Preparations for the arrival of the Standard Gauge Railway (SGR) locomotives at the Mombasa Port are in high gear. Kenya Ports Authority (KPA) has started modernising the Embakasi Inland Container Depot in readiness for arrival of the first batch of the locomotives ahead of the project’s commissioning. The project’s contractor, China Road and Bridges Corporation (CRBC), has laid out a temporary SGR rail track alongside berth 11 at the port where the ship loaded with the SGR locomotives – MV Kota Bistari – is expected to offload its cargo today. The temporary rail track will be used to shunt out the new locomotives out of the port and into kilometre zero section outside the facility where the SGR line starts. Kenya Railways Corporation is developing a new SGR line for passengers and cargo transportation between Mombasa and Nairobi. Speaking at the port yesterday during the offloading of eight rubber-tyred gantry cranes imported from China, KPA Principal Corporate Communications officer Haji Masemo said the equipment will come in handy as the depot gets busier. “We are anticipating an increase in handling of cargo at the Embakasi depot once SGR trains start full operations by mid this year, hence the upgrade of the facility,’’ he said. Mr Masemo said the depo used to handle 180,000 TEUs (Twenty Equivalent Foot) units, but with the coming into operations of SGR, the figure is likely to rise to 450,000 TEUs. The rubber-tyred gantry cranes were brought in as complete knock-down components and are to be...

Kenya’s exports to Uganda declined by 20 per cent in the first 10 months of 2016 in a worrying trend that has seen the country lose out in other key markets. Latest data from the Kenya National Bureau of Statistics (KNBS), besides drop in exports to Rwanda and the United Kingdom, showed exports to Uganda dipped from Sh52.2 billion last year to Sh41.8 billion in the 10 months to October. Uganda is Kenya’s biggest export market and a drop should worry policy makers at a time when the East African market has been flooded by cheaper imports from China. The KNBS report, however, does not explain why there was this decline but previous reports by the World Bank and other agencies have suggested that Kenya could lose its Ugandan market to Chinese goods since they are similar in nature. “Exports to Tanzania and Uganda are quite similar to China’s, compared to both countries’ exports to the United States or the UK. The greater overlap in East Africa suggests that Chinese goods will likely displace Kenyan exports,” a recent World Bank report read in part. Kenya mostly exports food, beverages and small industrial products to Uganda. In addition the country is major route for Uganda’s fuel exports since it is landlocked. But Kenya is fighting to keep its leadership as the preferred route for importation of petroleum products for other East African Community (EAC) members, due to concerns of adulteration. Rwanda prefers to use Tanzania, which it claims has cleaner fuel...

2016 has been rated, by several commentators, as one of the “most successful years” in Rwanda’s history, as far as socio-economic development of the country is concerned. A lot of infrastructure deals were signed while other mega projects were launched and/or inaugurated. Economist Andrew Mold, the acting director of United Nations Economic Commission for Africa (UNECA) sub-Regional office for Eastern Africa told the Sunday Times that Rwanda’s economy had a “very good performance” in 2016, and it is no doubt that infrastructure played a key role in the estimated 6.0 percent growth rate—which is 4 times faster than the regional average, if the IMF standard is anything to go by. Trademark East Africa country director Patience Mutesi, says that: “These projects are central to opening up the Rwandan economy in order to attain the targets set for transformation of the economy However, she added that, “the challenge now is to ensure that there is sufficient demand for the structures in order to make the investments made sustainable.” Here is a wrap up of at least 7 major Infrastructure milestones and how they intend to impact the country’s economy going forward. Kigali Convention Center and Radisson Blu hotel After years when Rwanda’s major state of the art convention center seemed like it would never be pulled off, this year it was finally completed and inaugurated. Speaking at the inauguration ceremony of the complex in July, President Paul Kagame acknowledged that although the project had encountered multiple failures, the ‘Rwandan spirit of perseverance’ had led to success. Kigali Convention...

