Project analysts have asked the government to allocate money and set timelines on its plan to build industrial parks along the standard gauge railway (SGR) corridor. Financial consultancy PricewaterhouseCoopers (PwC) says the faster such projects gets off the ground the sooner they can add to the overall economic performance. “Despite this being a progressive initiative on the government’s part, it was conspicuously notable that the plans to develop the parks do not provide for specific incentives. “Another obvious gap is on the approach the government will take to finance these parks and the timelines when the parks become a reality on the ground,” PwC analysts say in their post budget review. Queries have of late arisen over the economic viability of SGR, being constructed at a cost of Sh327 billion financed by a Chinese loan, after key landlocked states indicated intention to connect to Indian Ocean through Tanzania. In his Budget statement, Treasury secretary Henry Rotich said the government plans to establish green industrial parks under the special economic zones along the SGR line from Mombasa to western Kenya. The government says the construction of SGR to Nairobi is already 80 per cent complete ahead of its launch in June 2017. “With the completion of the new rail, there will be developments of industrial parks along the SGR line at Dongo Kundu in Mombasa, Voi, Mtito Andei, Nairobi and Naivasha which will help boost our manufacturing sector and its contribution to GDP and help create jobs for our Youth,” he...

Following the loss of the Uganda oil pipeline deal to Tanzania, Kenya has a golden opportunity to gain a competitive edge in the region, but analysts argue that it must fast-track the Lamu Port South Sudan Ethiopia Transport (Lapsset) corridor project. Moreover, they contend that the country can compete effectively with its rivals by boosting its infrastructure efficiency. The government maintains that it is committed to seeing the Lapsset project through, but analysts said it needs to put money where its mouth is, noting that the Sh10 billion allocated to the Lapsset this year is too little and may ultimately affect timelines for the completion of the project. Mr Gabriel Ouko, associate director Deloitte East Africa said the budget raises more questions than answers in the infrastructure space. “Given the $30 billion capital expenditure that is required for the Lapsset project, is Sh10 billion not a drop in the ocean? Are we really serious about getting this project going? The government says it is, the budget it is giving is not reflective,” Mr Ouko said. The Institute of Economic Affairs (IEA) pointed out that although infrastructure continues to receive a considerable budgetary attention from successive ministers, it remains the least performing sector in terms of implementing projects. The 2016/17 Budget Summary shows the standard gauge railway will get a whopping Sh154 billion roads (Sh148 billion), Mombasa Port (Sh5 billion) and Lapsset (Sh10 billion). “Absorption in infrastructure sector has been consistently 50 per cent on average for over a decade due...

President Uhuru Kenyatta and his host José Eduardo dos Santos held talks in the Angolan capital Luanda on Tuesday, focused on the rapidly growing trade and bilateral cooperation between the two nations, both ranked among Africa's strongest economies. The bilateral talks came on the margins of the 6th International Conference on the Great Lakes region (ICGLR). Angola is chair of the ICGLR. On the agenda was the easing of barriers to trade and business between Kenya and Angola, one of Africa's fastest growing economies, and which has a keen eye to diversify away from oil. The two leaders considered easing the visa regime to ensure that Kenyans have improved access to Angola's markets, and, in return, that Angola's private sector can make the most of the opportunities that Kenya offers. Under Kenya's progressive visa regime, Angolans can already access visas on arrival at a Kenyan port of entry. At President Kenyatta's request, President Dos Santos said that Angola would look to allow national carrier Kenyan Airways to increase scheduled direct passenger flights, use larger aircraft to replace the current Embraer and Boeing 737 that ply the route thrice a week, and launch cargo flights. President Dos Santos said this would be possible when a new airport, currently under construction, was completed. Kenya also sought a review of the rules governing Angola's investor licenses and work permits, and requested that the wealthy Southwest African nation reconsider foreign exchange regulations which hamper business relations.  The leaders agreed that the matter be dealt...

