. On Wednesday, tracks were laid for a 120-kilometer extension of the railway - the Nairobi-Naivasha line - toward the Kenya-Uganda border. "From construction to operation, CBRC has kept the overall cost of the railway at a reasonable level, bearing in mind economic feasibility, and kept the operating profit margin low. The railway will reach the break-even point by 2020, when the loans for the project are due," an employee at CCCC told the Global Times. The 480-kilometer railway, also known as the Madaraka Express, marked the first anniversary of passenger services in June. In its first year, the railway carried more than 1.4 million passengers with a utilization rate of more than 90 percent. It also reduced the travel time between the port city and Nairobi to about five hours from more than 10 hours. The project is believed to have boosted Kenya's GDP growth by 1.5 percent. There are doubts over whether the railway is a worthy investment, as the loans for the project amounted to about 6...

What are the challenges to commercialisation of agriculture in Africa? The greatest is how to take advantage of the tremendous opportunity presenting itself right now across Africa because of the shift in consumer behaviour and consumer demand globally towards higher quality agricultural products. This can potentially lift millions of farmers out of poverty. This provides tremendous revenue generation potential and job growth. So, the key challenge for governments is how to support the agriculture sector to take advantage of this. In addition, you see many countries in the region are focused on mineral resources but once the commodities’ super cycle ends, agriculture will still be here. This poses a challenge because governments once had their eye on precious earths and mineral oil and forgot the principles for inclusive growth. East Africa must take advantage of this opportunity-based narrative. The second big challenge is, of course, how can countries position themselves in the face of volatile environment in terms of climate and international markets. We live in an age of increasing protectionism and with little regard for the principles of international trade and that often leads to volatility rather than creating solidarity among countries through trade. How about how Qatar, a desert country, which has reacted to its being blockaded by its neighbours to the extent of importing cows so it can become self-sufficient in milk? This is a reaction we would have recommended for small countries about 15 years ago rather than strive for integration into international trade, because that...

President Donald Trump has suspended Rwanda’s right to export clothing duty-free to the United States over Kigali’s decision to increase tariffs on imports of used clothing and footwear, the U.S. Trade Representative’s office said. The move, initially threatened in March and confirmed on Monday, was seen by many in Washington and Africa as foreshadowing how the Trump administration planned to apply its ‘America First’ trade ideology on the continent. In spite of the suspension, Rwanda will maintain its other duty-free benefits under the African Growth and Opportunity Act (AGOA), America’s flagship trade legislation for Africa. “We regret this outcome and hope it is temporary,” Deputy USTR C.J. Mahoney said in a statement, adding that the move would affect about 1.5 million dollars in Rwandan exports, or about three percent of its total exports to the U.S. Clare Akamanzi, CEO of the Rwanda Development Board, told journalists that companies producing garments for export were already approaching European buyers. “We expect some Rwandan companies to be affected,” she said. “We have a plan for them. We have engaged them and we will be helping with the transition to new markets.” Akamanzi said the government would also assist them financially, though she declined to give details. On the streets of Kigali, where residents say the increased duties on used clothing imports have driven up prices, condemnation of the U.S. decision was muted. “The ‘Made in Rwanda’ clothes are expensive,” said Jean-Marie Nsengimana, a hotel worker and father of four. “It used to be...

Africa’s most populous nation and biggest economy, Nigeria, Eritrea and Guinea Bissau are the only African nations that are yet to make any commitment to the African Union’s Continental Free Trade Area (AfCFTA). According to the A.U. Commission chairperson, Moussa Faki Mahamat, these three have made no commitment to the deal signed in Kigali in March 2018. The A.U. chief said the body’s projection was to have all nations on board so that the AfCFTA could enter into force in January 2019. On the flip side, six African countries have since ratified the deal while the vast majority of countries have only signed it. The six are: Rwanda, Niger, Chad, Kenya, Ghana and Swaziland (eSwatini.) Three others; Tanzania, Zambia and Botswana, have only signed the Kigali Declaration but have yet to sign the deal and deposit instruments of ratification with the A.U. Back in Kigali, 44 of the 55 African Union Heads of State and Government enacted the AfCFTA at its 10th Extraordinary Session, under the leadership of Nigerien President Mahamadou Issoufou. The Kigali Declaration, as it is known, was also witnessed by President Paul Kagame of Rwanda as current AU Chairperson, and Chairperson of the AU Commission. Nigeria and South Africa’s refusal to join from the beginning raised issues with the deal given that the two were the continent’s economic powerhouses. South Africa subsequently signed the deal but Nigeria insisted that it was doing broader consultations back home before any concrete decision is made. President Buhari recently intimated that he...