The manufacturing sector recorded a slow growth in 2016 as industries struggled to cope in a tough business environment characterised by massive layoffs and closure of some businesses, the Kenya Association of Manufacturers has said. KAM has noted companies continue to grapple with high cost of energy at Sh11 per kilowatt hour, compared to Ethiopia, where factories are enjoying lower tariffs of between four and five cents per kilowatt hour. Threats from illicit trade are also a major concern for manufacturers as the year comes to an end. It is estimated that Kenyan manufacturers are losing at least 40 per cent of their market share to counterfeiters, KAM CEO Phyllis Wakiaga said, which has “unfairly” reduced the industry’s earnings. This, coupled with frequent power outages, congested industrial zones, high labour input costs, increasing overall production costs and a huge import bill are denying the manufacturing sector an opportunity to thrive, the association pointed out. “We currently have a structure that supports imports and not local manufacturing where finished products and raw materials attract the same Value Added Tax rates. Corruption is also hindering the industry’s growth,” Wakiaga said. She said the harsh environment is to blame for the closure of industries, the most recent one being tyre manufacturer Sameer Africa, which announced it would shut down its Mombasa road manufacturing plant on September 30. The company’s managing director Allan Walmsley blamed the closure on competition from cheap and subsidised tyre imports mainly from China that enter the Kenyan market. “The...

Economists predict a gloomy year ahead as the private sec-tor continues to shrink due to austerity measures by President John Magufuli’s government, which is keen on procuring goods and services locally. Prof Honest Ngowi, an econo-mist at Mzumbe University, says Tanzanians should expect high tax rates, increased nuisance tax and declining lending by banks.The government has already barred its institutions from de-positing their funds in commer-cial banks, with Tsh500 billion ($231.5 million) already with-drawn from 54 banks and depos-ited in the central bank. Prof Ngowi told The EastAfri-can that the current cash crunch will continue to bite.“The government is the big-gest buyer of goods and services, and the directive to trade locally will continue to bite as long as it stands,” he said. Recently, the Magufuli admin-istration issued a directive to all central government and local government authorities, public institutions and statutory corpo-rations to engage in government-to-government business dealings, a move analysts say could nega-tively affect private sector com-panies. According to guidelines for the preparation of the government budget for the year 2017/18, is-sued by the Ministry of Finance and Planning, accounting officers of all public entities are to stop buying goods and services from private firms and instead deal with state-owned enterprises. Prof Ngowi cited poor rains, which will hurt food security and accessibility of energy as hydro-power generation dams are likely to experience a decline in water levels — as another danger sign.“The weatherman’s warn-ing on low rains next year is of concern because it will not only...

The Ngong tunnel on the Nairobi-Naivasha standard gauge railway. Large infrastructure projects have resulted in weak domestic savings. FILE PHOTO | SALATON NJAU |   NATION MEDIA GROUP IN SUMMARY Although government data has painted a rosy picture of the economic performance over the  nine months to September 2016,  the International Monetary Fund and the World Bank are  cautious about the  country’s growth prospects  as banks  shun  lending to the private sector  in  a controlled  interest rate environment. The  fragile economic outlook has been further dampened by reduced credit to the productive sectors of the economy  and the spiralling public  debt burden, which  currently stands  at over Ksh3.6 trillion ($36 billion). Kenya’s economic growth prospects have been dimmed by uncertainties related to this year’s general election, interest rate controls, shortfalls in revenue collection,  and a ballooning public debt. Although government data has painted a rosy picture of the economic performance over the  nine months to September 2016,  the International Monetary Fund and the World Bank are  cautious about the  country’s growth prospects  as banks  shun  lending to the private sector  in  a controlled  interest rate environment. According to the World Bank, increased government spending during an electioneering period may crowd out private sector investment and lead to overheating of the economy, resulting in inflation. “On the external front, challenges include weaker than expected growth in the global economy, volatility in global financial markets and a spike in oil prices,” the World Bank said. The Central Bank of Kenya confirmed that credit to the private sector...

