Inter-regional trade is becoming increasingly important but infrastructure has to catch up to demand. Inter-regional trade is becoming increasingly important but infrastructure has to catch up to demand, writes Karim Sadek, Managing Director at Qalaa Holdings The countries of East Africa are currently grappling with a set of challenges and developmental priorities that are similar to what we are going through in Egypt, our home market. Expanding trade and building infrastructure to keep pace with the demands of young, growing populations are among the most pressing challenges at present. In 2015 Egypt's trade with Africa accounted for less than five per cent of total trade and intra-African trade as a whole stood at only 12 per cent of the continent's aggregate trade. Although an upward trend has started to emerge, there is still much that needs to be done. The Africa Union's Agenda 2063 envisions a fully functional African common market with free movement of people, goods, capital and services. To realise this transformation goal, Africa needs to put in place the necessary strategies, processes and infrastructure to harness the continent's potential. While trade is growing by up to eight per cent per annum across the region, without the transport and logistics sector becoming more efficient, growth will be severely constrained. Reducing cost and time of transport and logistics would increase trade, reduce the cost of living, contribute to higher exports and faster growth for Africa. According to the African Development Bank (AfDB), "Africa still has massive infrastructure needs" yet...

The newly-constructed Kenya Ports Authority (KPA) Second Container Terminal has received its first container vessel after its completion in February. Mv Busan Trader from Colombia docked at the port of Mombasa on Monday at 2.30 pm and off-loaded the first container at 4.22 pm. The Kenya Ports Authority (KPA) officially took charge of the first phase of the facility after the official hand over from a Japanese contractor, on February 29, at the KPA headquarters. “It is the first vessel since it was handed over to us and this is a boost to our business at the port of Mombasa and the East African region,” said KPA Corporate Affairs Manager, Benard Osero. The Sh28 billion terminal was handed over after a thorough inspection by KPA top management and government engineers. According to Osero, the concessionaire to operate the first phase of the second container terminal at the main Mombasa Port is set to open up regional trade and boost economic growth. The first phase of the $300 million terminal comprises two berths which are set to handle increased cargo traffic within the East African region. The port of Mombasa is the biggest in the region and also doubles up as the gateway that handles fuel and consumer goods imports as well as exports of tea and coffee for landlocked neighbours such as Uganda and South Sudan to the European market. According to 2016 KPA statistics, the new terminal is projected to have a capacity of 450,000 twenty-foot equivalent units (TEUs),...

Presidents Uhuru Kenyatta (Kenya), Paul Kagame (Rwanda) and Yoweri Museveni of Uganda ordered the conclusion of a deal between shipping lines and insurers to end the costly and inconvenient bonds. “The Summit directed ministers responsible for Finance and Trade to ensure that shipping lines and insurance companies finalise and sign an agreement on elimination of cash deposits for containers,” the leaders said in a joint communique at the close of a regional infrastructure meeting in Kampala at the weekend. Since containers are expensive, shipping lines servicing developing markets such as east Africa routinely demand cash deposits before releasing containers to consignors or freight forwarders. Shipping line agents charge $500(Sh50,000) and $1,000(Sh100,000) for 20 foot and 40 foot containers respectively for cargo destined for Kenya, while those on transit are charged $1,000(Sh100,000) up to $5,000(Sh500,000) for 20 foot and 40 foot containers respectively. Typically a new standard 20-foot container can cost above $3,000 (Sh300, 000) while a standard 40 foot may cost more than $4000(Sh400, 000), estimates by the United Nations Economic and Social Council showed. Container deposit is often not required in developed economies due to high level of professionalism and industrial competency among all players in the supply chain such as consignors, freight forwarders, haulers, warehousing operators and shipping liners. This is further supported by the fact that most developed markets have proper legal environments. “However, in some developing economies, there are higher risks of containers being stolen, damaged, abandoned or detained for prolonged periods. Ship liners impose container...

