Parliament might be recalled from recess to ratify a trade pact with European Union (EU) after Kenya was given 30 days on Wednesday to approve the signed deal as a condition for accessing the duty free market in Europe. The move implies that the fate of Kenya in enjoying duty free market access lies with MPs. Parliament broke for recess on Thursday and is expected to resume on October 3 after a one month break. After ratification by the Kenyan Parliament, the EU will make a decision that might see the country’s horticultural produce continue to enjoy duty free access to Europe for a period that the EU has not specified. This is as Kenya works to convince other states in the region to sign the pact, if they would not have endorsed it by then. Trade Principal Secretary Chris Kiptoo showed theSunday Nation a letter that he has written to Parliament requesting them to sign and ratify the Economic Partnership Agreement (EPA) before the end of the 30 day deadline. “I have talked to speakers of both houses on the matter and we are still waiting for the response,” said Dr Kiptoo. Kenya’s duty free market access to Europe comes to an end on September 30 and the government has been exploring a number of options not to be locked out after some members of the East African Community (EAC) showed reluctance in signing the deal, which is a prerequisite. For a deal to be reached, all the EAC...

By Ivan R. Mugisha The proposed Tripartite Free Trade Area between the East African Community, Comesa and Southern African Development Community could potentially eliminate intra-regional trade bottlenecks and boost exports among member states by at least 30 per cent. According to the EAC Secretariat, trade between the EAC and the Common Market for East and Central Africa in 2014 amounted to $2.7 billion while flows between the EAC and SADC stood at $3 billion. The United Nations Economic Commission for Africa (Uneca) projects that the gains could even be bigger if non-tariff barriers between the three sub-Saharan Africa blocs are eliminated when the tripartite arrangement comes into force. The Tripartite Free Trade Area was proposed in Kampala in October 2008, during a heads of state summit. The deal involves 26 countries with a total GDP of $1.2 trillion and a population of over 638 million people. "Our estimates suggest that the TFTA could increase intra-regional trade by as much as 30 per cent. The manufacturing sector will benefit most, giving the needed boost to industrialisation," said Andrew Mold, officer in charge of the sub-regional office for Eastern Africa at Uneca in Kigali. In two weeks, African heads of state and government are scheduled to arrive in Kigali for the Global African Investment Summit, where the progress of the TFTA will be discussed. The deal is expected to come into force after being ratified by at least two-thirds of the 26 member states. But last month, member states differed on the...

THE Parliamentary Committee for Industry, Trade and Environment plans to invite Prime Minister Kassim Majaliwa, key stakeholders and ministries responsible for ports’ management to a meeting in a bid to find a solution to the decline of cargo volume at Dar es Salaam Port. The country’s major sea gateway has been experiencing massive decline in transit cargo traffic in recent months. The reason for the decline ranges from the country’s introduction of Value Added Tax (VAT) on transit goods and strict tax collection measures imposed by the government. Speaking to reporters shortly after holding a number of meetings yesterday with port stakeholders and Tanzania Port Authority (TPA) together with Tanzania Revenue Authority (TRA), the Committee Chairman, Dr Dalaly Kafumu, hinted that the meeting largely aims at addressing the situation. "We held a meeting with port stakeholders earlier. We heard their concerns and recommendations that were geared to bring the port back on track as there is a steep decline of cargo now as compared to previous years. The port authority has admitted that the cargo volume has dropped owing to a range of reasons. There is a need for a joint meeting. We need to sit with the prime minister and other responsible ministers to chart out a solution for this mess,” he noted. Dar es Salaam Port is serving eight land locked countries making it one of the country's main source of income. Unfortunately, the port is now losing to other competitors due to what was mentioned by the...

The opening of a new container terminal at the port of Mombasa is an important step that should improve efficiency at the facility and help to boost regional trade. The cost of the project — Sh30 billion — represents a significant outlay in public resources and it is essential that port managers offer taxpayers good returns on their investment. There are many significant infrastructural projects under way linked to the port, not least the expansion of the pipeline system, the construction of a new Sh27 billion container terminal in addition to the one commissioned on Saturday and perhaps, most significantly, the multi-billion-shilling Standard Gauge Railway (SGR) project. If managed wisely, these projects have the potential to offer significant economic benefits to Kenya and the region. These will only be realised if the leadership at the Kenya Ports Authority, in particular, can harness the significantly enhanced capacity at the port and the expected additional capacity that will be created by the SGR to improve efficiency. It is a requirement under the contract of the new railway that a set amount of cargo will have to be handled by the SGR, for example, and it is to be hoped that the Transport ministry and the managers at the port are working hard to prepare for the implementation of that requirement. The raw numbers are certainly impressive. The new terminal will be able to berth four ships of up to 100,000 tons — used to measure cargo capacity — at the same time,...

