Kenya is a likely beneficiary of another US export window being considered to replace the Africa Growth and Opportunity Act (Agoa) after seven years, experts have hinted. Agoa, which grants the country and 40 other African states quota and duty-free access to the US market of more than 6,000 product lines expires in 2025. “Establishing a more stable, permanent, and mutually-beneficial trade and investment framework with the United States could be transformative for Africa,” said US Trade Representative (USTR) Robert Lighthizer while hinting at the new trade plan. According to administration sources cited by US think tank Covington’s Global Policy Watch, a branch of a US law firm working on various policy issues, Kenya, Ghana, and Côte d’Ivoire could be early contenders for a trade accord with Washington. “We are excited about the prospect of entering into a successful free trade agreement (FTA) with an African country. We believe that this will be good for the United States, the FTA partner, and ultimately Africa,” Mr Lighthizer has been quoted saying. He is reported to have made the comments after African and US officials, private sector representatives, and members of civil society organisations met last week in Washington. 2025 onwards The US hosted the 17th Agoa Forum where discussions also focused on options for a “post-Agoa” model from 2025 onwards, including the possibility of crafting free trade deals. Mr Lighthizer said that he is looking to “announce exploratory talks soon,” without confirming which countries might be first on the docket for...

TANZANIA is set to benefit from a new route which will open up SADC trade corridor to capture and channel trade flows from Zambia and DR Congo to Dar es Salaam port. Zambia and DR Congo begin upgrading of 182km Kasomeno-Kasenga- Chalwe-Mwenda road to dual carriageway through a public-private partnership next year to feed into the Dar es Salaam port currently undergoing major upgrading work to increase its handling capacity from its present 13.8m tonnes of cargo per annum, to 28m tonnes by 2020. The US$ 475 million road project will offer an alternative and shorter route for cargo traffic from Lubumbashi, the mineral rich provinces in DRC’s Katanga region to the Dar es Salaam port. The construction work will be undertaken by Groupe European de Development (GED) Africa and will include a 350 metre cable-stayed bridge and two one-stop border posts, in the DRC and Zambia. According to the GED Chief Executive Officer, Rene Hutton-Mills when completed, the new road will offer an alternative and shorter route for over 600 mineral loaded trucks that travel between Katanga and the Dar es Salaam port. “The new route will be 32 kilometres shorter which will take approximately five days. It will be fitted with modern streamlined border and customs infrastructure and systems.” On the latter, he added that, cross border trade will be further enhanced and streamlined by the introduction of a bespoke Smart Transit System, developed in conjunction with Singaporean Global eTrade Services, a Crimson Logic subsidiary, to fast track...

Since debts can only be repaid if a country generates money through economic activity, some countries may seek to expand their industrial bases or conversely the tax base from which they can collect tax revenues to pay off their domestic debt. The East African region had by 2017 accrued debts amounting to $127.76 billion on an annual gross domestic product that stood at $249.56 billion in that same year. On the continent, the region is a little less indebted than South Africa whose total debt amounted to $191.8 billion in 2017. Nigeria’s debt in comparison stood at $100.7 billion. Nigeria and South Africa are the continent’s largest and second largest economies respectively. That Nigeria was less indebted than South Africa and East Africa can be attributed to its oil revenue that funds the greater part of its national budget. Whereas the Nigerian government received a big chunk of its funding from oil revenue, South Africa taxed its industries and the difference was funded through borrowing. South Africa’s advanced integration into international capital markets and its large industrial base offer the government a high level of liquidity, meaning it can run large debts with greater ease than its East African counterparts. In 2017, South Africa’s domestic debt stood at $177.85 billion to East Africa’s $52.533 billion. In the same year, Nigeria borrowed $69.6 billion from the domestic market. Nigeria’s oil revenue gives it room to borrow less from its domestic markets compared with South Africa. Concurrently, Nigeria’s large and relatively advanced...

