ARUSHA, TANZANIA – The race and direction of the proposed route of the oil pipeline from Uganda to the Indian Ocean took a new turn last week with President Uhuru Kenyatta hosting President Yoweri Museveni in Nairobi for the alternative oil pipeline route. However, the one day meeting, in which the officials from the main oil companies were invited over the Kenya’s preferred northern route through Lokichar, part of Lamu port, South Sudan, Ethiopia transport (Lappset) project, failed to agree on the route. They agreed to meet again in Kampala in two weeks while officials try to “harmonize” their views. Tanzania does not have any oil reserves, but its president, John Magufuli, is keen to win the pipeline, partly because his own country is warming up to develop its own extensive gas reserves. A route through Tanzania would deliver over 15,000 jobs during the construction. Some Tanzania energy analysts, however, say the Tanzanian route is more stable for the future, given its political stability, and far from the Somalia border which has remained problematic for Kenyan security over the recent years and yet the future is still uncertain with the Somalia struggling to put a working government in place. An economist based in Arusha, Shadrack Mapalala cited the 2007 Kenya post-election violence during which part of the railway to Uganda was threatened. Different goal positions between the main oil companies involved in the $4 billion pipeline project — Total of France, Tullow Oil of the UK and China’s Cnooc —...

ON a continent where nearly 90% of international trade happens by sea, several African ports are in the race to be their respective regional shipping hubs - and for one ambitious city – Kigali – the ambition to be a logistics hub isn’t the preserve of coastal ports. Lack of infrastructure and long ship waiting times continue to hamper productivity for the African maritime sector, but a wave of new investments look set to drive growth over the medium term, according to a new report from research consultancy SeaIntel. The upgrades come as the global economy slowdown sends jitters through the shipping industry. Overall confidence levels in the shipping industry fell to a record low in the three months to February 2016, according to the latest Shipping Confidence Survey from shipping adviser Moore Stephens. Of particular concern was the shrinking dry bulk market as less cargo is transported across regions. That has now led to an overcapacity problem, which is expected to lead to “price-cutting and eventually to financial difficulties for the weakest, the least well-prepared, or sometimes simply the unluckiest,” said Richard Greiner, Moore Stephens Partner, Shipping Industry Group. “Shipping has had its share of bankruptcies, foreclosures and restructurings during the past few years, and it is likely that we will see more over the coming months, with negotiations doubtless enlivened by the fact that shipping’s purse-strings today are often controlled by an intriguing mix of private equity and traditional shipping finance,” he added. Ramping up Still, Africa is...

The state-owned rail giant China Communications Construction Company (CCCC) has signed a major agreement to build a $1.5bn section of standard gauge railway linking Kenya to landlocked neighbours Uganda and Rwanda. Approved by the Kenyan government, the deal sees CCCC building a 349-km railway between Navaisha, north of the capital Nairobi, northwest to Malaba on the border with Uganda. The section is part of a bigger plan to link the border town of Malaba through Nairobi to Kenya’s main port of Mombasa. Another Chinese company, China Road and Bridge Corporation, began building the link between Mombasa and Nairobi in December 2014. The even grander scheme is eventually to build a standard gauge rail link from Malaba over the top of Lake Victoria to Kampala in Uganda and onwards to Kigali in Rwanda, giving these countries access to Mombasa port, although Uganda and Rwanda will be responsible for their sections of the railway. The new network is hoped to speed the flow of people and goods between the countries. Malaba has been a bottleneck between Kenya and Uganda, with trucks having to queue for days to cross (pictured) before a new checkpoint opened this year. Four contracts signed with CCCC cover two sections of the Naivasha-Malaba line, plus the modernisation of Kisumu Port on Lake Victoria and the expansion of the Inland Container Depot at Embakasi in Nairobi, local media reported. The deal also secures a loan for the Kenyan Government to finance the building of the Navaisha-Nairobi section, and construction...

