In mid-June, as Kenya battled maize scarcity and related production costs, the Tanzanian government asked its grain traders to get an export permit before shipping maize out. Though an unpopular decision, as it cut supplies to Kenyan grain millers and other East African countries who had ordered stocks from Tanzania, the policy helped Tanzania to keep inflation in check, exposing the rest of the region to expensive food. In Kenya, the policy partly helped to drive the price of a two-kilogramme packet of maize flour to an unprecedented high of Sh200. Even before the dust settled, towards the end of June, Tanzania increased the export permit costs by 93 percent. In this directive, Dar es Salaam authorities increased the cost of acquiring export permits from the previous Sh27,000 per truck to Sh52,000. This meant that Tanzanian traders had to increase prices of their commodities, a scenario that discouraged export trade. These, among other policy interventions, have seen Tanzania shield itself from the wave of sharp rises in inflation sweeping across the region. Official data reveals that Tanzania had the lowest inflation rate in the region by the end of August at 4.6 percent. It was followed by South Sudan which recorded a 6.4 percent rate while the Democratic Republic of the Congo (DRC), the newest member of the East African Community (EAC) came third at eight percent. Kenya posted a 62-month high of 8.5 percent inflation in August, which rose to 9.2 percent in September, as the region races to...

External investors looking for merger and acquisition deals in East Africa are facing challenges when conducting due diligence and valuing potential targets due to low-quality financial data, potentially costing the region valuable foreign direct investment inflows. Advisory firm Deloitte says in a macroeconomic outlook publication that underdeveloped target companies — in terms of revenue and profitability—are also forcing investors into a narrow band of sectors such as energy, fast-moving consumer goods and financial services, and leaving other small businesses facing a capital drought. Private equity, venture capital funds and development finance institutions (DFIs) have over the years expressed concerns about asset quality and valuation of local businesses, pointing out the possibility of overpaying for low-quality investments. When conducting due diligence on potential acquisition targets or merger partners, companies analyse historical performance and also evaluate the operating environment to project future performance. Failure to do proper analysis can, therefore, leave a buyer staring at considerable losses should the financial projections of the acquired asset fail to match actual performance. “Key challenges experienced in due diligence comprise tight deadlines, inadequacy in the skills in the finance function and low quality of financial information. Inadequate due diligence presents the risk of mis-assessment of the going concern of the target, resulting in an uninformed merger or acquisition,” said Deloitte in its East Africa Macroeconomic Outlook report. “Most investors looking to deploy capital in the East African region have (also) expressed concerns about the quality of assets, the reasonableness of their valuation asking prices and...

Dan Howdle, a consumer telecoms analyst at www.cable.co.uk, writing for www.visual.capitalist noted that Tanzania leads in comparable quality and lower internet costs. The reports drawn up last month were quoted by networks like www.allafrica.com, underlining the reliability of the comparative data for internet pricing and quality. The analyst said Tanzania has the cheapest internet price in East Africa, while Somalia is no longer offering the most affordable mobile internet in Africa, moving to third. Sudan and Algeria take the first and second places respectively in the cheapest data placing for the continent, he said. “In Sudan, the cost of mobile internet is $0.27, the cheapest in Africa and fifth in the world. Algeria is second at $0.51 and Somalia is third at $0.60. Tanzania has the cheapest data in East Africa at $0.75 for every gigabyte of data,” the study specified. The Cable.UK data stretching from December 8, 2020 to February 25, 2021 shows that Rwanda follows Tanzania at $1.25 per gigabyte, Uganda ($1.56) and Burundi ($2.10) while Kenya, which was second in East Africa last year charging $1.04, had reviewed its charges to $2.25 per gigabyte, it elaborated. Many countries with cheap data have excellent mobile and fixed broadband infrastructure, enabling service providers to offer large amounts of data, and bring down price per gigabyte, it further noted. Local observers said that the report comes in a situation where some EAC media outlets see Tanzania and the Democratic Republic of Congo as having low quality and high prices for data services, which is...

