US President Donald Trump decided last week to suspend duty-free treatment on US imports of apparel products from Rwanda under the African Growth and Opportunity Act (AGOA). The sanction, which is set to take effect in early June, is in reaction to the East African country’s decision to raise tariffs on second-hand clothing with a view to phasing out imports and encouraging the development of local manufacturing capacity in the clothing sector. The AGOA is a unilateral preference regime that provides to eligible Sub-Saharan African countries duty-free quota-free access to the US market for close to 6,500 products. First introduced in 2000 under the Clinton administration, the scheme has since then formed the cornerstone of trade relations between the US and Sub-Saharan Africa. When its initial 15-year period of validity came to an end in 2015, the AGOA was renewed for an additional period of 10 years, and is thus expected to remain in force until 2025. (See Bridges Africa, 1 July 2015) The suspension of AGOA benefits for Rwanda follows an “out-of-cycle” review launched in June 2017 in response to a petition filed by the Secondary Materials and Recycled Textiles Association (SMART). In this document, the business association complained against a March 2016 decision by members of the East African Community (EAC) to phase out the imports of second-hand clothing by 2019, arguing that such action would impose “significant economic hardship” on the US used clothing industry. (See Bridges Africa, 17 August 2017) “Based on the results of the...

Africa’s textile industry may be caught in the crosshairs of US president Donald Trump’s global trade war. In reaction to Rwanda raising tariffs on used clothing and footwear from the US, the Trump administration says it will suspend duty-free privileges on eligible Rwandan clothing—a benefit of the African Growth and Opportunity Act (AGOA)— within 60 days. US Trade Representative’s office says a suspension rather than a termination of the benefits will “allow for continued engagement with the aim of restoring market access.” Other East African countries, including Tanzania and Uganda, have been spared a similar fate as, according to the trade office, both countries have “committed not to phase in a ban” for second-hand products. Last year, Kenya also backtracked on the 2016 decision from the East Africa community nations to ban used clothing by 2019. The move is an extension of Trump’s “America First” stance seen in the ongoing tariff battle between the US and China. But the Trump administration is being lobbied by the Secondary Materials and Recycled Textiles Association, which says a ban will lead to the loss of 40,000 US jobs and negatively impact the environment with pounds of textile waste ending up in landfills. For its part, Rwanda says the withdrawal of its AGOA benefits are “at the discretion of the United States” and has given no indication of reversing the tariff hike on used clothes from the US. The looming threat of a withdrawal of AGOA benefits is fueling pending conversations about the second-hand...

Kenya has blamed the delay in starting work on a key road linking the port of Mombasa to Tanga on change in design from single to dual carriage along a section of the transnational highway. The African Development Bank (AfDB), the principal financier of the 445-kilometre project, said last week Nairobi was slow in completing preliminary studies such as road designs to pave the way for construction. The road running from Malindi to Bagamoyo — formerly a key trading port in north-eastern Tanzania during colonial times – will cost an estimated $751.3 million (Sh75.93 billion). AfDB will fund about 70 per cent of the project, with the two countries covering 30 per cent of the total cost in their respective territories. Work on the mega project that is expected to take 36 months has been delayed since 2016. It was expected to start this year, but may be delayed further to next year. The connection of Mombasa to Tanga – Tanzania’s second largest port – is expected to unlock trade, tourism and shipping opportunities between the two countries, which have over the years had on-and-off trade disputes. Transport and Infrastructure secretary James Macharia said the new designs will ensure the stretch from Mtwapa to Nyali in Mombasa, including the Mtwapa Bridge, is expanded into a dual and not a single carriage as in the previous designs. “We had to change the designs to make sure we do not have a bottleneck at Nyali-Mtwapa area because the traffic there is a...