Mr Job Kemboi, the general manager Siginon Global Logistics says once the new line is completed, there will be need for more freight trucks to transport cargo from different railway stations to their final destinations, hence the move to expand its fleet. Mr Kemboi said contrary to the notion that the presence of SGR will spell doom to road transporters, the commissioning of the modern railway will create a booming business for logistics firms in Kenya. “There will be increased demand for road transport for our customers who are located inland, away from the Northern Corridor who will still need our services. We are confident that the SGR is a partner and not a threat to road transporters,” said Mr Kemboi. Recently, the Cabinet approved the expansion and modernisation of the inland container depot (ICD) in Embakasi and development of access roads ahead of an expected upsurge of cargo traffic when the new railway becomes operational. The depot marked for upgrade is located in Industrial Area, Nairobi and occupies 29 hectares. It has a stacking area designed to accommodate a throughput of more than 180,000 Twenty-foot Equivalent Units (TEUs) per annum. Mr Kemboi said that currently, the Kenyan transport industry consists of approximately 15,000 trucks that are at times overwhelmed by the amount of cargo discharged at the port of Mombasa for onward road transportation to serve customers along the Northern corridor and the hinterland. The SGR is expected to provide an advantage of fast and efficient cargo movement cutting...

Kenya Association of Manufacturers has signed a Memorandum of Understanding with a regional trade agency to promote trade and investment for expansion of markets for local goods. The manufacturers lobby group signed the MoU with USAID-funded East Africa Trade And Investment Hub to aid in the efforts to support policy reform activities and expansion of trading avenues especially under the African Growth and Opportunity Act. “AGOA offers great opportunities for our local businesses especially the SMEs. It is essential we build their capacity to enable them leverage this partnership to realise financial sustainability for their businesses," said KAM chief executive Phyllis Wakiaga. "Beyond this we are also looking to diversify our exports through this partnership and increase competitiveness of various agricultural value chains.” Following the MoU signing, KAM will be organising and hosting trade delegations, policy and investment promotion activities that will attract investment in the mutual priority sectors which include textile and garment, leather and leather products, agro processing, horticulture, ICT and cotton. Kenya Association of Manufacturers has signed a Memorandum of Understanding with a regional trade agency to promote trade and investment for expansion of markets for local goods. The manufacturers lobby group signed the MoU with USAID-funded East Africa Trade And Investment Hub to aid in the efforts to support policy reform activities and expansion of trading avenues especially under the African Growth and Opportunity Act. “AGOA offers great opportunities for our local businesses especially the SMEs. It is essential we build their capacity to enable them...

Rail projects proposed or under way on the southern continent will cost an estimated $60 billion. Railway projects totaling more than $60 billion are proposed or under way in sub-Saharan Africa. That estimate comes from Terrapin, which is organizing a major rail conference June 28-29 in Johannesburg. According to Terrapinn, projects in Uganda, Namibia, Batswana, Mali, and Nigeria have the largest budgets, ranging from $8 billion up to nearly $14 billion each. One massive project is a 3,000-kilometer rail line that will link Benin, Burkina Faso, Niger, Ivory Coast, Nigeria, Togo and Ghana. These nations and mining companies that operate within them are funding the project as the mining industry seeks to increase mineral exports from 109,000 tons a year to 3.4 million tons in 2020, a 30-fold increase. Without rail network, transport expensive The lack of a cross-border rail network has made transport expensive, especially in land-locked countries such as Niger, which derives 11 percent of its gross domestic product from mining, and Burkina Faso, which derives 13 percent of GDP from mining. The rail network also is expected to boost trade among the linked nations and drive economic development in other sectors. Nigeria also has ambitious plans for domestic rail lines, including one linking Lagos and Kano and another between Lagos and Calabar along the coast. Both were designed to ease commuter congestion and facilitate transport of goods. However, plans were thrown into doubt in April when the Nigerian National Assembly removed $300 million in funding for the...

Farm Africa has received a new £3 million grant from the UK Government, through the FoodTrade East and Southern Africa trade enhancement and promotion programme. The grant will support 70,000 smallholder grain farmers in Tanzania and Uganda to gain access to regional export markets. The farmers will be linked to buyers in East Africa using an innovative online trading platform, G-Soko*, and other market interventions. While Tanzania and Uganda produce a surplus of staple foods, Kenya only grows enough maize to feed itself one year in every five. Until recently, high tariffs on trade within East Africa meant that it was cheaper for Kenya to import crops from outside Africa. Recent policy developments have helped reduce the barriers to regional trade. The promotion of trade within East Africa is a significant step towards strengthening food security, and creates opportunities for smallholder farmers in these countries to access new markets. Smallholders grow around 80-90% of the staple crops consumed in East Africa, but many face difficulties accessing markets. Bigger businesses aren’t interested in purchasing produce from individual farmers growing small amounts. Small-scale farmers are also disadvantaged by the relatively high cost of inputs such as improved seeds and fertilisers and many have nowhere to store their produce so are unable to wait for a better market price for their crops. To help farmers capitalise on these opportunities, Farm Africa and consortium partners VECO East Africa and Rural Urban Development Initiatives will help Tanzanian and Ugandan smallholders to store their surpluses of rice,...

