The African Development Bank (AfDB) has approved a US$228mn loan to the government of Kenya. The financing will go towards rehabilitating a 172 km road between Kenya and Tanzania. The renovation of this route, to be undertaken between 2016 and 2019, will facilitate trade between the two neighbouring countries, halving the travel time and transports costs between the border towns of Isebania (Tanzania) and Ahero (Kenya), southeast of Lake Victoria. The road forms part of the Sirari corridor, a major trade and transit route linking Tanzania, Kenya and South Sudan’s major ports. Once completed, the road in expected to facilitate local and international trade, opening up new markets particularly for the agri-business and fishing industries. “Lower transport costs will ensure that a greater share of the price of exported goods accrues to producers, thereby increasing incomes and reducing poverty,” says Amadou Oumarou, director of the transport and information and communications technology department at the AfDB. The strengthening of public transport is also part of the project, with the AfDB also financing the construction of three bus stations to further facilitate the movement of people in the region. Kenya and Tanzania are both part of the East African Community (EAC), of which they represent the biggest countries by geographic and economic size. Kenyan President Uhuru Kenyatta and President John Magufuli of Tanzania have pledged their commitment to reducing barriers to trade and integration in the EAC. The countries are working on a series of infrastructure projects to increase the ease of...

The U.S. trade deficit widened more than expected in February as a rebound in exports was offset by an increase in imports, the latest indication that economic growth weakened further in the first quarter. But the growth picture should brighten in the months ahead, with other data on Tuesday showing that activity in the vast services sector picked up in March as new orders rose strongly, and sustained strength in the labor market. "There are some green shoots appearing this spring in the economic data which makes us more confident that 2016 is going to be a good year after a step-down in expectations and hopes at the start of the year," said Chris Rupkey, chief economist at MUFG Union Bank in New York. The Commerce Department said the trade deficit increased 2.6 percent to $47.1 billion in February, worse than economists' forecasts for a reading of $46.2 billion. When adjusted for inflation, the shortfall rose to $63.3 billion, the largest since March last year, from $61.8 billion in January. That prompted economists to cut their first-quarter gross domestic product growth estimates by as much as half a percentage point to as low as a 0.4 percent annualized rate. They see trade subtracting at least seven-tenths of a percentage point from GDP growth in the first quarter, up from 0.14 point in the fourth quarter. The economy grew at a 1.4 percent rate in the final three months of 2015. Though the trade report joined data on consumer and business...

THE Dar es Salaam Port serves the growing economies of Burundi, Democratic Republic of Congo (DRC), Rwanda, Uganda, Zimbabwe and Zambia. These economies are said to fuel the port’s 14 per cent annual growth, but also caused congestion due to limited working area. The port is currently ranked second biggest in East Africa and fourth largest container port on Africa’s eastern seaboard after Djibouti, Durban, and Mombasa. Tanzania Port Authority (TPA), has undertaken an ambitious expansion project dubbed the Dar es Salaam Maritime Gateway Project to modernize and improve its service. However, the port growth that had experienced in recently years and ambitious expansion project might not materialise if a number of issues are not addressed. The first is the introduction of Value Added Tax (VAT), on transit goods for land locked countries which although it has not yet been enforced, it seems to have scared some port users from those countries. Dar es Salaam’s acting Port Manager, Hebel Mhanga said, for instance Zambia total cargo traffic in the first two months of this year, dropped by 47.6 per cent to 121 in comparison to the same period last year. In 2015, Dar port moved 1.9 million tonnes of Zambia’s cargo. This was equivalent to 34 per cent of potential business of 5.6 million tonnes to and from Lusaka. The figure makes Zambia the biggest Dar port user. “Thought VAT is yet to be enforced, it has scared importers to the extent they are using alternative ports in the region,”...

