The Kenyan manufacturing sector has in recent years been fraught with challenges including subdued product demand in key export markets, high production costs and competition from cheaper producing rivals especially in Asia. The exclusive Export Processing Zones (EPZ) are among the segments that for years suffered a downturn due to a high demand for cheaper second-hand clothes and uncertainty over preferential entry of products into the US market under the Africa Growth and Opportunity Act (Agoa). But a decision by the US Congress in June 2015 to extend the Agoa by another 10 years has triggered fresh enthusiasm in the EPZ business. Though the Act originally covered the eight-year period from October 2000 to September 2008, amendments by then US President George Bush in July 2004 extended it to 2015. Several Kenyan products, notably apparel and agricultural produce, are big beneficiaries of this arrangement which has lifted import duty on all eligible products and granted preferential market access upon compliance with Rules of Origin. Latest statistics in the Economic Survey 2016 showed that the EPZs recorded a 12.1 per cent growth in sales last year underlining a resurgence of the sub-sector that is expected to be a key pillar of Kenya’s development. The EPZs recorded growth in all key fronts including employment and investment-- offering support for the government’s plan to establish a variant of these zones- the Special Economic Zones (SEZ). The growth was mostly driven by apparel exports under the Agoa . “In 2015, enterprises operating under the...

Kenyan exporters will spend less time when applying for the certificate of origin following the digitisation of the process. The traders can apply and receive the document through the Kenya National Chamber of Commerce and Industry’s (KNCCI) trade portal in real time. The automation of issuance of the certificate of origin was as a result of a collaboration between KNCCI and Trade Mark East Africa (TMA). The system has also been integrated with Equity Bank, allowing for real time payments and receipt of notifications through mobile phones or online. The certificate is an export document that confirms the country of origin of goods in a particular export shipment. The automation of the process is set to improve the ease of doing business for Kenyan exporters as less time will be spent on lodging the application and receiving vital the trade document. Processing of the document has been reduced from two days to one hour, improving efficiency in the sector. Speaking at the launch, KNCCI chairman Kiprono Kittony said that the portal was developed in response to challenges faced by exporters in accessing manual certificates including delays. “It will enhance security of the export documents, create more transparency and speed in the issuance of the ordinary certificate of origin and thereby actively play a facilitator role in enhancing a friendly trade environment,” he said. The 2015 East Africa Logistics Performance Survey released in November last year said that automation of key logistics facilities around the country would improve transport efficiency if...

NAIROBI.- The African Union (AU) said on Saturday it has started the process of issuing the continent’s passport. Kenya’s Cabinet Secretary in the Ministry of Foreign Affairs and International Trade Amina Mohamed told a briefing in Nairobi that African Ministers of Foreign Affairs have began filling in the forms for the Africa passport, which will be issued at the AU summit in July. “I have the honour to inform you that in line with the decisions of the AU Summit of Heads of State and Government to facilitate free movement throughout the continent, through the creation of (an) African passport for heads of states and ministers, the issuance process commenced on Friday,” Mohamed said on the sidelines of the Fourth AU Executive Council Retreat. This is the first time the retreat is being held in Kenya as previous ones were hosted by South Africa and Ethiopia. African passport holders should receive a 30-day visa on arrival at all airports in AU member states. Mohamed said that regional economic blocs such as the East African Community have already introduced a regional passport to ease travel within the blocs. “The African passport will build on the success achieved by the trading blocs and help to achieve the dream of free movement of Africans across the continent,” she said. The cabinet ecretary noted that the continental passport will help to speed up the process of establishment of the Africa Economic Community. “It will also boost intra-Africa trade that is below the level of other continents,”...