Arusha. The East African Community (EAC) is mobilising funds for renewable energy projects which can lead to reduction of firewood and charcoal use by 50 per cent. The new drive would start with formulation of the Regional Renewable Energy Master plan alongside with energy efficiency and conservation programmes. “Our main focus is on ensuring environmentally friendly energy sources through attracting investments and promoting competitiveness and trade,” said the EAC deputy secretary general (Productive and Social Sectors) Christophe Bazivamo. He was speaking during the on-going exhibition of renewable energy technologies by the German energy initiative called Energiewende. The July 23 to August 10 exhibition at the EAC headquarters is aimed at exposing the region to efficient energy technologies from Germany, which intends to stop the use of nuclear energy. “Modern energy services mean accessing 50 per cent of the population that currently uses traditional cooking fuel to renewable sources,” he said. Available statistics indicate that modern energy consumption in EA was about 130 KwH per capita, which is considered one of the lowest in the world. In an effort to promote renewable energy, the community last year created the EA Centre of Excellence for Renewable Energy and Efficiency based in Kampala, Uganda. According to Mr Bazivamo, funds are also being mobilised to facilitate the formation of the proposed Regional Renewable Energy Association and harmonisation of the standards. The Germany government pledged to assist the region in the renewable energy drive, saying it would increase energy efficiency and protect the climate. “We...

Intra- Common Market for Eastern and Southern Africa (Comesa) exports recorded a slight drop in value, partly due to the decline in oil prices and commodity prices since 2014. Total intra-Comesa exports fell by 1.76 per cent to Shs29.2 trillion in 2017, down from Shs29.7 trillion recorded the previous year. According to records, Egypt, Kenya, Uganda, Zambia and Sudan took the lead in inter-Comesa exports out of all the 21 member countries after Tunisia and Sudan joined the bloc. Egypt in the year ending, exported goods worth Shs5.6 trillion to mostly Comesa members. Kenya followed with trade worth Shs5.3 trillion. Uganda took the distant third position at Shs3.7 trillion. Zambia and Sudan were in the fourth and fifth position with export trade worth Shs3.4 trillion and Shs2.9 trillion, respectively. Ms Yvette Sylla, the chairperson of Comesa Council of minister, however, added that intra-Comesa exports recorded a negative. The other factor associated with the decline in 2016 is the drought which affected most of the countries especially in eastern Africa. Intra Comesa trade Uganda is among the top five member countries that have contributed to the 81 per cent growth of intra-Comesa trade since the Free Trade Area started that started in 2000. Latest records from the Comesa Secretariat, show that trade has risen to nearly $8 billion (Shs29.6 trillion) as of 2017, up from $1.5 billion (Shs5.5 trillion) recorded in 2000. Ms Sylla said: “Comesa’s programmes and approaches to market integration, including the resolution of non-tariff barriers served as a...

East African Business Council (EABC) was established to foster private sector interests in the East African Community. But over the years, this task has proven tougher to chew. Prosper’s Ismail Musa Ladu interviewed the director Madhvani Group and chairman Uganda Sugar Manufacturers’ Association, Mr Jim Mwine Kabeho, who last month completed a one-year term (2017/18) at the helm of EABC. Excerpts below. How would you account for your time at the helm of EABC?  During the one year, I concentrated on promoting local content. This is because currently, all partner states are carrying out mega projects in oil and gas, mining, building dams and bridges, construction of roads, railways and establishing airports and harbours. All these need materials such as cement and steel which can be sourced locally. Even skills, food and labour can all be sourced domestically. But because we do not have an EAC Content Bill for the region, contractors, most of whom are foreigners, are taking advantage of that gap and importing all materials outside East Africa. This is not acceptable! I also advocated for increased agricultural sector funding. I encouraged women in business programmes and made a call for businesses in the region to embrace innovation and technology, let alone getting involved in climate change mitigation measures. Issues of Non-Tariff Barriers (NTBs) remain a challenge for private sector in the region. How did you handle this perennial problem? Over the 12 months, we massively fought Non-Tariff Barriers (NTBs). This was done by trying to harmonise positions...

