Rwandans will have to dig deeper into their pockets to afford basic necessities such as clothing. The government announced plans to more than double tax on used clothes and shoes in the new financial year as it seeks to cut down on cheap imports. Taxes on used clothes which the majority of Rwandans find affordable will increase by 1,150 per cent — from $0.2 per kilogramme to $2.5 per kilogramme, effectively making them too expensive as the government intensifies measures to stem its growing trade deficit. It also wants to protect its nascent manufacturing industry from competition. The government has also increased taxes on used shoes by 900 per cent, from $0.5 per kg to $5 per kg making the items out of the reach of low-income earners. The move to impose high taxes on used clothes and leather products comes ahead of a planned ban by the East Africa Community but Rwandans say it is a wrong move, as the targeted industries are still struggling. The announcement has triggered a public outcry, and many argue that the decision has been rushed given that the local manufacturers can meet neither the quality and quantity demands of the local market. The public also argue that imports are cheaper than the majority of locally produced clothes and shoes. “We don’t need string shoes and tire shoes only…the shoes we need are sports shoes and there is nowhere you can find durable sports shoes made in Rwanda,” said Leon Jim, a resident of...

Import and export players have lauded the budgetary allocations for ports and roads. Kenya's infrastructural mega projects gained from the budgetary allocations presented on Wednesday by National Treasury CS Henry Rotich. The players in the export and import business are optimistic their businesses will expand, a move they say will lead to the country's development. The Association of Importers of Kenya chairman Peter Mambembe said the funds will improve services and efficiency in the trade. "The allocations will improve efficiency in service delivery and there is need for a more stringent rule to guard the funds from misuse,” said Mambembe. “We are pleased with the allocations towards the development of infrastructure in the port but the government has to do away with cartels at the port if efficiency is to be achieved,” he added. CS Rotich also said the allocations will also boost trade between Kenya and its East Africa states, saying that the government will prioritise the construction of roads like the Voi-Mwatate-Wundanyi and Malindi-Mombasa-Lunga Lunga roads. “I have allocated Sh5.5 billion for the Mombasa port development project, financed by development partners, and a further Sh500,000 million for acquisition of two ferries for the Likoni channel,” said the CS. The business atmosphere, according to Mambembe, will automatically change due to the expected improvements within the ports and roads. Source: hivi sasa

WHEN the first East African Community (EAC) collapsed in 1977, some in the Kenyan government celebrated with champagne. Since its resurrection in 2000, officials are more often found toasting its success. A regional club of six countries, the EAC is now the most integrated trading bloc on the continent. Its members agreed on a customs union in 2005, and a common market in 2010. The region is richer and more peaceful as a result, argues a new paper* from the International Growth Centre, a research organisation. Many things boost trade, from growth to international deals. The researchers use some fancy modelling to pick out the effect of the EAC. They find that bilateral trade between member countries was a whopping 213% higher in 2011 than it would otherwise have been. Trade gains from other regional blocs in the continent are smaller: around 110% in the Southern African Development Community (SADC), and 80% in the Common Market for Eastern and Southern Africa (COMESA). Those numbers for the EAC are all the more impressive because the available data stop before the EAC’s common market had properly come into effect. Progress on that front has sometimes stuttered. A 2014 “scorecard” identified 51 non-tariff barriers. Full implementation could double the income gains seen so far, say the researchers. Not surprisingly, it is landlocked Rwanda which would see the biggest benefits. Tanzania, which has dragged its feet on integration, would profit the least. The researchers are warier of the EAC’s other grand project: creating a...

The East African Business Council has elected Mr Econie Nijimbere from Burundi as its new Chairman for the period of 2016-2017. The Burundian is taking over from Mr Dennis Karera, who served at that capacity from the year 2015. Mr Nijimbere was serving as a Vice Chair. According to the statement issued yesterday, the new EABC chief is currently the President of Burundi Federal Chamber of Commerce and Industry (CFCIB). He has over 16 years of experience in the private sector, from 2010 to the present. He has also served as President of the Burundi Manufacturers Association as well as Board Member of the Burundi Revenue Authority (OBR).  In his acceptance speech, during the council annual general meeting held in Nairobi, Kenya, Mr Nijimbera thanked the outgoing Chairman Mr Karera and the Executive Committee for a job well done and the progress made so far. He outlined key areas that his tenure will focus on implementation of the EABC Strategic Plan 2015/18, extensive advocacy on issues outlined in our EABC Policy Advocacy Agenda document that aims at addressing key sectoral and cross cutting trading policy challenges as well as highlighting gaps and discrepancies in the implementation of the East African Community Customs Union and Common Market Protocols which are hindering East Africans from enjoying advantages presented by East African Community Integration and the wider EAC Common Market. Source: All Africa