With more investment in internet infrastructure and technological innovation, Rwanda could benefit more from increased trade in services, asserts the World Bank. This was stipulated in the latest World Bank report on Rwanda’s economic update released on September 23. It was dubbed “Boosting exports through technology, innovation and trade in Services.” Rwanda aspires to become a knowledge-based and services-led economy through diversification of its export base into distribution and logistics services, tourism, business travel and financial services, as part of the National Strategy for Transformation. These service activities offer significant employment opportunities for both relatively unskilled and more skilled workers in different sectors. Calvin Djiofack, World Bank Country Economist, noted that Rwanda should invest more in strengthening the link between e-commerce and exports as it is not fully exploited by local firms which lack information regarding foreign markets. “Investment in internet infrastructure can provide isolated enterprises, such as those in rural and underdeveloped urban areas, low-cost connectivity to markets and customers, and increase local firms’ participation in international trade,” he added. The report emphasises that enhanced digitisation could also foster digitally-enabled services to facilitate cross-border trade, support backward and forward linkages to agriculture, mining, and manufacturing. This call finds Rwanda on a journey of significant strides made over the last couple of years in improving ICT infrastructure to drive productivity of the entire economy, reduce transaction costs and inefficiencies in the use of capital and labour, data shows. In 2019, data from the Ministry of Trade and Industry (Minicom) indicate...

Agriculture in Tanzania is the backbone of the nation’s economy. Government reports show that the sector employs over 65 per cent of Tanzanians and contributes 27 per cent to the Gross Domestic Product (GDP). This is substantiated across borders as Tanzania anticipates constructing giant grain storage facilities and distribution centres across East Africa. This scenario signals that the sector’s surplus which is gaining traction across markets serves to firm up Tanzania’s ambition to expand its grain exportation. Tanzania strategically realizes its wheat production plan, which sees to increase yield by million tonnes comes 2025 Kenya, Uganda and Burundi are some of the major Tanzania grain consumers across the East African Community. Tanzania’s rice has managed to expand heights of exportation and penetrated Belgium Today Tanzania’s farming aspirations have never been sharper. This year, the government has made a statement about the need to make agriculture a new economic horizon via the newly launched agriculture plan to transform the sector completely. This commitment shows how serious Tanzania is in making an industry statement. The current government is making investment and industrialization a priority. The President, Samia Suluhu Hassan, has outlined her plan to transform the agriculture sector. Tanzania farmlands are known best for producing both cash and food crops consumed locally and for the export market. Tanzanian farmers grow maize, sorghum, rice, cotton, cashew nuts, tobacco, tea and sisal, to mention a few. Regarding comprehending the trend of producing demanded grains, Tanzania is at a very competitive stance which stands to...

This is part of UNBSs US$4.5m decentralisation project where it has set up 3 laboratories in Mbale, Gulu and Mbarara Mbale, 29th Sept 2022: The Uganda National Bureau of Standards (UNBS) Mbale Regional Laboratory was officially launched today by Minister of Trade, Industry and Co-operatives Hon. Francis Mwebesa in a colourful ceremony in Mbale, Eastern Uganda. The minister was accompanied by Danish Deputy Ambassador to Uganda H.E. Henrik Jespersen, UNBS Executive Director David Livingstone Ebiru, TradeMark Africa (TradeMark) East Africa Regional Director John Ulanga among other senior leaders. The Mbale Laboratory is part of three regional laboratories that UNBS has set up outside of the capital in an effort to decentralise its services and make them more accessible to traders. Two other laboratories have been set up in Gulu Northern Uganda launched in July and Mbarara Regional Laboratory scheduled for launch, end of this year. The total cost has been US$ 4.45 million funded by the Government of Denmark through TradeMark Africa. The scope included provision of equipment and consumables for the three regional laboratories as part of decentralisation strategy by UNBS. Speaking during the launch minister Mwebesa said the Mbale Regional Laboratories will enable local businesses in Eastern Uganda to understand and apply standards thus easily accessing markets within Uganda and across borders. “Quality standards are critical in supporting the governments’ industrialization agenda, the Buy Uganda Build Uganda (BUBU) Policy, Imports Substitution, and Exports Promotion Strategies.” noted the Minister. The Mbale Laboratory is expected to benefit among other value...

To mark an ongoing partnership, the Tanzania Bureau of Standards (TBS) and TradeMark Africa (TMA) have today signed a financing agreement worth TZS 9 billion aimed at strengthening frameworks that guide development, enforcement, and implementation of standards, quality management systems, laboratory testing capacity and accreditation. This agreement brings a total support by TMA to TBS at TZS 15.8 billion as TZS 6.8 billion has been invested under phase I to support development of training programme on standards, development of integrated Standards, Quality, Metrology and Testing (iSQMT) and development of National Quality Policy Framework. This ongoing support to TBS aims to increase efficiency at how standards are developed and implemented, and also ensure that the developed standards are enabling trade. The support is by development agencies of the United Kingdom, Ireland and Norway through TMA. Present at the signing ceremony was Dr. Athuman Y. Ngenya, Director General of TBS and Ms. Monica Hangi, TMA Tanzania Country Director. The second phase of TMA’s support to TBS, that commenced in 2021/22, sets to promote improvement of service delivery through: increased Micro, Small, Medium Enterprises awareness and compliance to Standards and Sanitary and Phytosanitary (SPS) Measures; development and implementation of standardization and accreditation frameworks; improved quality infrastructure platforms; and implementation of National Quality Policy. In her statement during the signing ceremony Ms. Monica Hangi said ‘’Businesses in Tanzania still face challenges in complying to Standards and SPS measures, largely due to low awareness and high compliance costs, limiting their potential in exploiting regional and...