The Economic Commission for Africa has said that the entire continent stands to gain much more from AfCFTA than it benefits from other trading arrangements with regions outside the continent. The statements were made during a policy dialogue to discuss the African Continental Free Trade Area (AfCFTA) and assess the country’s readiness to tap into the agreement’s potential. The Economic Policy Research Network (EPRN) of Rwanda in partnership with UN Economic Commission for Africa (ECA) and Rwanda Ministry of Trade and Industry were part of the stakeholders at the dialogue. Andrew Mold, Officer-in-Charge of ECA in Eastern Africa said that Africa stands to gain much more from AfCFTA than it benefits from other trading arrangements with regions outside the continent. He noted that the ECA has estimated that if fully implemented, the AfCFTA could double the amount of intra-African trade. Mr Mold explained that despite having been granted preferential market access to high-income markets for many decades now most countries on the continent are still import-dependent and export excessive amounts of unprocessed commodities, and, as a consequence, run up large trade deficits. “Large trade deficits slow down the pace of economic growth and development”, he said. “We clearly need a new approach to tackle these problems – the implementation of the AfCFTA is that approach,” Mold said. “We are talking about 1.2 billion people with a combined GDP of $2.2 trillion, so it’s a huge market”, said Michel Sebera, Permanent Secretary in Rwanda’s Ministry of Trade and Industry. Sebera added...

Only a few recommendations — 16 per cent — of the 5th EAC Secretary General’s Forum held in Burundi in 2017 have been implemented. Lilian Awinja, executive director of the East African Business Council (EABC), said this week that 43 per cent of the recommendations were partly implemented, 36 per cent were not implemented and 5 per cent had no update at all. “These figures are worrisome,” Ms Awinja told the 6th Annual EABC Secretaries General Forum in Nairobi. The annual forum reviews the work plan and progress reports on the Consultative Dialogue Framework for private sector, civil society and other interest groups, considers translating the resolutions into policy and defines the success stories of the dialogue process. The 6th Forum featured about 100 representatives from the private sector, civil society, professional bodies, academia, media, EAC organs, development partners and other interest groups. In the Bujumbura forum in June 2017, the parties agreed on 33 recommendations, including the establishment of a One Network Area (ONA) to reduce the cost of communication through harmonisation of roaming charges, and one airspace to facilitate air transport. Introduced in October 2014, the ONA was meant to harmonise tariffs on mobile voice calls, SMS and data transmission within the EAC. Rwanda, Kenya and Uganda removed roaming charges, making mobile calls between the three countries local. This led to a 400 per cent increase in the volume of phone calls — a direct benefit to EAC citizens and businesses operating across borders. The second phase was...

The Single Customs Territory is a milestone towards integration of the EAC region. It is a stepping stone towards the attainment of a Customs Union. In a bid to enhance the clearance of goods, minimise controls at internal borders and decongest the ports to boost trade facilitation in the East African Community, the presidents of the EAC partner states agreed to fast-track the implementation of the SCT, which was later launched in October 2013 and implemented by revenue authorities in January 2014. After successful rollout of the SCT processes for all imports into Uganda in December 2017, Uganda Revenue Authority is now set to roll out the SCT procedures for Ugandan Exports that are destined to the world all over. The rollout is effective July 19, 2018, and will commence with a pilot of coffee exported through the Port of Mombasa, and subsequently other exports, including tea, hides and Skins, etc. According to Dicksons Collins Kateshumbwa, the Commissioner Customs URA, the new procedures will be piloted with Uganda’s main exports because the benefits are expected to have instant significant impact on Uganda’s competitiveness and on the economy as a whole. Between July 2017 to December 2017, Uganda’s Top 20 exports contributed 64.58 per cent of the total exports worth, with a value of Shs3,036.036b out of a total of Shs4,701.093b. The top exports included coffee, gold, maize, beans, and tea, with values of Shs888,880b, Shs502.699b, Shs179.604b, S164.646 billion , andShs152.715b respectively. The main destinations of Uganda’s exports in the same...