Travel within Africa is not easy, it is expensive and often frustrating. The regional blocs have been working on travel agreements, particularly air travel to facilitate easy travel, but the high cost of tickets and airport taxes are making travel still expensive and out of reach of many citizens. But the East African Community (EAC) is taking a giant step to make travel within the region cheaper by classifying air travel from one country to the other domestic. A report by the East African says by the end of 2017, flights between countries in the region will be classified as domestic. The benefits will accrue to travellers because, according to the report, it will lower the price of air tickets and increase the number of air passengers. “The change will see the price of air tickets drop by up to 12 per cent across the region, with domestic flyers charged a service fee of $5, compared with the $50 paid by international passengers,” it said. While it is easier and cheaper to travel from Kenya to Rwanda by air, it is practically impossible to travel from Ghana to Benin in West Africa. The EAC region is ahead of all the other blocs in Africa towards achieving integration. A 2016 Africa Regional Integration Index – which measure progress on regional integration, ranked the EAC the number in Africa. On the Index, the EAC came first with a score of 0.540, followed by the Southern African Development Community (SADC) which scored 0.531, and ECOWAS...

The Trade, Industry and Cooperatives minister, Amelia Anne Kyambadde, has held a high level meeting with a senior World Bank official to secure support for various government initiatives to usher Uganda into middle income status. According to a statement from Uganda’s permanent mission in Switzerland, Kyambadde, and Annabel Gonzalez, a senior World Bank Group director for Global Practice on Trade and Competitiveness met on Tuesday on the sidelines of the Sixth Global Review of Aid for Trade in Geneva. The meeting was held at the request of the World Bank. Also at the meeting was Michael Wamai, Counsellor at the Permanent Mission of the Republic of Uganda in Geneva. Kyambadde briefed the World Bank official on Uganda’s priority areas of commercial and economic interest and called for support from the World Bank. She appealed for support on the establishment of a warehousing and logistics system. Kyambadde said: “There is a current need for 60 warehouses with a capacity of 5000-1000 Metric Tonnes; and two big silos to store produce so as to avoid instances of food insecurity.” “Furthermore, Government is also promoting value addition to all our products through supporting, and attracting foreign direct investment in the agro processing industries. “It is for this reason that Government had taken the strategic decision to impose a duty on the import of second hand clothes in order to grow the textile industry with the view to improving house hold incomes, eradicate poverty and generate employment for many of our youth,” she added....

The year 2016 had a number of shocking global economic events, notable among which was the British exit from the European Union famously termed as the Brexit. This development came from a shock referendum whose results defied the predictions of many professional pollsters. There are several economic issues that informed the majority decision. To the British, it is those economic issues that seem to have made the EU seem more of a baggage than a benefit to them. Given that the East African Community (EAC), is an economic bloc built along similar tenets like the EU economic bloc, one needs to ponder whether such economic issues exist and could, therefore, potentially affect the EAC. Only taking early lessons and any appropriate corrective measures by the EAC member states would avert a future EU-Brexit situation in another economic bloc such as the EAC. The most visible 'Brexit' impact on the EAC was the fall in the value of the Pound Sterling. The Pound was massively sold off, which resulted in a rough 7 per cent decline relative to the Ugandan Shilling. For example, around June 2016 before the vote, the Pound was selling averagely at Shs4,884 and a week after the referendum, it was selling at an average of Shs4,483. The positive effect of the decline in the value of the Pound was to reduce the cost of studying and travelling to the UK. However, it made imports in Britain from the EAC such as flower cuts, vegetables and coffee less...

Tanzanians lack the right skills to compete in the East African regional integration, a top government official said on Friday.In view of this, higher learning institutions need to come up with right curriculum that will build youths confidence as well as skills to be able to utilize numerous opportunities found in the EA bloc. Minister for Foreign Affairs and International Corporation Augustine Mahiga said this on Friday when launching reports on EAC boundless cross-border opportunities for business and trade. “The government intends to have its people benefit from this opportunities not only through trade but also investment and value addition of its goods,” he said. He said for the youth to be able to identify and grab the EAC common market opportunities, member state countries need to harmonize their university curriculum to have same goal of empowering the youth with the right skills. He noted that currently higher learning institutions were not producing youth with right skills and if the situation is not rectified, the country’s youth will loss the opportunity. He said President John Magufuli has recognized the EAC potential, and that was why he was aiming for an industrialized country to compete with its neighbors Kenya instead of continually depending on agriculture. In view of this he said that Tanzania was working towards eliminating all trade barriers to enable free movement of labor and capital. Before the launch, University of Dar es Salaam lecturer Haji Semboja said there is a mismatch of skills in the region and youths...

