Kampala — If all undertakings made by the Tanzanian authorities are fulfilled, Ugandan traders may sooner than later see reason to exploit the second door to import and export their goods through the Dar es Salaam (Central-Corridor) again. The Mombasa - Kampala route has always been preferred as the first door. Dar es Salaam Port 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. The port serves the landlocked countries of Malawi, Zambia, DR Congo, Burundi, Rwanda and Uganda. Over a decade ago the Dar es Salaam - Kampala, popularly known as the Central Corridor, used to be the other option for Ugandan traders to do international trade. Ugandan traders are now swarming at Mombasa Port as a seaport of choice. On average Uganda's goods transiting through the Northern Corridor (Mombasa - Kampala) is about 5.9 million tonnes per day. While meeting a delegation of Ugandan traders at the sidelines of President Yoweri Museveni's visit to East Africa's second largest economy at the end of February, Mr Deusdedit Kakoko, the Tanzania Ports Authority (TPA) director general, said: "Previously, at least 30 per cent of the Ugandan cargo used to be freight through Dar es Salaam Port. It has dropped to a per cent that is lower than 2 per cent." Reason for decline Industry observers say the Central Corridor has been plagued with a number of complaints ranging from delayed service, inefficiency, loss of cargo...

President Donald Trump spoke on Tuesday with President Uhuru Kenyatta, with the White House saying that the US leader sought to "reaffirm the strong bilateral relationship between our two countries." The telephone conversation also focused on "economic partnership and mutual dedication to overcoming terrorism and other regional security challenges through close cooperation," a statement from White House added. CALL LIST "President Trump expressed appreciation for Kenya's significant contributions to the African Union Mission in Somalia and recognized Kenyan troops' sacrifices in the fight against Al-Shabaab," the statement said. Mr Trump spoke last month with the presidents of Nigeria and South Africa. Those choices as the US president's first direct contact with sub-Saharan leaders caused a well-placed source in Washington to suggest at the time that "a failure of Kenyan diplomacy" accounted for Mr Trump's omission of Mr Kenyatta from his initial Africa call list. "Nigeria and South Africa have been working this for some time," said the source who is knowledgeable about the Trump administration's efforts to formulate Africa policy. "They've been in contact." "Kenya hasn't done that," the source added. Tuesday's phone call puts paid to suggestions that Mr Trump values Kenya less than other regional powers in Africa. It also confirms the assertion last month by Kenya's Deputy Chief of Mission to Washington David Gacheru that "a telephone conversation between President Kenyatta and President Trump is already in the works and should be taking place within a short time frame." Tuesday's discussion also touched on "ways to boost...

The East African Community’s (EAC) push towards establish a common market is under jeopardy as partners states continue to impose restrictive trade terms. This has seen the value of trade diminish in the last three  years, with the Kenyan government raising concern over introduction of protectionist laws that threaten full market integration. East African Community and Labor Cabinet Secretary, Phyllis Kandie said on Tuesday the latest trend is denying the business community prospect of an enlarged EAC market. She made the remarks during the launch of the East African Community scorecard whose aim is to facilitate implementation of the provisions of the Common Market while at the same time identifying obstacles and recommending interventions to mitigate barriers to the implementation processes. The EAC common market protocol has been in place since 2010 with the aim of deepening regional trade. However, the five member states have appeared to read from different scripts in the recent past casting doubts over the strength of regional unity. Trade within the EAC, Ms Kandie said, had been on a steady decline from Sh593.6 billion in 2013 to Sh522 billion as of 2015. The East African community secretariat has launched a common market integration scorecard aimed at identifying areas holding back creation of a strong regional market. The World Bank’s Trade and Competitiveness Manager for East Africa Catherine Masinde said the emergence of new restrictive measures in free movement of goods, capital and people, contradict earlier progress and erasing earlier gains already recorded. “Attracting investment requires...