The African Continental Free Trade Area (AfCFTA) is building a fund and drafting a protocol to ensure participation of more women and youth in trade. This week, AfCFTA Secretary General Wamkele Mene said the fund, created through the Afreximbank and known as the AfCFTA Adjustment Facility, will be used to cushion countries from short-term revenue losses once they lift tariff barriers for cross-border trade. The tariffs, which include licences, permit fees and taxes, have been cited among the challenges limiting free trade, and the participation of women and youth. This is besides access to credit, market information and infrastructure. Some $1 billion has already been raised towards the facility: AfCFTA says the target is between $7 billion and $10 billion, reflecting just how important lifting the protectionist policies will be for trade to thrive. “Young Africans are at the cutting edge of technological advancements. We will be making a catastrophic mistake if we don’t include these important segments of our society in the implementation of this agreement,” Mr Mene said. The facility will be boosted by the African Trade Gateway, a digital platform “that will provide market and due diligence information about your counterparts, including the rules of origin, Customs procedures, as well as payments transfers platform”, he added. The AfCFTA is supposed to harmonise policies, seeing that 70 percent of informal trade in Africa is carried out by women. Mr Mene said small and medium enterprises by women contribute 60 percent of Africa’s GDP, creating 450 million jobs. The...

New figures from Kenya's National Bureau of Statistics show the United States has overtaken Uganda as the largest buyer of Kenyan goods. The numbers from Kenya's National Bureau of Statistics show that between January and June 2022, Kenya's exports to the United States totaled Ksh.38.8 billion — the equivalent of about $321 million. Uganda's imports from Kenya dipped to about $300 million (approx. Ksh.36.2 billion). According to the report, the jump was caused mainly by increased sales of Kenyan clothing apparel to the U.S. Economists such as Ken Gichinga say the figures are a sign of Kenya’s deepening bilateral relationship with the U.S., including increased direct flights to New York. "Americans have a bigger purchasing power for products in Kenya," Gichinga said. "You find that American investors will find it a very good time to be able to purchase assets and buy things in Kenya because now, the market is in their favor." Uganda has been the biggest buyer of Kenyan exports for over a decade. But a Kenyan publication, Business Daily, reports that Uganda's imports from Kenya have dropped as investors set up Ugandan factories to manufacture goods previously imported from Kenya, such as edible oils and cement. Wangari Muikia, a Kenyan economist, said the country's strong relations with the U.S., backed by the Africa Growth and Opportunity Act (AGOA), will likely continue to thrive as the new government of President William Ruto is keen on more American partnerships. In his visit to the United Nations General Assembly this week,...

Kenya has shipped its first consignment of locally made batteries to Ghana, two months after it was picked among seven countries to pilot the continental free trade area that seeks to unlock the movement of goods and services in Africa. The Kenyan-made Exide batteries worth Sh9.24 million ($77,000) landed in Ghana last week, marking a formal start of preferential trading under the Africa Continental Free Trade Area (AfCFTA) framework. The consignment by Associated Battery Manufacturing EA Ltd is the clearest indication that Kenya can now access markets in West and Central Africa at preferential rates. Kenya was picked alongside six other nations to champion the trial phase of the framework designed to reduce tariffs on goods and services as well as eliminate barriers on movement among African countries. “Associated Battery Manufacturing EA Ltd is the first Kenyan company to start trading under AfCFTA, and the first local company to ever export exide batteries to the Ghanian market” said the Ministry of Industrialisation and Trade in a statement. No trading had occurred since January last year when the AfCFTA was launched as the select countries needed first to identify products that could access the markets. The delays have been linked to problems regarding rules of origin that remained unresolved, making it difficult to identify products that could enjoy the preferential tariff regime under the agreement. Other countries selected to participate in the pilot phase of the AfCFTA Initiative on Guided Trade are Tanzania, Tunisia, Cameroon, Egypt, Mauritius, and Ghana. The pilot...