East African Community regional integration has not evolved as envisaged. However, it is still achievable, given that the EAC partner states have harmonised most of their policies and internal and external tariffs. As EAC governments unveil their annual budgets, it is essential for the respective proposals to boost cross-border trading, movement of goods and manpower, and address the fundamental issue of non-tariff barriers across the region. Non-tariff barriers are restrictions and limitations that are obstacles to trade. They are not tariffs but rather take different forms of government participation. These include restrictive trade practices, administrative and custom entry procedures, charges on imports, technical barriers, sanitary and phytosanitary measures, institutional corruption, tedious licensing procedures, and transport, clearing and forwarding procedures. Non-tariff barriers have positive and negative effects and present a major stumbling block to full EAC integration. They trim the magnitude of imports in a country by promoting and cushioning local manufacturers and producers against dumping of sub-standard goods in the local markets. However, they also limit the movement of goods across the region and lead to increased cost of doing business, unnecessary delays at border points, and restricted opportunities for business expansion. The EAC committee on the elimination of non-tariff barriers reported that there were 40 unresolved barriers and three new ones in 2012. In 2014, the number of unresolved barriers had increased to 56 and the new ones to five. Insufficient infrastructural services have been identified as a major barrier that increases the cost of doing business and commodity...

Busia, Uganda, June 9th 2016: Travellers to East Africa’s busiest border, Busia, will now enjoy improved service, lesser transit time at the border following the completion and hand over of Busia-Uganda One Stop Border Post.  OSBP’s afford lesser formalities for goods and persons crossing borders. By reducing border transit time by up to 30%, Busia OSBP especially addresses needs of Uganda, a land locked country, which suffers high transit costs for traded goods, which have to be transported by road to the ports located either in Kenya or Tanzania. TradeMark Africa (TMA), which was undertaking the construction and operationalisation of the OSBP, handed over the building mid this week to the Uganda Ministry of Works and Transport. A final inspection established that all the buildings, roads and parking areas, whose works were undertaken under the original contract are technically ready for use. The facility also includes scanners shed, targeting booths, warehouse and canopies. All the Uganda border agencies including immigration, customs and police, have already relocated into their respective offices in the OSBP. Kenyan Customs officials are already working on the Uganda side of the border and the One Stop Controls for cargo are already in place. Immigration officials from both Uganda and Kenya will exchange staff before end of the week.  This will result to improved efficiency of customs and other government agencies by avoiding unnecessary duplication of clearance procedures. By sitting under one roof, Uganda and Kenyan officials will increase cooperation, sharing of information and trade data. This...

Zanzibar — Despite widespread complaints, substandard, counterfeits, and expired products are still entering the Islands at an alarming rate. Many consumers remain uncertain about the goods they use including the essential products like foods and medicines. It is thought that importation and sale of substandard, counterfeit, and expired products have doubled in recent years. Health officers have frequently warned that substandard, counterfeit and expired products can endanger our health and safety, as well as adversely affect businesses by threatening innovation and local production. The authorities here have been using its Zanzibar Food, Drugs & Cosmetics Board (ZFDB) to stop distribution and supply of substandard, counterfeit and expired products smuggled into the market. Since its establishment in 2007, ZFDB officers have been working hard to ensure that only genuine goods are sold to the consumers. Thousands of tonnes of goods have been confiscated and destroyed as one of the Boards' objectives for ensuring Safety and Quality of Food, Drugs, cosmetics, medical devices and related products for people. The establishment of the Zanzibar Bureau of Standards (ZBS) will spur the ongoing efforts by the ZFDB to prevent Zanzibar from being a dumping ground for substandarFood, Drugs & Cosmetics Boardd, counterfeit and expired products. According to the environmental department, and Ports Corporation, an average of 23,000 containers of different lengths, with diverse items including second hand goods and new items such as clothes, foods, vehicles, and electronics are imported annually, with estimation that 20 percent of the items are fake or counterfeit which...