There has been a lot going on lately about the business climate in the region and the efforts necessary to locally make it more hospitable. Last week saw ministers from 26 African countries conclude a meeting in Kampala on Tripartite Free Trade Area (TFTA). Preceding this was the East African Manufacturing Business Summit in May in Kigali. The city also played host to the Common Market for Eastern and Southern Africa (COMESA) meeting last week to track implementation of the Airspace Integration Project. In the meantime, with an eye beyond the continent, the EAC Sectoral Council of Ministers of Trade, Industry, Finance and Investment were in Arusha last month where they adopted the terms of reference of a comprehensive cost-benefit analysis of the region’s trade with third parties. The first thing to note is that the TFTA brings together COMESA, EAC, and the Southern Africa Development Community (SADC). The other thing to note is the signing on of South Africa to be part of TFTA, which added the country’s heft to the free trade area’s viability. No matter that only Egypt has ratified it, with a minimum of 14 countries required to ratify the TFTA for it to become operational. The joining of South Africa, with Mauritius and Botswana expected to sign on in short order, means that the long held dream of Africa being able to trade with itself has taken another important step towards a Continental Free Trade Area. However, to this, the recent East African Business Council...

East African states once again missed the middle-income economy status by the end of June milestone, with per capita income of between $3,956 and $12,235. Data released by the World Bank recently shows that Kenya is the only country in the region that got close to becoming an upper middle-income economy. Its economy was rebased two years ago, branding it a lower middle-income country. Tanzania, Somalia, South Sudan, Uganda, Rwanda Burundi and Ethiopia are still classified as low-income, with gross national per capita incomes of below $1,045. Kenya has been ranked as a lower middle income economy with per capital of between $1,006 to $3,955, in the same category with Congo, Nigeria, Sudan and Egypt. Angola is one of eight countries in the world and the only African country that has moved from upper middle-income to a lower-middle income. Angola’s drop is a reflection of the structural economic shocks the country has faced as a result of the decreased oil prices and commodity prices in general. Individual governments in East Africa have been struggling to meet key growth targets under their long-term development blueprints in efforts to achieve middle income economy status. Kenya has Vision 2030, Uganda has formulated Vision 2040, Tanzania Vision 2025, Burundi Vision 2025 and Rwanda has Vision 2020, but there are plans to align all of them to the EAC’s Vision 2050. Though East African governments have laid down elaborate visions for their countries, the pace of execution remains largely unco-ordinated and execution has been relatively...

Rwanda, Tanzania and Uganda say their stance to phase-out used clothes imports should not result in their ejection from the US preferential trade programme. Senior officials from the three East African Community (EAC) countries, in Washington Thursday, opposed the move by a US trade lobby to restrict their eligibility status for the African Growth and Opportunity Act (Agoa). The Secondary Materials and Recycled Textiles Association (Smart) filed a petition with US trade authorities in March urging that the three countries, along with EAC member Kenya, be deemed ineligible for Agoa's allowance of duty-free textile and apparel exports to the US market. Lawrence Bogard, Smart's lawyer, said during Thursday's US government inquiry that the association's member companies would suffer major losses in jobs and revenues if the EAC ban on used-clothing imports is fully implemented. Partial loss Mr Bogard also argued that Kenya should be included among the EAC countries facing partial loss of their Agoa benefits. Top US trade agency had announced last month that Kenya would be spared review of its Agoa eligibility. The decision was said to be based on “recent actions Kenya has taken, including reversing tariff increases, effective July 1, 2017, and committing not to ban imports of used clothing through policy measures that are more trade-restrictive than necessary to protect human health.” But the Smart lawyer argued that Kenya ought to be included in the Agoa eligibility review until Nairobi clarifies its commitments. Smart specifically seeks confirmation that Kenya's reported imposition of minimum tariffs on containers...