Kenya stands to benefit from plans by Tanzania's parliament to terminate a bilateral Single Customs Territor deal with DR Congo. The Tanzania Parliamentary Standing Committee on infrastructure development advised the government to revisit the introduction of SCT on goods transported to DR Congo. According to the committee, the SCT which started last year has reduced cargo through the Dar es Salaam port. Under the arrangement the two countries adopted a destination model of clearance of goods where assessment and revenue collection is done at the first point of entry. The system has caused importers to abandon the Dar es Salaam port and opt for ports of neighbouring countries, Tanzania-Zambia Railway Authority (Tazara) committee deputy chairman Selemani Kakoso told the parliamentary committee last Monday. Tazara targeted to transport 200,000 tonnes of cargo in 2015/16 but managed only 128,105 tonnes, it said. KPA principal communication officer Hajj Masemo said Kenya is way ahead of the port of Dar es Salaam on effectiveness which has attracted regional players. “We are doing a lot of efficiency compared to Tanzania,” Hajj told the Star. In April, the Tanzania business community reported rising use of the Port of Mombasa, citing bureaucracies at Dar-es-Salaam port. The Kenya International Freight and Warehousing Association confirmed increased clearing of cargo destined for Tanzania. “The new systems in place have made importing through Mombasa faster and better,” Kifwa Mombasa region chairman Eric Gitonga said. The port of Mombasa is also riding on low transport costs along the Northern Corridor. The East...

Attention shifts to President John Magufuli as Kenya leads its integration partners to Arusha in a last-ditch effort to safeguard its free trade arrangement with Europe, amid stiff opposition from Tanzania. The East African Community’s extra-ordinary heads of state summit follows a surprise move by Tanzania to pull out of an earlier commitment that would see the bloc collectively sign Economic Partnership Agreements (EPAs) with Europe before the September 30 deadline. Kenya and Rwanda signed the pact in Brussels last week while Uganda said it would append its signature on Thursday during the Extra Ordinary Summit of the EAC heads of state. That technically leaves out only Tanzania as European Union had indicated it may not require Burundi to sign the deal yet until it resolves its internal political problem. South Sudan, the EAC’s newest member also does not need to sign the pact until it completes the two-year bloc membership assentation period. As chairman of the bloc’s heads of state summit, the decision made this week by President Magufuli will determine whether Kenya’s exports face taxes of between four and 24 per cent to enter EU market from October 1. Kenya’s Industrialisation and Enterprise Secretary Adan Mohamed who appeared before the EU Parliament’s International Trade Committee believes the bloc will not tax Kenya’s exports once it sees proof of commitment from EAC members. “The proposed summit will provide further impetus to the EPAs given the significance of the EU as a long term EAC trade and development partner,” Mr...

SOUTH Sudan, which was accepted to become the sixth member of the East African Community (EAC), last April, will today submit ‘instruments for ratification,’ at the EAC Headquarters. According to an official in the Public Relations Office at the EAC Secretariat, Mr Florian Mutabazi, the community’s Secretary General, Ambassador Liberat Mfumukeko, is scheduled to preside over the occasion of ‘Depositing of Instrument of Ratification on the accession to the treaty for the establishment of the EAC by the Republic of South Sudan.’ Essentially this means that the South Sudan president’s envoy would submit official documents that the government of the world’s newest country had signed to indicate Juba’s readiness to comply to the East African Community’s laws, regulations and ultimatums. Last April, President John Magufuli, in his capacity as the Chairperson of the East African Community’s Heads of State Summit led the delegation from South Sudan in signing the initial protocol allowing Juba to join the regional bloc. A month earlier, during their 17th Ordinary Summit held on 2nd March, 2016 here in Arusha, the EAC Heads of State received the report of the Council of Ministers on the negotiations for the admission of the Republic of South Sudan into the Community and decided to admit the Republic of South Sudan as a new member. The Summit then designated the Chairperson, President John Magufuli, to sign the Treaty of Accession with the Republic of South Sudan, which becomes the sixth member of the regional bloc, which was revived in 1999...