African countries can boost growth by cutting tariffs and removing "soft" barriers to trade, while still supporting their industries without completely protecting them. Imagine you are a Malaysian truck driver. In the back of your truck is a big cargo of stinking durian fruit. The Singaporean border heaves into view. What will happen? Will you pull over and fill out some paperwork? Wait around to get the documents stamped – hours spent in the sun – with your precious durian rotting in the back? Of course not. Africa needs to realise that its future lies within the continent You whip out your smartphone and send your pre-filled cargo passage form. It is immediately routed through the relevant ministries in Singapore. The authorities e-stamp the form and send it back to your smartphone. Beep. Job done. No need to stop. You don't even need to slow down. Welcome to Singapore. The benefits of frictionless trading with neighbours seem clear. The farmer buys more inputs with the money saved on transporters, and the consumer gets fruit cheaper, allowing him to spend more on other items and boost the economy. The trucker also has more time to carry other loads. Africa is not quite there yet, and border crossings often involve waiting. Of Africa's total trade, just 11% of it is done within Africa, compared to 50% intraregional trade in developing Asia and 70% in Europe. The world economy is going through a period of slower growth, just as tens of millions of young Africans...

The World Bank has assured it will work with the East African Community (EAC) partner states to help the economic community achieve full integration. The World Bank programme Manager for South Sudan, Jean Lubega-Kyazze told Xinhua in Nairobi that the project will begin before the end of 2016 and will take three years to complete. She explained that the project aims at helping the EAC overcome the constraints that have prevented full implementation of the EAC Common Market protocol. “We have identified the constraints that each country needs to overcome in order for the EAC to be fully integrated. Each country is unique and therefore has different constraints,” she added. According to the financial institution, regional integration holds a lot of promise for the partner states. “It will create a seamless market for goods produced in each member state,” Lubega said. The programme manager observed that one of the key constraints to full integration is the lack of integration of regional policies into national policies. “So national policies don’t reflect what has been agreed upon at the EAC level and it is common to find cases where national policies don’t include positions reached upon at the regional level,” she added. EAC Common Market Protocol was signed in 2010 but the trading block is yet to fully liberalize the free movement of goods, services and labour. EAC member states include Kenya, Uganda, Tanzania, Rwanda, South Sudan and Burundi. Source: Africa News

The growth in trade with Uganda resumed in earnest after the conclusion of elections in March according to the bank. “It’s business as usual in Uganda after the conclusion of elections in February and hence Kenya’s manufacturing exports have been robust,” said Jibran Qureishi, regional economist for East Africa at CfC Stanbic Bank. The lender forecast that the completion of the standard gauge railway will further increase the trade with Uganda. The railway line is set to reach Nairobi by mid next year. The railway is planned to be extended to Kisumu and Malaba at the border with Uganda. “As regional infrastructure is bolstered, through developments such as the standard gauge railway, we believe this avenue will continue to show more promise in the coming years,” said the bank. The improvement in trading will come as a relief for businesspeople since Uganda has traditionally been Kenya’s single largest export market. There has also been considerable unease following the government’s failure to clinch an oil pipeline deal to transport Uganda’s oil through Kenya. The deal instead went to Tanzania. The latest Purchasing Managers’ Index (PMI) data released by CfC Stanbic indicates a turnaround in growth of Kenya’s private sector, following a substantial slowdown at the end of the first quarter. The PMI picked up from a five-month low to signal robust improvement in business conditions. “Business conditions improved at a solid pace, helped by sharp expansions in output and new orders. Notably, the rise in total new business was boosted by...

THE Nakonde–Tunduma Border Post has for a long time faced various difficulties which have hindered the effective revenue collection by authorities in both Zambia and Tanzania. The border post collects an average of K4.6 million per day or K138 million per month, making it the second largest revenue generating border after Chirundu which collects about K220 million per month. In an effort to resolve these challenges, officials from the two countries recently met in Nakonde to discuss and find ways of improving the operations of the border post. Some of the problems that needed urgent attention include the porosity and illegal trade along the border and the construction of structures for the One Stop Border Post on the Tanzanian side. Other obstacles are reduction in clearance time, curbing revenue collection leakages, counterfeit travel documents and operational challenges of Zambian truckers having difficulties on the Tanzanian side and buses from Tanzania that are not allowed on the Zambian side. In October 2014, a meeting of permanent secretaries and high commissioners from the two countries was held in Mbeya, Tanzania, to discuss operational difficulties at Tunduma-Nakonde Border Post. And following the 2014 meeting, about 100 delegates from Tanzania and Zambia convened in Nakonde recently to formulate a mechanism that will help the two countries harmonise their trade activities. And during the adoption of the minutes for the Sixth Joint Meeting of Permanent Secretaries of Zambia and Tanzania held on April 27 this year, it was agreed that there is need for both...

