Established in 2018, the African Continental Free Trade Area (AfCFTA) represents perhaps Africa’s biggest opportunity for the next few decades in its battle against poverty of all forms; energy and infrastructure included. Against the backdrop of the tens of millions of Africans that have been plunged into extreme poverty by the onslaught of the covid-19 Pandemic, a strong case must be made for a speedy implementation of the African Continental Free Trade Area. It is projected that under the AfCFTA, extreme poverty will significantly decline across the continent. West Africa, for instance, would witness the biggest decline in the number of people living in extreme poverty; namely a decline of approximately 12 million people, which is more than a third of the total for all of Africa. But beyond extreme poverty eradication, it’s about time that the true economic might of Africa is realised through intra-African trade. Compared with Asia and Europe with 59% and 68% intra-continental trade, only 17% of exports from African countries are intra-continental (World Economic Forum), due to age-long tariff and non-tariff barriers, which the AfCFTA is essentially established to eliminate. The fact that intra-African trade constitutes only about 2% of global trade means there are significant gains to be realised if the AfCFTA is properly implemented. A continent that controls vast resources and a 1.2 billion-strong consumer market should be an economic no-brainer of a success, especially considering its young burgeoning and vibrant population. The African socio-economic and political construct under the AfCFTA dispensation must...

This article is brought to you thanks to the collaboration of The European Sting with the World Economic Forum. About the author: Ratnakar Adhikari, Executive Director, Enhanced Integrated Framework (EIF) & Taffere Tesfachew, Acting Managing Director, UN Technology Bank for Least Developed Countries Limited use of technology is inhibiting LDCs’ path towards structural transformation. These countries can implement measures in several areas to build their technological capacity. Innovative approaches to resource mobilization should be explored to fund such transition. Structural transformation is the process of moving resources from low productivity to higher productivity and skill-intensive sectors, thereby setting development and economic catch-up into motion. While many countries have achieved structural transformation in a matter of decades, the least developed countries (LDCs) have been notoriously slow in this respect. One of the factors for this lack of structural transformation is LDCs’ overwhelming dependence on commodities for production and exports. According to the United Nations Conference on Trade and Development’s Commodities and Development Report 2021, over 75% of African LDCs depend on commodity production for over half of their export earnings, though Asian LDCs have a relatively diversified export basket. The report also suggests that it is extremely challenging to move away from the trap of commodity dependence and attain structural transformation. Fortunately, a combination of technology and global integration can help countries on this path. When it comes to technological advancement and its effective use, the LDCs are at the lower end of the ladder. According to the World Intellectual Property Organization (WIPO)’s Global Innovation Index 2021, which monitors the state of technological...

East African Community Headquarters, Arusha, Tanzania, 15th January, 2022: The Republic of Uganda has agreed to double the number of health officers at the Busia and Malaba borders posts, from 50 to 100, as part of efforts to clear the backlog of trucks at the border posts. The Republic of Kenya, on her part, informed the 3rd Joint Multi-Sectoral Virtual Meeting of Ministers of EAC Affairs, Health and Transport held on Friday of the availability of sufficient Covid-19 rapid diagnostic test (RDT) kits and staff to support Uganda in Covid-19 testing at the border posts. Kenya affirmed readiness to immediately deploy 15 or more health workers and provide RDT test kits to enhance Covid-19 testing at Malaba and Busia border posts. Uganda also committed to recognizing the Covid-19 test certificate that shall be issued by Kenya’s Ministry of Health with a validity period of 72 hours using either PCR or RDT testing protocols. The meeting that was chaired by Kenya’s Cabinet Secretary for EAC and Regional Development, Hon. Adan Mohamed underscored the need to minimize administrative delays to enhance rapid clearance of the existing backlog at Malaba and Busia borders. They noted that the current trend of clearing truck drivers was not sufficient to clear the truck backlog. The Cabinet Secretaries/Ministers commended the Republic of Uganda for progress made in implementing the directives made on 10th January, 2022 and urged Uganda to increase her capacity of testing truck drivers to facilitate faster clearance of goods. The meeting urged the Republic of Kenya to support the...

While generally acceptable to the URA that transportation income by non-resident transporters is chargeable to tax in Uganda to the extent the outbound delivery of cargo commences from Uganda, the URA also seeks to tax non-resident transporters freight income on the inbound delivery of cargo from abroad. 1. Introduction In March 2021, Uganda’s Tax Appeals Tribunal (“Tribunal”) ruled in favor of the Uganda Revenue Authority (“URA”) collecting withholding tax (“WHT”) at the rate of 15% on freight payments to non-resident transporters for cargo deliveries into Uganda from abroad. Though this decision did not initially attract much public attention, there are now growing concerns especially as Uganda gears up for the development phase of its crude oil discoveries that the prevalent enforcement of this WHT imposition will make Uganda a less competitive destination for doing business as this article highlights. 2. Contention with the law The decision of the Tribunal notwithstanding, it is still far from settled whether WHT should apply on freight payments to non-resident transporters with both the taxpayers and the URA holding starkly divergent positions. The taxpayers argue that there are specific provisions under section 86 of the Income Tax Act (“ITA”) that deal with the taxation of non-resident transporters in Uganda. Pursuant to section 86 of the ITA, transportation income earned by non-resident transporters is subject to taxation in Uganda via the withholding tax mechanism only if it relates to the delivery of cargo that has embarked, boarded or originated from Uganda. By implication, therefore, it is...