NAIROBI, KENYA - Kenya’s economic performance was more solid in 2015 than most other large African economies.   The Gross Domestic Product (GDP) is estimated to have expanded by 5.6% in 2015, a slight improvement compared to 5.3% in 2014. The growth was mainly supported by a stable macroeconomic environment and improvement in outputs of agriculture, construction, finance and insurance and real estate. Inflation eased from 6.9% in 2014 to 6.6% in 2015 due to lower energy and transport prices.  Interest rates recorded mixed performance with spikes and dips for most nominal rates in 2015. The Central Bank Rate (CBR) increased from 8.5% in December 2014 to 10.0% and 11.5% in June and December 2015, respectively. The weighted average interest rates on commercial banks loans and advances rose by 1.4% points to 17.5% in December 2015 compared to a rise of 15.9% in December 2014. Generally, the Kenya Shilling depreciated against the major trading international currencies. TheKenya Shilling weakened against the US Dollar, Chinese Yuan, Indian Rupee and Pound Sterling by 11.7%, 9.5%, 6.3% and 3.7%, respectively, in 2015. However, the Kenya Shilling gained against the Euro, South African Rand and 100 Japanese Yen by 6.7%, 4.7% and 2.6%, respectively, in 2015. Within the EAC region, the Kenya Shilling displayed mixed performance, strengthening against the Ugandan Shilling and Tanzanian Shilling by 11.5% and 9.5%, respectively but weakening against the Rwandese Franc by 9.0%. The depreciation of the currency was mainly due to the global strengthening of the US Dollar on...

Presidents Uhuru Kenyatta and José Eduardo dos Santos (Angola) focused on trade and bilateral cooperation during their talks in Luanda on Tuesday. The talks were held on the sidelines of the 6th International Conference on the Great Lakes region (ICGLR). Uhuru and Jose considered easing the visa regime to ensure Kenyans have improved access to Angola’s markets. Angola's private sector will in return make the most of the opportunities that Kenya offers. Under Kenya’s progressive visa regime, Angolans can already access visas on arrival at a Kenyan port. At Uhuru's request, Jose said his country will look into allowing national carrier Kenyan Airways to increase scheduled direct passenger flights. He said they will also consider allowing KQ to use larger aircraft to replace the current Embraer and Boeing 737 that ply the route thrice a week, and launch cargo flights. He said this will be possible when the construction of a new airport is completed. Kenya also sought a review of the rules governing Angola's investor licenses and work permits. Uhuru requested that the wealthy Southwest African nation reconsider foreign exchange regulations which hamper business relations. The leaders agreed that the matter be dealt with in the context of a wider exchange of agreements and Memoranda of Understanding when the two leaders hold a summit. Jose said he will honour Uhuru's invitation for a state visit in the second half of the year. Kenyan Foreign Ministry officials said they hoped to pin down an August date. The Angolan leader was...

Romania’s Government aims to stimulate the country’s exports to Africa and has signed, together with other EU countries, an economic partnership agreement with the East African Community (EAC) states. Romania anticipates that the agreement will help it export Dacia Logan cars, communication equipment, mineral water to Burindi, Kenya, Rwanda, Tanzania, and Uganda, reports local Profit.ro. The Government also hopes that the partnership will help increase Romania’s exports of construction materials, fertilizers, cosmetics, and pharmaceutical products to these countries. Romania’s trade with EAC countries totaled EUR 32 million in 2015, consisting in EUR 11.6 million exports and EUR 20.4 million imports. Source: Romania - insider.com

An urban planning policy for the East African Community (EAC) will create a network for the allocation of investment and for the production and sale of most goods and services once adopted, a regional parliamentarian said. MP Nancy Abisai earlier this month urged the East African Legislative Assembly (EALA) to adopt a motion in support of an urban planning policy for the bloc, with view to empower the urban poor. Shortly before the motion was adopted, the Kenyan lawmaker told the Assembly that poor urban governance and inappropriate policy frameworks contribute to the vulnerability of the urban poor. Corruption, inappropriate policies, and cumbersome regulatory requirements in EAC cities, she said, lead to deprivations such as inadequate infrastructure and environmental services, limited access to school and health care and social exclusion. “Better urban governance is, therefore, a necessary condition for empowering the urban poor and improving their opportunities and security,” Abisai said. “Urban planning will reduce social inequality. Social and economic inequalities are apparent in urban areas and are growing in all the cities in the EAC partner states and can lead to social and political clashes.” Augustin Rwomushana, Director of Urban Economic Development in the City of Kigali, told The New Times last week that EALA’s resolution is a catalyst for increasing urban network of regional cities, towns, and villages encompassing all aspects of the environment within which societies’ economic and social interactions take place. Rwomushana added: “Nationally, the resolution will create a network for the allocation of investment and...