Arusha. The East African Community (EAC) is pushing partner states to review over 100 national laws to conform with the Common Market Protocol. The laws relate to free movement of goods, people, labour, capital, services and the right of establishment and residence. “Harmonisation of partner states’ relevant national laws for the purpose has been a monumental task,” said the deputy secretary-general (productive and social sectors), Mr Christophe Bazivamo. He was addressing a delegation from the Centre for Pastoral Areas and Livestock Development under the Intergovernmental Authority on Development (Igad). The mission was seeking to understand the EAC’s policy on transboundary pastoralism and cross-border transhumance, which is the action or practice of moving livestock from one grazing ground to another in a seasonal cycle. Mr Bazivamo said there were still many barriers hindering free movement of people across borders in the region despite efforts to minimise and expedite border procedures. “Sensitisation of people at all levels is therefore necessary as part of efforts to knock down these national barriers.” However, Mr Bazivamo commended progress made in promoting the cross-border movement of skilled labour, citing the signing of mutual recognition agreements (MRAs) among various professionals. He added that MRAs have already been signed by the six member states among accountants, architects, engineers and veterinarians. Negotiations of MRAs for land surveyors and advocates have also been concluded and are awaiting signing by competent authorities. “Negotiations for MRA for pharmacists have commenced,” Mr Bazivamo added when briefing the visitors on efforts being made to...

Kenya is set to invite private investors to bid for construction of 29 more berths along the Indian Ocean coastline as part of the Sh500 billion Lamu port, the largest in the region. The State is already building the first three berths at a cost of Sh48 billion funded by taxpayers, with the first berth set for completion by December. The Lamu Port will have 32 berths upon completion, 29 of which will be undertaken by private investors. The facility is part of the Lamu Port South Sudan Ethiopia Transport (Lapsset) corridor that will comprise roads, railway lines and an oil pipeline meant to connect regional economies and spur trade. “We will soon invite private investors to bid for construction of the berths under the public-private partnership model. “The first bids will be for seven berths, to be followed by the next round of seven berths,” said Lapsset director-general Silvester Kasuku. The China Communication Construction Company won the tender for the government-funded first three berths under construction. The first berth was set to be ready by June but suffered delays. The berths construction by private investors comes after the African Development Bank threw its support behind transactional advisory services for the port which will guide contracts and tender preparation. Upon completion, the port that is the first transshipment hub in east Africa, will be double the size of the 16-berth Mombasa harbour. Source Business Daily

Tea prices at the Mombasa auction fell even as volumes offered for sale declined in the Tuesday auction. A kilo of tea fetched Sh231 this week, down from Sh237 in the previous sale. East African Tea Traders Association, which manages the auction, had last week forecast that the price of the commodity was expected to improve on account of low supply. “We expect the price to pick in the coming days as the shortage of tea resulting from cold weather is likely to push up the cost,” it had said. The volume offered for sale this week dropped by more than 600,000 kilos from 9.2 million to 8.5 million. Poor prices witnessed in the financial year ended June point to low earnings for farmers in second payment towards the end of the calendar year. Growers affiliated to Kenya Tea Development Agency earned Sh42 billion as the second payment last year. This was lower by Sh2 billion than a record high of Sh44 billion earned in 2016. The bulk of the tea from small-scale farmers is sold at the Mombasa auction before it is exported to Egypt, the UK, Pakistan, Afghanistan, Iran, Sudan, Yemen and the United Arab Emirates. Source Business Daily

Exports to Tanzania rose by the highest margin, outpacing other top buyers of Kenya’s goods in the first five months of the year, fresh statistics show, as trade relations begin to improve between the two states. Dar es Salaam ordered goods worth Sh10.54 billion between January and May, 28.58 per cent more than the same period in 2017, data released by the Kenya National Bureau of Statistics (KNBS) last week indicates. By comparison, Pakistan which has remained at the top of the list, ordered goods (mainly tea) worth Sh23.07 billion, a 7.11 per cent drop compared to a similar period last year. Similarly, Netherlands whose orders (mainly cut flower) rose by 13.45 per cent to Sh21.65 billion remained the second-largest importer of Kenyan goods, beating Uganda whose bill dropped 2.76 per cent to Sh21.31 billion. Other top export destinations include the UK, which overtook the US during the period to become Kenya’s fourth-largest market ordering goods valued for Sh17.57 billion or a 12.93 per cent jump as the American order book thinned 7.65 per cent to Sh17.13 billion. The data comes hardly a fortnight after Kenyan Trade PS Chris Kiptoo and his Tanzanian counterpart Elisante ole Gabriel issued a joint statement on July 5 indicating that months of bilateral meetings over a 10-year market access impasse had yielded a breakthrough. Trade relations between the two countries had been souring over the years due to tariff and non-tariff barriers, hurting the flow of goods which had dipped to a 10-year low...

