The price of commodities also fell, with the price of oil dropping 3.9% to USD50 per barrel.  On June 23, the United Kingdom (UK) voted to leave the European Union (EU) in a non-binding advisory referendum, which resulted in the resignation of UK Prime Minister David Cameron and is likely to trigger fresh elections later this year or in 2017. Despite pressure from some EU countries, it is unlikely that exit negotiations will begin until a new UK government is firmly in place. There is a possibility that the next UK government will not trigger exit negotiations at all, based on a legal technicality or if it calls a second referendum. Regardless of the probability of an eventual UK exit from the EU, the referendum result has caused market turmoil across the world, as investors worry that the result of the UK vote could drive fresh momentum to anti-establishment movements in other European countries, including East Africa, a region with a strong British colonial legacy, which must feel “blow back” from Brexit. For example, Global stocks lost USD2 trillion in value on 24 June and sterling fell to a 31 year low. UK companies and banks were some of the worst affected, with USD55 billion wiped off banking stocks. The price of commodities also fell, with the price of oil dropping 3.9% to USD50 per barrel. However, the price of gold gained 4.7% as a reflection of investors’ perception of gold as a safe haven. Undeniably, further riveting economic, political...

Eight companies from Germany, dealing in energy, construction and health, are taking part in the ongoing 40th Dar es Salaam International Trade Fair (DITF) as they seek to establish their presence in Tanzania and the East African Community (EAC). “Bilateral trade between the two countries should grow significantly as more companies from Germany are showing interests to invest in Tanzania,” Deputy Head of Mission at the Embassy of the Federal Republic of Germany in Tanzania, Mr John Reyels, said yesterday. The envoy was speaking during a news conference to introduce the eight companies at the Mwalimu Julius Nyerere Trade Fair Grounds in Dar es Salaam. “I do not have exact figures on the trade balance between the two countries but it should be between 60 and 40 per cent for Germany and Tanzania, respectively,” Mr Reyels explained. Major exports from Tanzania to Germany include minerals, metal and agricultural produce such as coffee and spices while it imports technology, machinery, motor vehicles and industrial machinery from the European country. At the same occasion, the Head of the Tanzanian German Business Centre, Mr Dirk Smelty, said since the Fifth Phase Government under President John Magufuli came into office Tanzania was becoming a driving force in the East African region. He welcomed ongoing negotiations among member states of the East African Community (EAC) to reduce tariff and non-tariff barriers, noting enormous potential for trade and investment in the region. “In Tanzania for instance, the economy has been stable, growing at average of 7...

The wind of change blowing through Europe has enormous economic, political and social implications for major economies in Africa. The Brexit vote ushers in a period of anxiety and prolonged uncertainty about the future. Read more at: http://www.standardmedia.co.ke/business/article/2000207537/which-way-for-kenya-uk-trade-ties-after-brexit-shockwave. The impact of the vote is already being felt, with immediate effects on currency fluctuations, spasms in various stock exchanges across the globe, uncertainty of central bankers and wariness of African economies with ties to the UK. With the recent strengthening of the shilling against the pound, Kenyan importers will enjoy a window of cheaper purchases from UK. However, for Kenyan exporters to the UK, the commodity value will diminish, resulting in shrinking profits. But this is likely to be short-lived as currencies are expected to stabilise once the dust settles. The real brunt of the vote is expected to be felt during the finalisation of UK’s exit terms and a notification of the same to the European Union (EU) Secretariat. Trade agreements currently in place between the EU and East Africa Community (EAC) may have to be renegotiated between the UK and EU separately. Depending on the outcome of the renegotiations, benefits accruing under the current trade protocols may be strengthened, retained or lost. Any renegotiations of the deals because of Brexit may eventually lead to export or import delays and loss of revenues. Loss of revenues An industry likely to be hard-hit by these changes in trade deals is horticulture, which dominates the European market in cut flowers and other...