Twenty years ago, I hoped for an Africa that would draw closer and forge forward boldly, despite a bag of mixed fortunes. Rwanda had just been blighted by genocide; the ubiquitous coup d’état still reared its ugly head in West Africa; although a tentative calm prevailed in Central Africa, political tensions simmered below the surface; Zaïre was in the throes of the ‘first Congo war’; the civil war in Somalia grew in magnitude and intensity; Ethiopia began an experiment in state-led macroeconomic planning; a democratic South Africa rose from the ashes of Apartheid, a veritable validation of the OAU’s ultimate goal of political liberation for Africa. An interim period of positive change ensued, a growth fuelled by new media including the Internet, greater multiculturalism and a stronger attachment to democratic principles. In March 2018, 44 of the 55 African Union Heads of State and Government enacted the African Continental Free Trade Area agreement (CFTA) in Kigali, Rwanda at its 10th Extraordinary Session, under the able leadership of H.E. President Mahamadou Issoufou of Niger, with H.E. President Paul Kagame of Rwanda as current AU Chairperson and H.E. Moussa Faki Mahamat, Chairperson of the AU Commission. Once in force CFTA will be the largest trade zone in the world, increase intra-African trade by 52% by the year 2022, remove tariffs on 90% of goods, liberalise services and tackle other barriers to intra-African trade, such as long delays at border posts. The end of colonialism in the early 1960s created 55 African countries...

Kenya will not raise its value added tax (VAT) to match the uniform rate for the rest of the countries in the East African Community (EAC), the Treasury has said, offering relief to households and businesses. Treasury Principal Secretary Kamau Thugge on Tuesday said Kenya’s VAT on consumer goods would remain at 16 per cent despite calls to align the rate with the rest of the trading bloc’s members such as Tanzania and Uganda, which charge 18 per cent. There has been growing concern that different rates at which member countries levy domestic taxes is distorting the EAC common market. The Treasury’s decision to retain the current VAT rate has spared consumers an increase in the cost of commodities such as electricity, milk, newspapers, textbooks, fertilisers, alcohol, cigarettes, mobile phone handsets and airtime. Global institutions, including the Washington-based Institute of International Finance (IIF) had tipped the Treasury to raise VAT to 18 per cent as a way of boosting revenues and arrest fiscal deficits that have seen the State take on huge loans. Narrowing deficits The institute reckons that the increase would be in line with the Treasury’s quest to honour its commitment to the International Monetary Fund (IMF) in narrowing deficits. Kenya pledged to slash budget deficits through spending cutbacks and raise tax receipts in exchange for a six-month extension of a Sh150 billion ($1.5 billion) stand-by credit facility from the IMF that was due to expire last month. “Improving the VAT’s collection to five per cent of GDP...

JOHANNESBURG - Rwanda has told the US that it has the right to withdraw benefits of the Africa Growth and Opportunity Act (Agoa) following a decision by Washington to suspend duty-free status for Rwandan apparel products. The U.S. move came after East African countries resolved to raise tariffs on second-hand clothing imports in a bid to boost local manufacturing capacity. Kenya, Tanzania and Uganda have abandoned the joint position, choosing instead to save the economic benefits that accrue under Agoa. In a brief statement on Tuesday, Kigali said the US had the right to withdraw the benefits but that Rwanda would not reverse its decision to restrict imports of used clothes and shoes known locally as mitumba, the East African reported. “Agoa is a commendable unilateral gesture to African countries, including Rwanda, meant to promote trade and development through exports. The withdrawal of Agoa benefits is at the discretion of the United States,” it said. Agoa is a trade deal that allows beneficiary countries in sub-Saharan Africa to export their products to the US duty-free. It was enacted in 2000 to run to 2015 and was renewed to 2025. The decision by the US to suspend benefits instead of terminating Rwanda’s status as an Agoa beneficiary means that continued engagement on restoring market access and bringing Rwanda into compliance with the Agoa eligibility requirements will continue. Rwanda increased tariffs on imported used clothes from $0.20 to $2.50 per kilo in 2016, aiming to eventually phase out importation. Source: Business Report

KIGALI, Rwanda—The government of the Republic of Rwanda has responded to the news that came in early this week that the country has been withdraw as one of the beneficiary under the American African Growth and Opportunity Act (AGOA) project. In a statement posted on the government website, Rwanda said the notification by the United States on suspension of duty-free status for Rwandan apparel products under the African Growth and Opportunity Act (AGOA) follows a decision by East African countries to raise tariffs on second-hand clothing imports, in order to promote local manufacturing capacity in garment and other industries. AGOA is a commendable unilateral gesture to African countries, including Rwanda, meant to promote trade and development through exports. The withdrawal of AGOA benefits is at the discretion of the United States. The News Times Rwanda reports that in 2006, the Heads of State of Kenya, Rwanda, Tanzania and Uganda agreed to take measures to gradually phase out second-hand clothing. On 29th, March, 2018, AGOA posted a statement on its website announcing that the U.S. said it plans to suspend duty-free access to Rwandan textile imports because of the African nation’s refusal to lower trade barriers for American-made clothing and shoes. The suspension applies to all AGOA-eligible apparel products from Rwanda in 60 days, the U.S. Trade Representative’s office said in a statement on Thursday. It was quoted that the USTR last year began an “out-of-cycle" review to determine the eligibility of Rwanda, Tanzania and Uganda to keep their trade benefits...