UK Export Finance, the British export credit agency on Tuesday signed a deal with the African Trade Insurance (ATI), which will see the latter offer UK exporters information about growing markets on the continent. As an ATI member, the export agency will now gain access to information about upcoming opportunities for British exporters, as well as local knowledge of firms and projects. ATI will also provide a platform to raise awareness among project sponsors and investors in African countries of the UKEF support available to Kenyan importers of UK goods and services. “A close partnership between ATI and UKEF will give African buyers and UK suppliers access to each other. “UKEF and ATI will be able to identify and promote real business opportunities where UK and African companies can work together, and to provide the local market knowledge needed to facilitate trade,” said ATI chief executive officer George Otieno, after the partnership signing. NEW BUSINESS OPPORTUNITIES British High Commissioner to Kenya Nic Hailey said the deal would help British firms single out and capitalise on new business opportunities in Kenya. “The UK is a global leader in many of the sectors for which Kenya has greatest demand including infrastructure, advanced engineering, energy, ICT and defence and security. In these and other specialist areas, UK expertise can help accelerate Kenya’s development and economic growth,” said Mr Hailey. Britain in February announced a Sh74 billion fund to help Kenyans import goods from the UK. UKEF, through the fund, would seek to help...

KAMPALA, UGANDA - 1.2 billion people currently live without access to electricity and more than 2.7 billion people are without clean cooking facilities. With over 95% of these people located either in sub-Saharan Africa or developing Asia, clearly there exists a vast gap which must be closed. But how? The 18th annual Africa Energy Forum (AEF) will take place from 22-24 June 2016, to try to uncover solutions to Africa’s energy deficit and present opportunities which will drive project investment on the continent, acting as a catalyst for economic development. AEF is the global investment meeting for Africa’s power, energy, infrastructure & industrial sectors, expected to welcome 1,000 investors, 500 public sector stakeholders, 300 technology providers, 270 developers and 70 countries in June later this year. Widely regarded as the most important networking event of the year for Africa’s energy community, global investors attend to collectively find solutions to the challenges currently limiting the development of Africa’s power sector. The conference will include country and regional focus sessions, panels on mergers & acquisitions, the impact of COP21 & COP22 on investment, off grid solutions, and discussions which will explore the relationship between Africa and countries such as the UK, USA and China. The Forum also features a buzzing exhibition of over 80 solution providers who supply to the African continent. 125 speakers have confirmed to date including several from the East Africa region, such as: Brigadier General Emeldah Chola, Permanent Secretary, Ministry of Energy and Water Development, Zambia, Benon Mutambi,...

The Economic Commission for Africa (ECA) has warned that the Economic Partnership Agreement (EPA) entered in October 2014 with the East African countries opens up the local market to competition from European products. “This deal might adversely affect Kenyan industries, however, through increased competition from the European Union,” reads the caution contained in a report compiled by the ECA. Kenya was forced to sign into the agreement after intense negotiation with its neighbours on what actual benefits it would have, when weighed against costs, which include dumping. Kenya is among 11 countries whose individual profiles were studied and compiled by the UN, and unveiled in the African Development Week, an ongoing conference in Addis Ababa. Under the agreement, Kenya and the other regional countries have enjoyed quota-free and duty-free market access in Europe. But in reciprocation, the EAC countries would gradually open up their markets to imports from the more developed nations within the European Union. It is the fear that the agreement would promote low-value exports that ECA is raising in its warning. “In fact, tariff cuts may undermine structural transformation if they provide greater incentives to export primary products with low value added rather than more sophisticated products such as manufactured goods,” the report authored by Pedro Martins and a team of economists, for the UN, reads. Kenya, unlike the other regional economies, is not ranked among the least development countries and its exports could therefore not qualify for preferential treatment in developed markets. President Uhuru Kenyatta reluctantly...

CHISHALA MUSONDA, Ndola THE Zambian and Malawian governments have shown interest to revive transportation of petroleum products using Tanzania-Zambia Railway Authority (Tazara) line. Malawi transports freight using Tazara from Dar-es-Salaam to Mbeya where they have a government-owned inland container depot and storage tanks for fuels. From Mbeya, the cargo is moved by road into Malawi. Company deputy managing director Betram Kiswaga said Tazara has improved its operations and increased cargo transportation in volume. This follows renewed confidence shown from its customer base following improvement in Tazara’s operations which confirms that it has now attained some levels of stability. Briefing the media recently, Dr Kiswaga said the authority has received positive response from key customers who have increased their monthly volumes of cargo transportation. “We have received renewed commitment and are expecting huge volumes of freight from customers that had lost confidence in Tazara including the Zambian and Malawian governments that will be resuming transportation of petroleum products using Tazara line,” he said. Tazara is determined to continue building on its achievements to raise its operation performance even higher even though it faces challenges. “The authority faces challenges, but we take these challenges as an inspiration and a motivation to every employee to work even harder to survive and turn around this great facility,” Dr Kiswaga said. In November, Tazara received 10 diesel-electric locomotives and 18 coaches and Dr Kiswaga said this will help improve operations for the company. The equipment was bought through the 15th Protocol of Economic and Technical...