Kenya Revenue Authority (KRA) says passenger and cargo dwell time at the Taveta border has reduced by two hours due to the success of the One-Stop Border Post (OSBP). The post, an initiative of the East African Community, has also reduced transport costs incurred by businesses, farmers and transporters while crossing borders. KRA Taveta post manager Daniel Nyambaka said the agency is anticipating increased revenue collection at the post once the tarmacking of the Mwatate-Taveta road is completed. The Taveta-Holili One-Stop Border Post came into operation in May last year and is part of the 15 such posts in East Africa built at a cost of $12 million (Sh1.2 billion) through funding from TradeMark Africa. “We hope to see increased revenue due to increased cross-border trading between Tanzania and Kenya by December when construction of the road is complete. The road will reduce the distance from Tanzania to the port of Mombasa by nearly 400 kilometres,” said Nyambaka. He said the post has boosted cross-border trade and fostered good relations between Kenya and Tanzania. “In the past, people coming to Kenya would spend up to two hours waiting for clearance. But now it takes just 30 minutes to clear and move on to your destination,” he added. Source: Mediamax

What exactly will replace it, if anything, is much, much less clear…” Reuters News Agency Columnist, Peter Apps. THE most dramatic news this time around was the vote by British people to exit from the European Union, henceforth christened by the global media as ‘Brexit vote’. For us here watching the news on television in the intervening period, what prompted the referendum to be taken on whether or not Britain should stay as member of the 28-member post Second World War European unity body was far from clear. I guess not many of us here were interested in this development given the fact that Britain belongs to the club of what Mwalimu Nyerere once described as “wakubwa” – in a collective sense meaning the powerful wealthy North - as opposed to us who belonged to the impoverished South; in the economic sense. But Britain matters. It is a former colonial power of this country and indeed the whole major states of East Africa today. Britain is, from a cultural perspective, influential because English language is one of the leading global languages that links up people across the planet. So what happens in Britain is interesting to Europeans as much as to Africans. Following the opinion of the British national, a columnist quoted at the launch of the perspective, reading his article further, the journalist says that within the UK government no one “planned for the outcome of Brexit vote”. “The results show the country savagely, bitterly divided. Essentially voters in...

DAR ES SALAAM Tanzania (Xinhua) -- Rwandan President Paul Kagame has called for the consolidation of economic ties between his country and Tanzania. On the first leg of his two day tour of Tanzania, President Kagame said the two countries stood to record high economic growth with their abundant natural resources. "We have people with talents who could do wonders in propelling these countries to prosperity," said Kagame accompanied by his host, President John Magufuli, at the official opening of the 40th Dar es Salaam International Trade Fair in the commercial capital Dar es Salaam. More than 650 firms from over 30 countries across the world, including China, are participating in the week-long trade fair showcasing businesses from across the world. President Kagame urged public and private sectors to work together for the benefit of the people in the two countries endowed with abundant natural resources which could contribute heavily to the growth of their economies. He added that the two countries have been working closely in removing obstacles in trade with a view to boosting integration between the two countries, and among member states of the East African Community (EAC). President Magufuli assured President Kagame of his government’s resolve to improve the performance of the Dar es Salaam port to facilitate movement of goods to the landlocked hilly country. He said it was sad to learn that trade in Tanzania contributed to less than five percent to the world economy while the EAC regional bloc contributed only 20 percent....

IN SUMMARY Across the region, political parties are facing a torrid time, with little financing, restrictive laws on mobilising funds, especially from external sources, and dominant ruling parties that feed off the state — a situation that makes for a generally weak political party foundation. While incumbent parties look strong, are flush with cash and have countrywide networks, experts warn that that strength is hinged on their stay in power — were they to turn into an opposition party, their existence would not be guaranteed. Complaints of an uneven political playing field persist and while the EAC partner states have made attempts to provide statutory financing, critics say the funding is too little or skewed and at best cosmetic. If the functioning and welfare of political parties were a measure of a country’s democracy, how would the East African region fare? Currently, multipartyism is more or less taken as the universal standard of democracy, of course when accompanied by regular elections. Though most of Africa has adopted this standard with some nudging from the West, pockets of resistance remain on whether parties and elections equal democracy. The funding systems set up by governments in the region and freedom for the parties to mobilise their resources is a safe good measure to test the region’s commitment to functional political parties and democracy. The scorecard for East Africa turns out to be mixed. Across the region, political parties are facing a torrid time, with little financing, restrictive laws on mobilising funds, especially...