Throughout the developing world, port concessions have been plagued by rumours of corrupt dealings and allegations of high-level rent-seeking. The most dramatic of them all was the case where the Djibouti Government filed an arbitration case in London against international port concession operator Dubai Port World (DP World), alleging that it bribed a top public official to secure the concession to run the largest container terminal in that country, Dolareh. Although, Djibouti lost, the case revealed sensational insights into dealings between corrupt elites and global concession o perators. In Senegal, the Justice ministry was reported to be investigating Karim Wade, former minister and son of the ex-president, on corruption related to the concession at the port of Dakar. I recently also came across a story about how a major scandal had erupted in Guetemala over a port concession involving another global operator. A port is a very critical piece of infrastructure and national asset. Here in Kenya, 30 per cent of national government revenues come from Customs duties. But even more critical, ports are the means by which contraband, ranging from drugs to ivory, escapes to the rest of the world. Thus, when you are giving out a port built with public money to a private party to run for you, security and the integrity of the private operator must be paramount. In retrospect, I think we did not do a very good job at screening owners for integrity when we introduced container freight stations. Which brings me back to...

Some 150 more cargo wagons have been delivered for the Standard Gauge Railway (SGR) line at the Port of Mombasa. The flat wagons will be used for freight transportation once the SGR starts operation. This is the second batch of wagons delivered under the SGR line development in Kenya following delivery of 60 open wagons last month. The 25-tonne axle flat wagons are suited for operations on the 1435mm SGR line; could carry a payload of 70 tonnes and are designed to run at 120 km/hr. Kenya Railways Managing Director Atanas Maina received the wagons at the port of Mombasa. He said the wagons will be used to ferry all types of containers — large-size cargo including steel, automobiles, tractors and box-cargo. “The demand for transportation in the country today exceeds the capacity of the roads and the existing railway line. These flat wagons will provide a working solution for transportation of freight in the country and will go a long way in decongesting the Port of Mombasa. “Once we commence operations, railway transport will increase its market share of the total freight and cargo transport in the country,” Mr Maina said. Three types of wagons have been ordered for operations on the SGR line: Open-top wagons, Covered wagons and flat wagons. Operations on the SGR line will engineer a significant shift of freight transported from road to rail. Freight trains on the SGR line are able to haul 4,000 tonnes per trip and 22 million tonnes per annum. These...

The East African Legislative Assembly (Eala) sits in Rwanda this week for its second meeting this year. The meeting started yesterday in Kigali and comes barely a month after the one held in Kampala, Uganda. It is worth noting that the Kigali sessions have coincided with the release of the East African Common Market Scorecard 2016. The document, whose findings representatives to the regional body are likely to find troubling, was released in Dar es Salaam last Wednesday. It paints a worrying picture of the commitment of the governments of Tanzania, Uganda, Kenya, Rwanda and Burundi in moving the key protocol forward. It is important to note that the report is a review of the progress made so far in entrenching the Common Market agreement, a year after it came into effect. Findings show that the EAC is still synonymous with trade restrictions. All countries are said to be dragging their feet in meeting agreements in the free movement of goods, services, people and capital. Even more worrying is the fact that Tanzania and Kenya, the two leading economies, were found to have introduced new barriers to trade, reversing significant progress that helped move the countries forward towards becoming a truly integrated market of more than 120 million people. These countries still treat people from elsewhere within the bloc as foreigners, while some bar residents from investing in capital markets within their jurisdiction. Regional investors seeking to open shop in either of the markets have found restrictions and hurdles that...

To develop effective trade patterns, Africa must embrace structural and regulatory reforms and enhance financial integration to accelerate efforts that have led to increased exchanges with emerging countries in the rest of the world and between its own countries and regions. African countries must foster macro-economic stability and improve the investment environment to strengthen the role of pan-African banks in facilitating trade finance and boosting capital markets. Success in stimulating trade and growth depends on the policy and investment climate, depth of financial integration and commitment to reform. Africa’s trade with the rest of the world has remained high, except with the United States. From 2000 to 2008, Africa’s trade increased by an annual average of 16%. Because of the 2008-9 global financial crisis, trade fell sharply by 24% from that period. Since 2010, Africa’s exports have recovered, growing by an annual average of 8,5%. Trade with the United States has persistently declined, however. In 2015, trade with the United States fell to $70,5 billion from a peak of $ 124,6 billion in 2011, an 11% decline. Historically, oil, gas and petroleum products have dominated US imports from sub-Saharan Africa. In 2007, these accounted for 93% of US imports. By 2013 the figure had declined to 67% as the United States stepped up its campaign for energy self-sufficiency and increased production of domestically produced oil to avoid imports. Africa’s exports to emerging economies are dominated by China and mainly comprise oil, metals and other primary products. This exposes the continent...