Tanzania, Uganda and Rwanda are defending their decision to raise tariffs on imported secondhand clothes, saying it is based on current value, trade realignment and that —for Rwanda— it’s a one-off. The three countries are reacting to calls by a US business association to restrict their eligibility for the Africa Growth and Opportunity Act (Agoa). Together with the East African Community Secretariat, they have written to the panel of the out-of-cycle review, comprised of representatives of six US government agencies: the Departments of Commerce, Labour, Treasury and State, as well as the US Agency for International Development and the Office of the US Trade Representative. The review could decide if the three countries should lose some of the benefits of Agoa. Tanzania and Uganda, in their submissions, insisted that the doubling of levies on imports of used clothing, from $0.20 to $0.40 per kilogramme, was for realignments with the current value. Tanzania’s Trade Permanent Secretary Adolf Mkenda said increase or decrease of tax, duties and fees is a fiscal decision, which is implemented as part of annual fiscal measures. Tanzania also argued that the EAC decision to phase out importation of secondhand clothing and leather is yet to be implemented, meaning claims about loss of jobs by the Secondary Materials and Recycled Textiles Association (Smart) cannot be justified. “There is no scientific proof that changes in the trade pattern and other macroeconomic variables, including jobs and shipping were caused by the EAC decision as pointed out in the petition and...

Plans to extend the standard gauge railway (SGR) from Naivasha to Kisumu have started taking shape after the State submitted an environmental impact assessment report. The Kenya Railways Corporation (KRC) is seeking approval for the project that will cost about Sh370 billion ($3.59 billion), funded by the Exim Bank of China. The 255km-line is the third phase of the SGR, that is set to push the total cost of President Uhuru Kenyatta’s administration pet project to Sh847 billion. “The proponent Kenya Railways Corporation is proposing to construct a 255 km SGR track between Naivasha and the proposed Kisumu Port,” an audit submitted to the National Environment Management Authority (Nema) reads. “This project is phase 2B of the ongoing SGR construction and will cut through four counties, namely Narok, Bomet, Kericho and Kisumu.” Even though the SGR is targeted to be built up to the border town of Malaba, experts say linking Kisumu port to Mombasa is seen as an early landmark as it will allow cargo to be transported over lake Victoria to other East African states, making the SGR a more viable economic project. For decades, Kisumu port registered robust business activity helped by a reliable railway system and maritime vessels that ferried cargo to ports such as Mwanza and Bukoba in Tanzania and Jinja and Port Bell in Uganda. Lake port Construction of a lake port is planned on the shores of Lake Victoria in Usare village, boosting trade with Kenya’s regional neighbours via Uganda’s Port Bell, Tanzania’s Mwanza Port...

State minister for Transport Aggrey Bagiire, last week on Thursday asked his Tanzanian counterpart to harmonise the preferential treatment his country offers to transit goods as a way of encouraging the use of the Central Corridor, Uganda’s alternative access to the sea. Mr Bagiire, while signing a Memorandum of Understanding (MoU) on reviving inland transport on Lake Victoria and development of a railway as part of the Central Corridor, to implore Tanzania to reduce the high road user charges. Currently, trucks from Uganda are charged $500 (Shs1.7m) each yet Uganda charges only $40 (Shs140,000) per truck from Tanzania. The exorbitant cargo transit fees, Mr Bagiire said, were discouraging the use of the port of Dar ss Salaam by Ugandan traders since it increases the cost of transportation. According to a statement issued by the Ministry of Foreign Affairs, which coordinated signing of the MoU, Mr Bagiire asked Tanzania to “consider revising the rates downwards” to attract more traders to use the route. Dar es Salaam is Tanzania’s principal port with a rated capacity of 4.1 million down weight tonnage (dwt) dry cargo and six million dwt bulk liquid cargo. Mr Bagiire signed the MoU on behalf of Uganda while Prof Makame Mbarawa, the Transport minister, signed on behalf of Tanzania in Dar-es-Salaam. The signing was witnessed by the Charge D’Affairs at Uganda High Commission in Dar-es-Salaam, Oscar Edule, Uganda Railways Corporation (URC) managing director Charles Kateba, and other officials from the two countries. The MoU also reinforces proposed plans by...