For many years, farmers have pushed in vain for their milk to be paid based on quality as opposed to quantity. Well, while a majority of the processors are reluctant to implement the model, one has taken the new path, heralding good times for farmers in the New Year and beyond. Happy Cow, a milk processing firm in Nakuru, is pioneering a system that is paying farmers based on quality, rather than quantity for every produce delivered.The company is working with two smallholder dairy cooperatives, namely the New Ngorika Milk Producers Limited and Olenguruone Dairy Farmers Coop-erative Society, which collect the milk from farmers at Sh37 per litre. Producing high quality milk is earning the farmers more as the company uses a system called Quality Based Milk Pay-ment (QBMP) to reward them. How the system works Quality of milk delivered is tracked from the 50-litre can delivered to indi-vidual farmers (5 to 7) based on results of a laboratory analysis. The lab results are used by the firm to plan targeted extension services that the farmer needs to improve and maintain quality. Farmers participating in the sys-tem have to label and own their cans. The can number is used to track quality and trace the source of the milk. Cans qualify for bonus every month and to continually be awarded the bonus is an important mission that requires a lot of attention and effort by both the farmers and the extension team. Happy Cow is working closely with SNV Kenya,...

Tanzania's President John Magufuli (left) and his Rwandan counterpart Paul Kagame jointly opened the Rusumo one-stop-border- post on April 6, 2016 to improve trade between the two countries. PHOTO | CYRIL NDEGEYA  The East African Community is working with agencies such as TradeMark Africa to ease the movement of labour and capital and cross-border business. The Community has initiated projects focused on creating market access, enhanced trade environment and competitiveness. In 2016, 10 of the 13 one-stop border posts were completed and are operational under the integrated border management arrangement. These are the Holili-Taveta, Mirama Hills-Kagitumba, Kobero-Kabanga, Busia-Busia, and Mutukula-Mutukula posts. According to the TMA, the OSBPs have significantly reduced the time spent at the borders. “There has also been efficient movement of goods on the Northern Corridor and linkages to the Mirama Hills-Kagitumba OSBP with construction of the Ntungamo and Port Reitz roads,” said TMA chief executive officer Frank Matsaert. There was a 50 per cent reduction in Customs transaction time as a result of the upgraded Automated System For Customs Data,  the electronic cargo tracking system and the Authorised Economic Operator Scheme, and the electronic single window system. This reduction translates into reduced cost of doing business. For Rwanda, the electronic single window saw clearance times fall from 11 days to one day 10 hours, saving businesses $6.8 million in 2013 alone. Uganda Revenue Authority’s Electronic Cargo Tracking & Customs Management System saw a 75 per cent reduction in transit and clearance times, saving traders $56 million annually. The EAC Single Customs Territory also improved transit times to...

According to energy cabinet secretary Charles Keter, The first export of oil from Kenya through the port of Mombasa is now expected for April 2017. Source: KTN

The Kenya TradeNetwork System for application of local marine cargo insur-ance is up and running, the Kenya Trade Network Agency has said. The state agency mandated to facilitate the new government initiative yesterday said importers and insurance firms can now process marine covers online, under the government’s new policy for mandatory local underwriting for all imports. e new law, which came into effect on January 1, requires imports to be covered locally, under section 20 of the Insurance Act, Cap 487.“ e KenTrade system is up and running,” head of corporate communi-cations Ann Odero said yesterday. She said KenTrade is working with other industry stakeholders including State department for Maritime and Ship-ping Aff airs, Kenya Revenue Authority and the Association of Kenya Insurers to implement the rule.Marine Cargo Insurance policy pro-vides indemnity against loss or damage for goods being transported by sea or air and incidental land transportationFirst time users of the system are required to get access credentials by contacting KenTrade to procure the marine cover insurance certifi cate from their preferred Insurance Company. is process will be done outside the National Electronic Single Window System, KenTrade said yesterday.“ Upon issuance of the MCI ,the trader, insurance company will be required to submit to KRA and any other partner government agencies the certificate through the Kenya TradeNet System,” Odero said. e application through KenTrade is intended to allow KRA and other government agencies to view the marine cargo insurance certificate electronically in the course of cargo clearance. The Shippers...