East African Community (EAC) member states have prioritised development expenditure as countries look to further strengthen the growth agenda of the regional economies. In the national budget estimates presented yesterday, the regional bloc’s biggest economy Kenya will be spending $22.8 billion, Tanzania $13.5 billion, and Uganda $12 billion during the next financial year that starts on July 1. Rwanda plans to spend some $2.49 billion in the fiscal year 2016/17. Burundi budget reading is not aligned with that of the EAC bloc. Kenya While presenting the budget speech, Kenya’s Finance Cabinet Secretary Henry Rotich, said the 2016/17 budget will focus on infrastructure development, agriculture, including agro-processing to spur the country’s growth, among others. The minister also abolished tea and sugar development levy. The energy sector got Ksh39.9 billion, standard gauge railway (Ksh228.5 billion) and roads got Ksh147.6 billion. Tanzania In Tanzania, Minister for Finance Phillip Mpango indicated that the new budget is focusing on alleviating challenges of people in low-income groups, and setting the foundation for middle-income country. In a country, where the national debt reportedly stands at $20.94 billion as of March, programmes geared at supporting development were allocated 40 per cent of the total budget, an increase from 25 per cent this fiscal year. Among others, the Tanzanian government intends to borrow Tsh7.4 trillion from domestic revenue to fill the gaps of the fiscal year 2016/17. The government will also spend Sh17.7 trillion on operational costs and Sh11.8 trillion for development. Over Tsh4.77 trillion or 22.1 per cent...

Kenyans will acquire new clothes at affordable prices after the exemption of garments and footwear bought from export processing zones (EPZ) from paying 16 per cent value added tax (VAT). The government says the growth of EPZ in Kenya has been restricted by trade barriers and duty free imports from Common Market for Eastern and Southern Africa states. Industrialisation secretary Adan Mohamed said the move by the Treasury would see Kenyans buy new clothes, such as jeans at less than Sh1,000 from the current Sh1,500 following the VAT exemption. This, he hopes, will wean Kenyans from using second-hand clothes and shoes whose popularity has in large part led to the collapse of Kenya’s once robust textile companies, among them Rift Valley Textiles and Kisumu Cotton Mills. Kenya imports around 100,000 metric tonnes of second-hand clothes, shoes and accessories a year from Western countries aided by their low prices. “This is a good move by CS Rotich that will enable Kenyans to acquire new clothes at affordable rates and cut on second-hand clothes,” said Mr Mohamed. He also noted that the duty exemption would create an additional 20 to 30 per cent jobs in Kenya’s textile industry. Mr Mohamed said that Kenyans have been paying between 41-45 per cent duty to access goods from the EPZ, while the same items are sold cheaply outside Kenya as they do not attract taxes in the export market. Source: Business Daily

An increasing drive to promote domestic textile manufacturing in East Africa is threatening the trade in used clothing to the region, the Bureau of International Recycling (BIR) has been told. The warning was delivered at a session on the global trade in used clothing and textiles at the BIR’s annual Convention and Exhibition in Berlin last week (31 May – 1 June), where delegates disagreed on the status of the used clothing trade. While some  consider used clothing to be a product generated through sorting operations and recognised market specifications, others notably the East African Community (EAC), continued to regard used clothing as a waste and a threat to new clothing production. This view has given rise to calls in some parts of the world for a ban on used clothing imports. At a meeting on an EAC proposal to phase out imports of used textiles and footwear by 2019, BIR Textiles Division president, Mehdi Zerroug, of Framimex in France, said: “Second-hand clothing is a product and new clothing is a product – this needs to be understood.” EAC The EAC comprises six countries, namely: Uganda, Kenya, Tanzania, Rwanda, Burundi and South Sudan. Guest speaker Jalia Nabukalu Packwood, business development officer at Bangor University’s Sustainability Lab in the UK, explained that used textiles traders number in the many tens of thousands in places such as Uganda and Kenya. The convention heard that more than 80% of all clothing purchases in Uganda were used clothes, while Kenya collected US$ 54 million...