Kenya is banking on the modernisation of Rivatex factories and the adoption of high-yielding seeds to revive the ailing cotton sector. Through the upgrade, whose cost will add up to Sh3 billion by the end of the year, the textile firm targets to spur production from the current one tonne of lint, equivalent to 6,000 metres, to over 12 tonnes or 40,000 metres of finished products in a day, according to the firm. Rivatex currently consumes 10 bales of cotton daily, but this is expected to increase to 70 bales once the modernisation of the equipment is complete. Kenya wants to take advantage of the global markets such as the African Growth and Opportunity Act (Agoa) to change the fortunes of the sector. Under Agoa, goods of more than 6,000 product lines, mainly textile and apparel, accounting for 65 per cent of the total exports, are granted quota and duty-free access to the US market. Kenya ranks among the top suppliers of apparel to the US, having exported $340 million (Sh3.4 billion) worth of goods to the market last year. Kenya’s total exports to the US under the Agoa plan peaked at Sh35.2 billion in 2015, before declining to Sh32.7 billion last year, according to the Economic Survey data. Kenya is yet to fully exploit this opportunity to revive the cotton industry. But the government says this is now changing with Investment and Industry Principal Secretary Betty Maina, noting that the ministry has already rolled out initiatives to return the...

Consumerism is an economic and cultural ideology that encourages the acquisition of goods and services. The Theory of Consumerism states that a country that consumes goods and services in large quantities will be better off economically and experience high growth rate. Over last few decades industrialization has pushed production of consumer goods all over world. Post 1990’s globalization has further enhanced consumerism through multinational company’s growth. It is estimated that 1.7 billion people around the world belong to the consumer class. The consumer class includes people that are able to purchase non-essential goods such as expensive cars, fancy jewellery, and big houses Consumerism is responsible for manmade climatic change.   High rate of growth in production and consumption of non essential goods has led to deterioration of environment leading to climatic change. According to study from Norway between 60-80 percent of the impacts on the planet come from household consumption. Based on climatic change projections, globally countries will experience changing rainfall patterns, rising sea levels, and higher temperatures that will affect food security, agricultural production, water availability,  public health, among others. Population, technology, and consumption are considered to be factors responsible for climatic change. Yet of the three factors consumption seems to get the least attention as responsible factor. One reason for this  is that it may be the most difficult to change; our consumption patterns are so much a part of our lives that to change them would require a massive cultural overhaul, not to mention severe economic dislocation.  Again...

Dar es Salaam. Tanzania and France are expected to accelerate their investment ties as 15 new French companies are set to invest in the country by next year. The French ambassador to Tanzania, Mr Frederic Clavier, said the new firms will add to the 40 firms which are currently operating in the country covering areas of science and technology, transport and energy. Mr Clavier made the remarks during an event to mark the French national day at the weekend. “I have a very good outlook for new investment of French companies into Tanzania….by next year the number of investors will go up from the current 40 to between 50 and 55 companies,” said the envoy. According to him, the expectations are high because Tanzania is a key member of the East African Community (EAC) and a gateway to the Southern African Development Community (Sadc). He said the investment will open up business opportunities between Tanzania and other member countries of the blocs that the country is subscribing to. “This is the right time for us to continue having good relations in a win-win situation with Tanzania. Moreover, France though the French Development Agency (AFD) will be issuing €120 million every year to support development projects and help Tanzania in its efforts to become a middle income country by 2025,” he added. Speaking at the event, the Minister for Home Affairs Kangi Lugola assured France of a continued cooperation to strengthen the bilateral ties. Mr Lugola represented the Minister for Foreign...