KIGALI Rwanda has massively increased import duties on secondhand clothes and shoes coming mainly from Europe and North America, to help promote local manufacturers. The measure “takes effect from July 1,” a manager in the Rwandan Receipts Agency, Drocelle Mukashyaka, told AFP on Friday. Import duty on one kilogramme (2.2 pounds) of shoes and clothing was previously $0.2, but it has been raised to $2.5 for clothes and $5.0 for shoes, she said. Secondhand clothing imported wholesale from the West is highly popular in Rwanda as in other African nations where these garments are sold at low prices. But the thriving market has “completely killed the textile industry” in developing countries, Trade Minister Francois Kanimba said in mid-June. Last February, the five heads of state in the East African Community — Burundi, Kenya, Rwanda, Tanzania and Uganda — agreed to bring about a total ban on imports of secondhand clothes by 2019. Rwandan Economy Minister Claver Gatete on Wednesday said that ending the trade was not just about industry, “it is just not even acceptable according to our dignity”. “I don’t know if there is any trade on secondhand clothes between any European countries among themselves,” he told a press briefing. Patel Ritesh, the director of Utexrwa, one of the two textile factories in the small central African nation, hailed the new tax as good for business in a sector hit hard by cheap competition. But ordinary Rwandans are less keen on the measure, fearing a rise in prices of...

On June 13, two weeks before the United Kingdom voted to leave the European Union, the African Union announced a new “single African passport.” The lead-up discussion was much like the original debate on the European Economic Community, the E.U.’s predecessor. African passport proponents say it will boost the continent’s socioeconomic development because it will reduce trade barriers and allow people, ideas, goods, services and capital to flow more freely across borders. But now the A.U. faces the challenge of making sure the “e-Passport” lives up to its potential – and doesn’t fulfill detractors’ fears of heightened terrorism, smuggling and illegal immigration. The African e-Passport is part of a long-term plan for the continent The e-Passport is an electronic document that permits any A.U. passport holder to enter any of the 54 A.U. member states, without requiring a visa. It will be unveiled this month during the next A.U. Summit in Kigali, Rwanda. Initially, the e-Passport will only be available to A.U. heads of state, foreign ministers and permanent representatives based in the A.U.’s headquarters in Addis Ababa, . The plan is to roll it out to all A.U. citizens by 2018. The electronic passport initiative grows out of the A.U.’s Agenda 2063, a plan to mobilize Africa’s vast resources to strengthen the region’s self-reliance, global economic power and solidarity. Why is the single African passport important? The e-Passport is a step toward eliminating borders on the continent, aiming to enable deeper integration, increased trade and further development. Just as important, the passport is a powerful symbol of unity across...

Pretoria — South African companies should explore opportunities in Tanzania's roads, rail and port infrastructure development projects, says South Africa's High Commissioner to Tanzania, Thami Mseleku. Speaking at a business seminar in Dar es Salaam, on Thursday, the High Commissioner said South African companies must explore joint-venture opportunities that exist. Mseleku said Tanzania stands at a crossroad because of its 6-7% growth rate and it has the potential to grow if certain strategic decisions are followed through. "We must note that this is not only a growth point in itself but it is an entry point to the east African community here particularly because the country is strategically located in order to enable us to penetrate the markets of Rwanda, Burundi, DRC and Uganda that are landlocked and are dependent on Tanzania's port resources. That is there reason why the Tanzanian government is focussing on the development of the Dar es Salaam port because it is not only of interest to Tanzania but to all the countries in the Economic Community of West African States (ECOWAS)," said Mseleku. The High Commissioner's comments come as the Department of Trade and Industry is currently leading 25 local businesses on an Outward Selling and Investment Mission (OSIM) to Tanzania. Other opportunities that exist for South African companies are in the discovery of gas both on-shore and off-shore. "About two days ago there was an announcement on the discovery of helium. So you can see that the country is on the move in terms...