NAIROBI, April 4 (Xinhua) -- East Africa's bloc on Wednesday lauded Kenya for being one of the first countries to approve the framework establishing the African Continental Free Trade Area (AfCFTA) which will create a single market for goods and services in the continent. The Inter-Governmental Authority on Development (IGAD) said the quick approval of the bill to ratify the AfCFTA demonstrates the strong political will of the Kenyan government to strengthen inter-African linkages on trade through the elimination of trade barriers to foster a liberalized single continental market. "The IGAD Secretariat also welcomes the signature of the African Continental Free Trade Area by all Member States of IGAD - Djibouti, Ethiopia, Somalia, South Sudan, Sudan and Uganda - and will endeavor together with the African Union to work alongside its Members States to facilitate efforts to enhance free trade within its respective region and across the continent," the bloc said in a statement. All the East African countries except Burundi which did not attend the Summit on March 21 in Rwanda signed all the three protocols. Only 22 member countries were required to sign the agreement to make the AfCFTA treaty operational. According to the Africa Union, AfCFTA aims to establish a single liberalized market that will spur industrialization, infrastructural development, economic diversification and trade across the continent that is home to some 1.2 billion people. IGAD said the trade pact which requires ratification by 22 countries before entering into force seeks to increase intra-African trade by 52 percent,...

Zanzibar, March 29, 2018: The regulation activities of food, drug, cosmetics and medical devices in Zanzibar will now be done online. So, will be the issuance of import and export permits for the said goods. This follows the roll out of the Zanzibar Food and Drug Agency e-portal, an online system that digitizes all processes related to the food and drug regulatory services in Zanzibar. TradeMark Africa funded the design and roll out of the e-portal with a grant of US$ 150,000. The e-portal will ease the administration and management of regulatory services and documents issued by Zanzibar Food and Drug Agency, including issuance of import and export permits, registration of foods, drugs, cosmetics and medical device, registration of good manufacturing practice certification, premise registration and all import and export inspection processes. The portal will ease trade document verifications and improve health safety inspections. It is expected that with the system in place, the average time taken to acquire import and export certificate will reduce by 95%, while the costs associated with acquiring the import/export certificate will reduce by 80%. Other benefits include enhanced transparency, integrity and accountability as the online systems collate information, making it possible to analyze data and make informed decision as well as reduce human contact. The portal has been linked to the East Africa Community Medicines Regulatory Harmonization Platform. This will enhance ZFDA’s partnership and information sharing with other National Medicines and Regulatory Authorities allowing it to share as well as access information related to...

This follows the roll out and launch of Rwanda trade portal (www.rwandatrade.rw) Rwanda’s trade portal(www.rwandatrade.rw) will ensure international trade efficiency It will take a trader a maximum of 5 minutes to access summarized information on international trade procedures in Rwanda. Kigali, 29th March, 2018: Rwanda Revenue Authority in partnership with Trademark East Africa launches The Rwanda Trade Portal. The Rwanda Trade Information Portal is a fulfillment of the government of Rwanda’s obligations under the Trade Facilitation Agreement (TFA) of the World Trade Organization (WTO), to which Rwanda is a signatory. The Agreement obliges governments to be transparent and to provide practical guides to trade formalities. As a result, the online platform gives importers and exporters quick access to step-by-step guides on trade-related procedures (licenses, permits and clearance processes). For each step, the system shows the result of the step, who to see (contact details), what to bring (access to documents and forms), what to pay, why the step is obligatory (access to legal justification), how long it takes and who to complain to in case of a problem (the recourse). This forms part of an effort to improve the efficiency of trade in and out of Rwanda by reducing the time needed to import goods by 47% and time required to export by 91%. The United States Agency for International Development (USAID) funded the development and roll out of the portal with US$498,000. UNCTAD and ITC provided technical assistance and Rwanda Revenue Authority is hosting and operating this portal. Traders...