Africa could see the emergence of a number of new bunkering hot spots, as ports across the continent vie to become new regional logistics hubs. "A variety of challenges exist, from structural congestion in African ports located in conurbations with limited road and rail infrastructure, to poor customs procedures, security concerns, poor dredging programmes, and industrial actions," said Victor Shieh, SeaIntel's Editor-in-Chief. In East Africa, Kenya and Tanzania are said to be in competition to become the region's major port, with Kenya aiming to upgrade its Mombasa port in order to improve efficiency, and Tanzania having begun construction of port in Bagamoyo in October, which is said to be set to become East Africa's largest port - expected to handle double the capacity of the more southern port of Dar es Salaam. Meanwhile, the West African port of Lome in Togo is reported to have made a number of improvements in both capacity and efficiency that have significantly boosted transhipment traffic in the region over the past year, with the Mediterranean Shipping Company S.A. (MSC) having launched a service of 11 ships in January from the port on a circuit to Asia. Cameroon is building Central Africa's only deep sea port at Kribi, said to be intended to replace its current major port of Douala, which has been described by local media as being notoriously inefficient. Further, Gabon is reported to have begun construction in 2013 to improve one of its two major ports, Owendo, adding a new 500 metre...

TANZANIA is highly optimistic of striking an agreement with Uganda over construction of the 1,410-kilometre crude oil pipeline from Hoima, given the former’s competitive advantage. It is against this backdrop that the country is sending a delegation of 40 businesspersons to Uganda to discuss business opportunities aligned to the ambitious project with government officials in Kampala. “We understand that there is a competition from some of our neighbours to implement the project. But we are 98 per cent sure of striking a deal,” the Permanent Secretary in the Ministry of Energy and Minerals, Professor Justin Ntalikwa, told reporters in Dar es Salaam. Neighbouring Kenya is as well competing with Tanzania to execute the project. It wants the pipeline to be channeled from Hoima to its oilfields in Loikchar, Northern Kenya, to yet-to-be constructed Lamu Port. “Tanzania boasts of conducive environment to lay out the pipeline and this gives us a competitive advantage compared to the Kenyan route. It will be less costly to use the Tanga port,” Prof Ntalikwa boasted. The PS went on to point to the fact that Tanzania is more stable and secure with vast know-how in implementation of pipeline projects. This includes the 1,710-km Tanzania-Zambia pipeline (Tazama), which was commissioned in 1968 to transport crude oil from the Dar es Salaam Port in Tanzania to Ndola in Zambia as well as the 542-km pipeline from Mtwara to Dar es Salaam, which was launched last year to convey natural gas. Other projects include a conduit from Songo...

Jubaland in southern Somalia is emerging as the success story in the African Union’s effort to pacify the country that has been experiencing conflict for 25 years. The region, with its capital in the coastal town of Kismayu, has seen a rare success in reintegration into the society of former militias who are working closely with African Union Mission in Somalia (Amisom) to neutralise Al Shabaab militants. Kismayu is free from the security threats that are experienced in Mogadishu even though Al Shabaab is still perched just away across Juba River in Middle Juba region as leaders continue debating the complete elimination of the militants from Jubaland. Residents go about their business as if oblivious of the Al Shabaab threat with the local administration embarking on building of roads and schools since Amisom liberated Kismayu from Al Shabaab in October 2012. But Jubaland administration president Ahmed Mohamed Islam, commonly known as Sheikh Madobe, is becoming increasingly impatient and wants an all-out war against Al Shabaab while Amisom is pushing for gradual elimination given that the African Union force lacks sufficient troops and airpower for the final showdown. In an exclusive interview with The EastAfrican in Kismayu, Sheikh Madobe expressed concern that Amisom under the direction of the international community is too cautious in its approach to Al Shabaab while the Somali National Army (SNA) is too small to secure the liberated areas. Crucial bridges “If given the go ahead, I would move to liberate the four crucial bridges under the...

In a move likely to signal a shift to the standard gauge railway (SGR) later next year, Kenya has invited bids for an adviser to help identify an operator for its new rail network that is set for completion in mid-2017. The 472km railway line is expected to carry freight trains at speeds of up to 80kph, and passenger trains at up to 120kph. It will run from the port in Mombasa to Nairobi then to Malaba, and then on to Kampala, Uganda and eventually to Kigali, Rwanda. “The transaction adviser will recommend the appropriate operating model for the railway which will then inform the procurement of the operator,” Kenya Railways said in a newspaper advertisement. This comes barely days after Kenya said it was in discussion over the funding of the last link of the SGR between Naivasha and Malaba after the Cabinet last week approved its extension. “Cabinet approved the development of the Naivasha-Kisumu/Malaba SGR project, which is Phase II of the Mombasa-Kisumu/Malaba SGR; the project will be financed on a government-to-government (G-to-G) arrangement in which Kenya Railways Corporation (KRC), and China Communications Construction (CCCC) will sign the commercial contract,” the State House said. Kenya Railways Managing Director Atanas Maina said that they were in talks about funding for the remaining stretch of the standard-gauge railway. “With the Cabinet approval, we expect to commence talks that will see us agree on the amount. We also expect to start work on a link between Nairobi and Naivasha by December...