The East African Community has developed a new scorecard to monitor progress and address challenges facing integration of the five-nation bloc. Launched on Monday, the EAC Common Market Scorecard 2016 will focus on the progress made towards the implementation of free movement of goods, capital and services, and identifies a number of barriers to intra-regional trade. It further recommends a raft of measures for individual partner states meant to promote regional prosperity. This is likely to boost the seven year-old East Africa Common Market under the EAC Treaty, whose implementation has been slowed down by noncommittal member states and non-tariff barriers. The World Bank and Trade Mark East Africa supported initiative follows up on the first scorecard developed in 2014. It focuses on monitoring and stimulating implementation of the freedoms and rights enshrined in the EAC Common Market Protocol. They include free movement of goods, persons and Labour. It also paves the way for the right of establishment, residence, free movement of services and free movement of capital. East African Community and Labour Cabinet Secretary Phyllis Kandie expressed concern over the steady decline in intra EAC trade, whose value dropped to $5.1 billion (Sh523.5billion) in 2015, from $5.6 billion (Sh574.8 billion) in 2014 and $5.8 billion (Sh595.4billion) in 2013. She attributed the decline to “weak capacity within individual EAC partner states to resolve most of the non tariff barriers”. Kenya’s EAC Integration Principal Secretary Betty Maina called for renewed efforts in promoting intra-EAC trade. The region has a market of...

Uncertainty hangs over plans to build a cross-border standard gauge railway (SGR) after Beijing failed to respond to a request for a joint meeting with Kenyan and Ugandan officials. The two states had requested for a meeting in China on February 28, with Kenya’s Ministry of Foreign Affairs sending reminders mid last month, but Beijing went mute. As a condition for funding the Kenya-Uganda SGR, Exim Bank of China requires a joint commitment from the two states that each will extend their line to the Malaba border post. China’s delay to respond to a request for a joint meeting is likely to interfere with official timeline for the Kisumu-Malaba-Kampala SGR. Officials from Kenya’s ministries of Finance and Works, and Uganda’s Finance minister Matia Kasaija had been scheduled to travel for a meeting on February 27, but they postponed after China failed to give them a confirmation. “China has not responded to the request that the joint delegation of Kenya and Uganda made to them in regard to having a meeting with the Exim Bank on February 28,” said a source close to the matter. “Exim Bank of China, which is the financier of the project for both countries, had committed to extending credit to Uganda on condition that Kenya is ready to extend its section of the railway to Malaba and this is the commitment that they were to make in Beijing,” the source added. Mr Kasaija confirmed that they did not travel to China because they were yet to...

It started off in December as an unexpected question from a stranger. I had just made a brief stopover at Nyamasaria in the outskirts of Kisumu town when a man waylaid me. “Where do you offload next? Well, being a rural area, ignoring people just because they don’t look familiar is out of question. So the man’s intrusive question became a natural talking point the moment I crossed into a makeshift eatery in the area. And true to village wisdom, I was in a school of sorts, listening to strange tales and gathering story leads. First, the man had a perfect sense of what he was talking about, only that he had mistaken me for a truck driver after I parked at the wrong place. Two, he could be hinting that some truck drivers offload untaxed imports at undesignated places from where ‘trusted agents” collected them. Because nearly every speaker seemed to have just a fleeting sense of the subject matter, I would still have brushed them off as heresies had it been for news heard previously. There were reports early last year that cars bearing Uganda registration numbers were being seized in western Kenya by police and customs officials. The agencies never quite made public what they gathered during the crackdown launched early last year. However, if cars in question were imports, as local dealers thought, then somebody apparently diverted them in the fashion suggested by the stranger in Kisumu. Claims of sugar, rice or cement destined for landlocked...