Members of African regional trading blocs have been asked to hasten implementation of the Trade Facilitation Agreement (TFA) to reduce cross border trade costs in a bid to grow economies. Mr Erastus Mwencha, the former Deputy Chairman of the Africa Union Commission, said the efficiency of trade hinges on the support of regional blocs such as the East African Community (EAC), the Economic Community of West African States, and the Southern African Development Community (SADC), in adopting a more open stance on trading with each other. Mr Mwencha said the TFA would bring about new markets and cost reduction gains. “We must minimise cross border costs in Africa,” said Mr Mwencha. “When the trade facilitation agreement was introduced globally, it showed that if it is implemented optimally there will be a cost reduction of up to 14 per cent. This will add to the global trade value of about $1 trillion.” Mr Mwencha was speaking at the Kenya School of Monetary Studies during the Second World Customs Organisation East and Southern Africa Regional Conference in Nairobi last week. It was hosted by the World Customs Organisation Regional Training Centre (WCO RTC Kenya). Delegates from the Common Market for Eastern and Southern Africa (Comesa), the Intergovernmental Authority on Development (Igad) and SADC attended the conference where they discussed the impact and the implications of the TFA. The United Nations Conference on Trade and Development (UNCTAD) was represented by Dr Mukhisa Kituyi, its Secretary General, who elaborated on the steps they were...

As the Jubilee team enters its second term of leadership, I am sure it is busy firming up development plans including infrastructure projects. The leaders will likely be focusing on projects that will define their legacy as they seek to complete those started and embark on new ones. Unlike in their first term, the national debt is today quite high thus limiting cash available for new projects. This is why the government will need to sharpen its pencils in deciding what projects to prioritise. It is expected that only those projects that clearly add value to Jubilee’s economic, political and social agenda are likely to make the cut and this will largely borrow from their election promises. In 2013 the government prominently focused on regional connectivity infrastructure, especially with Uganda and Rwanda. Out of these, it is mainly the standard gauge railway (SGR) that has survived the day. The railway is operational all the way to Nairobi with much progress recorded for a Naivasha extension. To register full economic value, the SGR should remain a top priority until it reaches the border. It is understood that Uganda is finalising funding for the railway from the border to Kampala, and thereafter Rwanda will likely extend it to Kigali. It is when the railway reaches Kampala that Mombasa port will realise its maximum potential, while ring-fencing its competitiveness as a regional port. With the SGR already making good progress, the proposed dual carriageway between Mombasa and Nairobi becomes less of an economic...

Orders from Kenyan factories continue to face increasing threat from cheaper products from Asia and import substitution in key regional countries, putting into question the competitiveness of the country’s manufacturing sector. The country is increasingly relying on foreign countries for supplies, with the value of imports growing at faster rate of 23 per cent year-on-year, to nearly Sh1.16 trillion in eight months to August. The value of exports, on the other hand, was flat in that period, expanding by 0.2 per cent to Sh394.4 billion, latest data from the State-owned Kenya National Bureau of Statistics (KNBS) shows. While the total exports may not give a clear picture of the hard times the country’s manufacturing firms are facing, a look at exports to selected regional countries does. Tanzania, which Kenya has had a long-standing trade feud with, posted the biggest drop in the order book, Sh5.66 billion, compared with last year. Demand from land-locked Uganda, Kenya’s largest trading partner, and Rwanda, was largely muted, with the value of orders falling by Sh717 million and Sh267 million, respectively, to Sh41.127 billion and Sh11. 394 billion. Exports to Ethiopia also fell by Sh1.02 billion in the January-August period to Sh4.675 billion, with only Somalia, where consignments are largely khat (miraa), posting a Sh3.05 billion rise to hit Sh13.929 billion. “When we started the EAC, they didn’t have many industries. (But) their industries have been growing. What, for example, Uganda used to import from here, it is now manufacturing,” chairperson of Kenya Association of...