THE government is determined to address the challenges in doing business in Tanzania in efforts to improve the business environment that will promote trade and investments in the country. Speaking at the launch of TradeMark Africa in Dar es Salaam on Tuesday evening, the Permanent Secretary (PS) in the Ministry of Industry, Trade and Investment, Prof Adolf Mkenda, the government would continue with key reforms to remove hurdles that undermine business in the country. He said the government valued TradeMark Africa support to enhance trade and would tackle the challenges identified so as to promote access to market, enhance trade environment and improve business competitiveness of the country. “We are willing to listen and share with you our dreams and aspirations,” he said at the launching of the report of the multi-donor funded aid for trade agency. Prof Mkenda said addressing the challenges in doing business was top in agenda for government action in efforts to improve the business environment will help create a foundation for sustained and inclusive economic growth and prosperity as pledged by President John Magufuli during his election campaign. “President Magufuli acknowledged that there were too many hurdles. He made commitment to open up space for trade,” he said. TradeMark Africa is supporting Tanzania to boost prosperity through trade, various projects including a port modernisation of eleven deep water berths and the rehabilitation and upgrading of port access roads at the Dar Port, which will significantly increase port access, especially for larger, modern vessels, while improving...

The adoption of the Electronic Single Window system (eSW) provides the key to simplifying cross-border trade and the enhancement of real-time information sharing and exchange between customs and other border agencies and private sector stakeholders. It has also enhanced Rwanda’s competitive advantage as an efficient player in the area of trade. The Electronic Single Window was launched in 2012 in partnership with TradeMark Africa (TMA). The implementation of a single window system has enabled the business community to submit documents to different regulatory agencies through a single point compared to the previous cumbersome and time-consuming practice where they had to move from one place to another. Such documents include customs declarations, applications for import/export permits, and certificates of origin. The single window facilitates international trade by expediting and simplifying information flow between the private sector and the regulatory government institutions, thereby reducing time and cost of doing business. Richard Tusabe, the Commissioner General of Rwanda Revenue Authority says: “As we continue to streamline the Electronic Single Window operations, we look forward to contributing to a reduction of our poverty levels from 45 per cent as at 2012 and high dependency on foreign aid through cross-border trade, competitiveness and entrepreneurship and the promotion of regional economic cooperation.” Following the roll out of the system in 2014, cargo clearance time through customs was reduced by over 85 per cent from 11 days to just over one day, and the cost of clearance of goods fell by the same percentage from Rwf30,000 to...

The outgoing secretary general of the East African Community, Dr Richard Sezibera, has expressed his appreciation for the support he has received from development partners, noting that the EAC Partnership Fund was more than a monetary support. He was speaking in Dar es Salaam mid this week at the fourth High-Level Dialogue of the EAC Partnership Fund. The dialogue was co-chaired by the Norwegian Ambassador, Hanne Kaarstad, and the EAC secretary general and attended by heads of diplomatic missions accredited to the EAC as well as members the EAC Partnership Fund. “The Partnership Fund is a forum for dialogue and creates avenues for discussing key integration issues and mobilising political support for EAC regional integration,” added Dr Sezibera, who also noted the positive growth of the fund since 2011. He called on development partners to honour their pledges through actualising pending disbursements which currently stand at 24 per cent for the financial year 2015/16. The outgoing EAC chief underscored the importance of the basket fund to the EAC, noting the significant support the Partnership Fund had given to the bloc, including financial support to the implementation of the Customs Union and Common Market Protocols; Private Sector development; finalization of the One-Stop Border Post regulations; negotiations and finalization of the EAC Monetary Union Protocol; institutional strengthening including the EAC Institutional Review; enhancing public awareness of the EAC; and development of EAC Vision 2050 among many other projects that have been completed or were currently ongoing. The secretary general further disclosed to...