The East African Community is leading in regional integration and free movement of goods and people on the continent. A new report unveiled at the ongoing African Development Week meeting at Addis Ababa indicated the cross-border movements were easiest between Kenya, Uganda, Rwanda, Burundi and Tanzania. EAC's leadership in integration, which identified various matrices including roaming costs and volume of trade, is a major indicator towards achieving the dream of a unified Africa by 2063. "Deeper regional integration means larger markets and industrialisation and productivity as part of value chains," said Erastus Mwencha, the deputy chairperson of the African Union Commission, adding: "It means talent mobility thanks to greater visa openness." Kenyan citizens, for instance, only need to produce their national identification documents to enter any of the countries in the bloc, while work permit requirements are minimal as the region works towards the dream of a common currency. A regional parliament made of 54 members, which has been sitting since November 2001, is charged with streamlining the respective country laws with the vision of the five-member community. Several firms have had their shares cross-listed at the various stock exchanges. Integration in the EAC was ranked ahead of the Southern African Development Community (SADC) bloc where Tanzania has a cross-membership. South Africa is the most developed economy in the trading bloc, and is naturally the biggest exporter into the 15-member community. Africa's largest bloc, the Community of Sahel–Saharan States (Cen-Sad), which draws membership from 27 countries in the northern part...

Africa, it is often said, is a continent that leapfrogs various intermediary stages of technology. From fixed to mobile telephony, Africa leapfrogged the usual phases of technological advancement. It does not come as a surprise, therefore, that on a global level, the East African Community is one of few regional blocs that have scrapped mobile roaming charges. And this is just the beginning. Introduced in October 2014, the One Network Area aims to harmonise tariffs on mobile voice calls, SMS and data transmission within the EAC. Today, roaming charges between Rwanda, Kenya and Uganda have been removed, making all mobile calls between the three countries local. This has led to a minimum 400 per cent increase in the volume of calls — a direct benefit to EAC citizens and African businesses operating across the region’s borders. Previously, making calls across the EAC was more expensive than calling Europe, America or Asia. The second phase of the ONA initiative is underway, with telecom operators revising SMS and data charges downwards. Rwanda began this process in August 2015, and the idea is to have a truly integrated regional bloc with all mobile telephony barriers removed. Compare this with older and more advanced regional blocs in the West or in Asia. The European Union for example, only recently voted new rules that will scrap mobile roaming charges — a reality that will happen in 2017. This has taken the EU almost a decade of negotiations and an interim cap on roaming charges is...

Kenya will start building a new offshore crude oil and refined fuel jetty in October. The jetty is expected to increase efficiency in delivery of imported refined fuel for Kenya’s domestic use and export to Uganda, Rwanda, Burundi and eastern Democratic Republic of Congo. The Kenya Ports Authority (KPA) plans to build the jetty near Dongo Kundu from October to December 2019 to handle larger tankers and relocate existing Kipevu Oil Terminal from Port Reitz. KPA head of procurement Yobesh Oyaro said Denmark-based Niras will supervise building of the new terminal to replace the existing facility near berth 19 container terminal. He said relocation from Port Reitz to an offshore site will to allow offloading of tankers with a capacity of 170,000 tonnes to improve port efficiency and meet the region’s growing demand for refined oil products. The new island terminal will have four berths capable of facilitating import as well as export of crude oil, heavy fuel oil, dual purpose kerosene, diesel and petrol. The terminal is expected to make Mombasa sea port a major trading hub. The terminal will have a crude oil pipeline connecting it with the Changamwe-based Kenya Petroleum Refineries Ltd (KPRL). Early production of waxy oil found in South Lokichar basin, is set to start in June 2017, entails use of the road to Eldoret and rail transport to KPRL in Mombasa for storage ready for export. The new island terminal will have four other pipelines to pump heavy fuel oil, dual purpose kerosene, diesel...