The horticulture sector stands to lose about Sh4 billion monthly if a key trade deal with the European Union is not signed by October 1. Regional countries that make up the East African Community (EAC) are supposed to sign the Economic Partnership Agreement (EPA) jointly. The agreement gives the region’s products duty-free export access to European markets. For the EPAs to be valid, the entire region needed to agree to them, but special concessions would remain in place for least developing countries. Kenya, therefore, stands to lose the most if export subsidies are withdrawn. However, Tanzania and Uganda have been dragging their feet in reaching the deal. Kenya Flower Council (KFC) Chairman Richard Fox said failure by Kenya to sign the EPA will subject it to export duty of between 8 per cent and 12 per cent, which will amount to 3 million pounds per month (Sh4 billion). Kenya is the only country in the EAC considered a developing country, while its neighbours are still ranked as least developed countries (LDC), thus allowing them duty free market access. The LDC countries are not required to sign EPAs since their preferences will continue under the Everything But Arms (EBA) scheme. Under EBA, poor nations are granted duty free access to the EU for all products, except arms and ammunition and 41 tariff lines concerning rice and sugar, on which duty free quotas are established until full liberalisation. KFC Chief Executive Officer Jane Ngige said failure to sign the pact will put...

The overall objective of 2016/17 budget was achieving a middle income status through Sound macroeconomic policy framework, Employment and job creation interventions and Productivity enhancement programme. Domestic revenues are projected to increase from Ushs 11.6 trillion to Ushs 13.0 trillion through increasing tax base and reducing the informal sector. Uganda’s economy has remained stable with the national economic output increment at 4.6%• which is below the targeted 5%.  Inflation peaked at 8.5% early this year but has generally stabilised at 5.4% as of May 2016. Uganda’s imports were worth US$ 5,647 million; compared to export receipts of US$ 2,669• million due to the strong US Dollar and speculative tendencies related to the 2016 General Elections; and  The foreign exchange reserves contain approximately 4.4 months-worth of imports of goods and• services valued at US$ 2,925 billion. According to Matia Kasaija who read the Budget, the government will continue to simplify the tax regime, enhance compliance and eliminate tax• avoidance and evasion; and Tax relief to be granted to businesses that acquire or merge business with losses so as to• promote investing in Ugandan businesses. Social economic environment Government’s priority is to improve the water and sanitation infrastructure by expanding piped• water schemes, urban sanitation, and rural water access facilities; and  Enhanced supervision and monitoring of Government programmes to strengthen accountability• and quality of public service. The cost of personalised number plates has increased from Ushs 5m to Ushs 20m;•  Implementation of the Taxpayer Registration Expansion Project (TREP) to enhance coordination• between...

Dar es salaam, Tanzania - For the year 2016/2017, Tanzania’s budget has zeroed in on “Industrial growth for Job Creation”.   An emphasis of the first budget of the Fifth Phase Government with the motto “Hapa Kazi Tu” is to implement its commitment under the CCM Election Manifesto (2015-2020); Five Years Development Plan (2016/2017 – 2020/2021) and the National Development Vision 2025. The main objectives are: Addressing challenges faced by Tanzanians and bringing new hope for a better life, especially to low income earners through major reforms in the Government’s undertaking through restoring discipline and accountability, strengthening integrity and management of public expenditure and national resources. Developing industries to transform the economy into real middle income economy through developing industries that will foster job creation for youths and enhance agricultural productivity. The industries would include textiles, livestock products, agro-processing including rubber products, cashew nuts, tobacco, sugarcane tea and paddy. The Government is determined to strengthen domestic revenue collections and therefore reduce donor dependency. To achieve the objectives, the following measures have been proposed: Effective use of electronic systems and devices in collecting revenues; Widening tax base including formalization of the informal sector; Strengthening monitoring of revenues collected by Government Institutions and agencies; Continue measures to control and reduce tax exemptions; and Conduct frequent inspections and strengthen management at ports, airports and border posts to ensure appropriate tax collection. Positives: Efficient collections on tax revenues with 99% of the targeted revenues being collected between July 2015 and April 2016. Under the...