Ours is a continent rich in resources. From the coffee beans and cotton to mineral ores and oil wells, Africa is world-renowned for its raw materials. However, exporting raw materials alone will not allow Africa to reach its potential. Indeed, the recent slump in global commodity prices has served as a harsh reminder that our traditional reliance on raw materials needs to evolve. It is only by transforming our commodities into value added goods that Africa will reap the full benefits of our natural strengths. Transforming our resources will create larger profit margins, growth and jobs. This transformation will, however, require a big industrialisation drive across the continent to foster trade and growth. Advertisement In the wake of Africa Industrialisation Day, which this year reflected on how to accelerate Africa’s progress towards the creation of a Continental Free Trade Area, we must also consider the supporting infrastructure required to make this pre-eminent objective a reality. All economies – on the global scale, but also on the regional and local level – demand a high level of circulation, which is only possible through the development of the necessary infrastructure. In Africa, the lack of infrastructure is one of the greatest inhibitions preventing transformative growth. Ours is the only continent in the world without a transcontinental railway; in a continent where 16 out of 54 countries are landlocked, this is a real issue. Our infrastructure development therefore needs to be multimodal, ensuring that our coastlines are connected to our railways, airways and...

The Organization of Islamic Cooperation (OIC) announced on Thursday its plans for the Dakar-Port Sudan rail network project, which will link West and East Africa. Ambassador Hameed Opeloyeru, OIC assistant secretary general for economic affairs, announced an alliance with the African Union as the sponsor of the Dakar-Djibouti transport project, which is similar to the OIC scheme. He was delivering a speech on behalf of Yousef Al-Othaimeen, OIC secretary-general, during a session in Istanbul on the sidelines of the 33rd meeting of the Standing Committee for Economic and Commercial Cooperation of the Organization of the Islamic Cooperation (COMCEC). Opeloyeru said that ensuring the continued engagement of regional organizations — the Economic Community of West African States (ECOWAS) and the West African Economic and Monetary Union (UEMOA) — as part of OIC’s Dakar-Port Sudan railroad network project would help to implement regional projects along the OIC transport corridor of the Dakar-Port Sudan railroad while addressing the challenges that may impede financing the project. He said that the OIC aims to strengthen its cooperation with non-States members — such as China — to ensure their participation in the Dakar-Port Sudan rail project through contributing to capacity building and providing entrepreneurs and business owners with financial support. It wanted to ensure that the project would be a meeting point with China’s Silk Road transport infrastructure project, “One way – one belt.” “This multi-stakeholder approach will further increase the engagement of state members involved in OIC’s Dakar-Port Sudan railroad project, which will serve as...

Several Ugandan businessmen with trucks that ply the Dar es Salaam-Mutukula route are protesting the continued high charges at the border, writes ALON MWESIGWA. Have you ever wondered why many trucks carrying goods have foreign registration plates? The Observer has learnt that several Uganda truck owners prefer to register them elsewhere to avoid paying high levies at border posts. The Observer recently caught up with a Ugandan petroleum retailer who preferred anonymity in order to give a first-hand account of the troubles Ugandan businessmen go through to transport goods through Tanzania. He intimated being part of a group doing this to avoid taxes. He said he intends to buy 20 trucks to transport his oil products from the Tanzanian port in Dar es Salaam to Kampala. The aim, he noted, is to substantially reduce on the fees he has to pay to get his goods to the market. Two options popped up: register trucks as Ugandan-owned and pay through the nose when going through Tanzania or register the trucks as Tanzanian-owned and pay nothing going through Tanzania and only a small fee when he reaches Uganda. He has chosen to go with the second option. "If the trucks bear Ugandan plates, I will pay $500 (Shs 1.8m) per truck when I am going through Tanzania," he said. "But I will only pay $50 (Shs 180,000) in Uganda when they bear Tanzania number plates." He intimated it is a common practice among Ugandan truck owners to cut transit fees when going...