Over last five years, the cost of doing business and the time taken to get goods cleared and transported in the region went down significantly, the Evaluation Report by the multi-donor organisation says. The cost of transporting a standard 40-foot container from Mombasa to Kigali went down by Sh107,000 ($1,700) from Sh650,000 ($6,500) in 2011 to Sh480,000 ($4,800) in 2015. Transporters and businesses have saved Sh700 million ($7 million) on the Mombasa-Kigali route alone within the timeline, says the report. Time taken to export goods from each country in the region has reduced by 20 per cent to 26 days from the previous average time of 33 days while time taken to import goods from each country in the region also went down by 14 per cent to 31 days. NTBs are trade barriers arising from rules and regulations that are poorly designed or implemented. According to the report, the trade barriers can be intentional or unintentional. It is estimated that in 2010 trade barriers led to a cost of Sh4.9 billion ($490) million in the region. Frank Matsaert, CEO, TradeMark Africa (TMA), said that a reduction of these barriers will invariably lead to more trade in the region, which is ultimately TradeMark’s goal, of growing prosperity through trade. Burundi reduced the time taken to import goods from 43 to 60 days, the highest performance in the region. Tanzania experienced a 99 per cent reduced time (from five days to one hour) in application and processing of the Electronic Certificates...

After formally bagging the new oil pipeline from the Ugandan oilfields through Tanzania to the port of Tanga, more good news emerged for Tanzania. The proposed railway extension from the inland dry port of Isaka to Kigali and Bujumbura will be built after all, providing a safe, faster, and much more economical link to the Indian Ocean port of Dar es Salaam. While Uganda's decision to route the pipeline, entirely financed by Total of France to the tune of well over US$4 billion, pulled the rug from underneath Kenya's plans to have a joined pipeline crossing their own oil fields, Rwanda's decision to push ahead with the central corridor railway line to Dar es Salaam may have done a similar thing to Uganda as the future of the Standard Gauge Railway from Kampala to Kigali is suddenly once more in doubt. Two major railway lines may provide redundancy but at a cost which may be prohibitive, and going the Isaka - Dar es Salaam way may yet prove the ultimate challenge for the Rwandan SGR link via Uganda and Nairobi to the port of Mombasa. Tanzanian officials dealing with the railway project appear to have confirmed the determination of the partner countries to go ahead and even finance the remaining consultancy reports jointly, a nd to then launch procurement and actual construction by mid-2017. The existing narrow gauge railway line from Dar es Salaam to Isaka will, according to the same sources, not be materially refurbished, but a new SGR...

The Democratic Republic of Congo (DRC) has expressed strong commitment to joining the multi-billion Standard Gauge Railway-SGR project, a statement attributed to President Joseph Kabila indicated.In the statement seen by APA on Monday, President Kabila said a leap forward has been taken to that effect with a proposal already before the DRC parliament for ratification. Kabila’s position was made know in a speech on his behalf by Jean Pierre Massala, the Charge d’Affaires of the DRC to Uganda at the 13th Northern Corridor Integration Projects Summit-NCIP in Kampala over the weekend. The project will see the construction of a modern, high-capacity railway system stretching from the Port of Mombasa in Kenya, through Nairobi to Kampala-Uganda, Kigali-Rwanda and Juba-South Sudan. The four East African countries agreed to use a uniform standard specification although each country will construct its sections. DRC first hinted on the possibility of joining the SGR project during the 11th summit held in Nairobi, Kenya. Sections of the Ugandan stretch of the SGR line from Pakwach will go through Goli Customs in Nebbi District and Vurra Customs in Arua District. Both customs are vital entry points into northeastern DRC. Kabila said his country has already made an international call for feasibility studies on the SGR and expressed optimism that by the end of May the company to conduct the study would be selected. He assured the Summit that the DRC is interested in the initiative which aims at developing the whole region. The SGR project is costing billions...