According to the Africa Regional Integration Index Report 2016 which was presented in Nairobi during the African Union Executive Council Retreat, Kenya leads in regional integration within the Common Market for Eastern and Southern Africa (COMESA), East African Community (EAC) and Inter Governmental Authority on Development (IGAD). The report was jointly prepared by the African Union Commission, African Development Bank and the UN Economic Commission for Africa. The report said that Kenya is a top performer on free movement of people within the framework of the EAC Common Market Protocol. The report tracked integration through trade integration, regional infrastructure, productive integration, free movement of people, financial and macro-economic integration. The Index 2016 report covers member countries from the eight Regional Economic Communities (RECs) recognized by the African Union. EAC is the top performing REC on Regional integration overall. The study indicated that in the EAC, Kenya and Uganda are among the top three contributors to wealth creation. They respectively account for 39 percent and 21 percent of regional Gross Domestic Product (GDP). In the IGAD bloc, Ethiopia, Sudan and Kenya are the principal contributors to wealth creation in the region as they account for 29, 28.5 and 27.7 percent of regional GDP respectively. The report further noted that trade links between Africa and the rest of the world is generally more direct and efficient compared to trade between neighboring regions as a result of infrastructure gaps and tariff barriers. Source: Shanghai Daily

n an interview with Weekend Business, EU Head of delegation to Kenya Ambassador Stefano Dejak said Kenya’s manufacturing and agricultural sectors have huge potential yet to be realised. He said since over 26 per cent of Kenya’s export go to EU markets, there is need for more support to more diverse sectors and not only horticulture. “Most of the [Kenyan] exports are unprocessed. We want to assist Kenya to increase the share of processed agricultural products. At the moment, the value chains in agriculture and commercialisation are not yet at desirable levels,” said Dejak. He said small-scale farmers must be assisted since they carry huge export potential. Currently, EU is funding Kenya Rural Development Project to a tune of Sh9.9 billion (86.4 million euros) to boost agriculture. Having successfully hosted the 10th World Trade Organisation Ministerial Conference (MC10), Dejak added that Kenya scored incredible success especially in areas of agricultural subsidies and removal of taxes on Information Technology-related goods. On manufacturing, he appealed to the Kenya Association of Manufacturers to take advantage of the regional integration and specialise in areas that can win them comparative advantage. “Manufacturing sector is usually critical for economic take-off of any country. World Bank report shows this sector has stagnated yet it produces most jobs in any economy,” he said. For increased value chain in agriculture, Dejak observed that, a strong manufacturing sector that can significantly contribute to economic development is desirable. According to the latest Economic Survey 2016 by Kenya National Bureau of Statistics,...

Ugandan goods just got a whole new playground on the European market after the East African Community and the European Union ended negotiations on the Economic Partnership Agreement (EPA) after more than a decade of talks. Kristian Schmidt, the head of delegation of the Europe Union in Uganda, says EPA is about to enter into force and that, when it does, the conditions to trade and invest will be easier for the countries in the EAC region and those in the EU. “The trade negotiators have done their duty. The European markets are open to East Africa business community,” he said recently. “Exports originating from Uganda and the entire EAC will enter the market of all EU member states without paying customs duties and without limitation in quantities, for an indefinite time.” Schmidt was addressing a press conference organized by the European Business Forum (EBF), which was intended to announce the forthcoming European Business Expo and Food festival to be held in Kampala starting today, May 6. Schmidt added: “So, this leaves the door open for any company operating in Uganda to export freely; no customs duty to an integrated, single market of 28 European countries, with 508 million consumers with considerable purchasing power.” According to Schmidt, Uganda and EAC partner states have committed to partially and gradually reduce, and eliminate, customs duties on selected imports originating from the EU. “That means EAC operators can import from Europe more strategically. They will be allowed to buy duty-free, thereby at a...