Traders in Kenya stand to benefit from increased efficiency following launch of the Information for Trade in Kenya web portal (infotradekenya.go.ke), which has consolidated more than 120 documents and procedures required for import and export business in Kenya on one online platform. The portal is estimated to serve at least 1.5 million users per month and consolidates 73 documents under exports, 52 under imports and one under transits (cross border trade) thus ensuring a shorter period in the export and import processes. "The InfoTrade Kenya portal is part of the Government's initiative to facilitate trade in line with the World Trade Organization (WTO) Agreement on Trade Facilitation, to which Kenya is a signatory and obliges governments to be transparent and to provide information to businesses." Dr. Kamau Thugge, Principal Secretary, National Treasury - Kenya Kenya Trade Network Agency (KenTrade) implemented the portal with financial support of approx. US Dollars 498,000 from United States Agency for International Development (USAID) through TradeMark Africa (TMA). The portal provides step-by-step guidelines and contacts on the procedures and documents required by a trader seeking to import or export various commodities from Kenya. United Nations Conference on Trade and Development (UNCTAD) provided technical assistance. Presiding over the launch, the National Treasury Principal Secretary, Dr. Kamau Thugge said, "The InfoTrade Kenya portal is part of the Government's initiative to facilitate trade in line with the World Trade Organization (WTO) Agreement on Trade Facilitation, to which Kenya is a signatory and obliges governments to be transparent and to...

The Government Wednesday unveiled a web portal that summarises information on international trade. The Information for Trade in Kenya web portal consolidates more than 120 documents and procedures required for the import and export businesses. A trader is expected to take a maximum of five minutes to access information from the platform by Kenya Trade Network Agency (KenTrade). United States Agency for International Development (USAid) through TradeMark Africa funded the project to the tune of $498,000 (Sh51.3 million). National Treasury Principal Secretary Kamau Thugge said the platform would put Kenya on the global trade map. Source: Standard Digital

Clearing and forwarding agents have blamed non-tariff barriers for slow movement of cargo at the Mombasa port. They say the Kenya Revenue Authority (KRA) introduced new procedures at the key infrastructure that have now become an impediment to trade. “Cargo is coming to the port but the rate at which it is leaving is slow. The problem is that there are procedures that have been introduced which are leading to slow clearance of cargo,” said Kenya International Freight and Warehousing Association (Kifwa) chairman, William Ojonyo, on Thursday. According to the lobby, although the political impasse between President Uhuru Kenyatta and Nasa leader Raila Odinga that lasted more than three months was partly to blame for slow movement of goods from the port, there were more underlying issues. Kifwa said three months ago that clearing agents had incurred a Sh600 million loss as traders scaled down their activities at the port due to electoral anxiety. “We cannot blame the political atmosphere because that is not the problem. KRA has missed its target by billions of shillings not because the ships that were calling at the port are not coming. The problem is that the cargo is taking unnecessarily long to be cleared,” Mr Ojonyo added. The logistics lobby group claimed that nearly all goods coming to the country by sea were being subjected to stringent procedures including mandatory verification that took too long. “For the first time in the history of clearing and forwarding, all cargo is attracting storage charges because...

Rwanda should increase national savings, improve the human capital resources, as well as transform the agriculture sector to achieve its development goals and ensure sustainable growth, experts have said. Speaking during a policy dialogue on “requirements for sustainable growth” in Kigali, the experts also called for more support to the private sector to ensure Made-in-Rwanda initiative succeeds and help reduce on the import bill. “It is also essential to ensure citizen participation and inclusiveness and enhance good governance and accountability,” they added during the dialogue was organised by Rwanda Economic Policy Research Network (EPRN) in collaboration with Ministry of Finance on Tuesday. It brought together researchers from academia and international organisations, economists, business leaders and general public. Speaking at the event, Prof Kasai Ndahiriwe, the director of monetary policy and research at National Bank of Rwanda, said firms like cement maker, Cimerwa have played a big role in reducing imported building materials. This strengthens the call for increased support to industrial sector to improve the country’s balance of trade and reduce trade deficit. Prof Ndahiriwe said Rwanda’s formal trade deficit eased by 22.6 per cent in the first nine months of 2017, to $1,007.0 million, from $1,302.10 million due to 47 per cent increase in formal exports and 5.4 per cent decline in formal imports. The decline in import bill resulted from the rise in domestic production of some items, such as cement. “As a result, during the same period, formal imports coverage by exports improved to 38.6 per cent against...