ARUSHA, TANZANIA – Tanzania and Ethiopia governments are in final arrangements to sign a 400-megawatt power purchase agreement on the sidelines of the next Eastern African Power Pool (EAPP) talks in Tanzania.  “The project aims at enabling East African Community (EAC) member states to identify sources of cheap electricity for increased power interchanges. Ethiopia has made progress in hydropower generation and is also endowed with abundant renewable energy resources. “These include untapped geothermal, solar and wind energy. At the moment Ethiopia is generating 6,000 megawatts, which can be accessible to neighbouring states,” Felchesmi Mramba, the Managing Director of the Tanzanian power utility company (TANESCO) said last week. Mramba, said the official signing of the power pact with Ethiopia would be preceded by the EAPP meeting in Arusha bringing together representatives, including lawyers, from all the member states. Countries forming the Eastern Africa Power Pool include Kenya, Rwanda, Burundi, Uganda, Ethiopia, Egypt, Sudan, the Democratic Republic of Congo (DRC), Eritrea and Tanzania. Mramba said installation of power generation and transmission facilities would not only foster economic integration but also cater for the region’s power needs for the next 25 years. Mramba said, “Interconnection of the power systems entails synchronisation of electricity supply services such that an area of power, abundance would offset shortages in another country, and vice-versa. Studies in 2009 established the technical and economic viability of the project to meet population growth demand” Ethiopia, through the Ethiopian Electric Power (EEP) authorities, has been exporting electricity to neighbouring countries like...

Last week I attended and made a presentation at a roundtable on manufacturing in Kenya hosted by the Overseas Development Institute (ODI). The roundtable was under ODI’s Supporting Economic Transformation Programme (SET), which is supported by DFID. As part of the roundtable I developed a paper on manufacturing in Kenya and thought it would be useful to share some insights I unearthed during my research on manufacturing in East Africa. At the moment, the manufacturing sector in Kenya is the largest in the east African region. However, in terms of growth other countries in East Africa are growing faster. Data from ODI indicate that the growth of the sector in Kenya is far slower than Ethiopia, Rwanda, Tanzania and Uganda. If this trend continues, other countries will begin to dominate manufacturing in the region. Further, governments in East Africa seem to be putting in more effort to build manufacturing through the creation of industrial parks in countries such as Ethiopia and, making land available for manufacturing particularly for labour intensive manufacturing. Uganda and Tanzania are also determinedly positioning themselves as investment destinations for manufacturing in Africa. This impetus needs to be more strongly echoed in Kenya from the highest levels of county and national government. Furthermore, while Kenya remains an attractive investment destination for manufacturing, other countries in the region are aggressively courting such investment. There is a growing sense that the bureaucracy and corruption in Kenya as well as difficulty in getting the right information on requirements linked to...

DAR ES SALAAM Tanzania (Xinhua) -- The Tanzania Ports Authority (TPA) said on Saturday the recent introduction of the Value Added Tax (VAT) on transit goods and the single customs territory have decreased business at the Dar es Salaam port by 42 percent since July. Deusdedit Kakoko, TPA Director General, said the port was now trying to lure back traders, especially from the Democratic Republic of Congo (DRC) who shunned the port following the introduction of the two services. Briefing a parliamentary committee on Industry, Trade and Investment and the ports stakeholders in Dar es Salaam, Kakoko said cut-throat competition at the Dar es Salaam port which has intensified has led to cargo diversion to other regional competing ports. He said, to lure them back the government would engage local stakeholders with the Congolese businessmen through a one-on-one sharing experience aimed at improving the business at the port. "I wish to extend an invitation for you (stakeholders) to join hands with TPA and undertake a vigorous promotional and customer awareness campaign in DRC," he said. Kakoko said since the introduction of the two services in July this year, business has dropped by 42 percent leading job losses in various sectors including freight forwarding and clearing companies and inland container deports. "We have already initiated the necessary preparations for the intended visit to the Kivu and Katanga provinces in the Eastern DRC,"said Kakoko. He appealed to the stakeholders to facilitate to their delegates in terms of air tickets, subsistence allowances and...