The Democratic Republic of Congo (DRC) has reaffirmed her willingness to join the East African Community. DRC’s Deputy Prime Minister and Minister for Foreign Affairs, Christophe Lutundula Apala Pen’Apala, said that DRC was looking forward to increased trade and investment, and strengthened relations with EAC, adding that her relations with EAC Partner States had largely been at a bilateral level. Pen’Apala said that DRC was keen on cooperating with the EAC for maximum exploitation of both natural and human resources in the region. Pen’Apala expressed hope that this would be the last round of negotiations before DRC is admitted into the EAC. The Minister said that DRC has a big population who are consumers that constitute a big market for the EAC, adding that DRC was also in dire need of investors and was therefore offering incentives for entrepreneurs who would like to invest in the country. Pen’Apala noted that DRC faces security challenges in the eastern part of the country, adding that the country was therefore keen on tackling these challenges together with the EAC. The Minister disclosed that DRC had embarked on a national programme of reconstruction in various sectors including infrastructure, agriculture, energy and environmental conservation. He said that DRC had the world’s second largest natural ecosystem in the Congo Forest and was keen on preserving this system from wanton destruction to mitigate the effects of climate change. Asked whether DRC’s membership to EAC would pose challenges because it already belongs to COMESA and SADC, Pen’Apala said...

Summary According to December 2021 reports by the Ministry of Agriculture, prices for maize grains are fluctuating and are fetching different prices at local markets across the country. The National Bureau of Statistics shows that a 100-kg bag of maize now costs between $23.9 and $39.1, with the northern regions of Arusha, Kilimanjaro, Tanga and Manyara affected. According to the Bank of Tanzania, the country’s demand for maize stands at 5.4 million tonnes per year, with a surplus of 810,760 tonnes. Drought and poor harvest have disrupted Tanzania’s supply of maize, pushing up the price of the commodity. According to December 2021 reports by the Ministry of Agriculture, prices for maize grains are fluctuating and are fetching different prices at local markets across the country. The National Bureau of Statistics shows that a 100-kg bag of maize now costs between $23.9 and $39.1, with the northern regions of Arusha, Kilimanjaro, Tanga and Manyara affected. Last week, maize millers increased the wholesale price codes for a bag of maize flour weighing 25kg from $7.8 to $10.8. In most shops a one-kilogramme packet of maize flour was going for between $0.6 and $0.65. The packet previously cost between $0.43 and $0.52. The ministerial report shows that despite the country facing a maize shortage. Its food situation remains stable. "Tanzania has enough food stock," Agriculture Minister Hussein Bashe said. According to the Bank of Tanzania, the country’s demand for maize stands at 5.4 million tonnes per year, with a surplus of 810,760 tonnes....

Summary Uganda, Rwanda and Burundi have adopted the EACPass, while Kenya, Tanzania and South Sudan are yet to adopt it. The implementation of the EACPass is taking place at a time when traffic snarl ups have been experienced at the Kenya-Uganda border, reminiscent of the early pandemic days when countries had imposed contentious Covid-19 test charges. The EACPass works by consolidating the results of all travellers undertaking mandatory testing in accredited labs in each partner state. As the rest of the world comes up with regulations to bring back travel, the East African Community is stepping up too, with Uganda, Rwanda and Burundi adopting the EACPass. This is a Covid-19 authentication pass for the bloc's citizens, meant to ease travel across the region’s internal borders. The three countries are already accepting the health document. Kenya, Tanzania and South Sudan are yet to adopt it. The implementation of the EACPass is taking place at a time when traffic snarl ups have been experienced at the Kenya-Uganda border, reminiscent of the early pandemic days when countries had imposed contentious Covid-19 test charges. The Pass will, however, also ease leisure travel and remove confusion in EAC citizens on what is required to travel regionally as tourism opens up. EAC Secretary-General Peter Mathuki said, “Other partner states are finalising the internal processes to start the piloting of the same.” The economic bloc has been at the forefront of pushing for harmonising of travel regulations. “Harmonisation of Covid-19 charges and co-ordinated waiting time for Covid-19 results...

Uganda and Tanzania have finally agreed to remove all non-tariff barriers to spur bilateral trade, Chimp Corps report. According to bilateral trade figures of the year 2021, Tanzania’s exports to Uganda hit the $1bn mark from about $200m in 2018. Uganda’s exports to Tanzania in the same year reduced to $122m. Uganda’s trade volumes were affected by the non-tariff barriers imposed by Tanzania including restrictions on exports such as sugar, milk and movement on Ugandan trucks. For example, Ugandan trucks entering Tanzania are charged road user fees of up to $500 from Mutukula border to Dar es Salaam. Yet, Tanzania charges a flat road user fee of $152 for trucks from other countries entering Dar es Salaam in the region. During today’s Joint Permanent Commission (JPC) held at Kampala Sheraton Hotel in Kampala, Tanzania said the matter should be fast tracked with the process of harmonization of road user fees in EAC secretariat. Delegates from Tanzania and their Ugandans counterparts listen to speeches at the function Uganda says earlier decisions to have a flat rate for its trucks should be considered by Tanzania. Speaking at the JPC, Uganda’s Foreign Affairs Minister Jeje Odongo, said he was “delighted to learn that both delegations have heeded to the call by our two Heads of State to work together to eliminate all Non-Tariff Barriers to facilitate trade between our two countries. Trade is an important element for our mutual growth and prosperity.” He added: “It’s also good that the two sides have agreed...

The Covid-19 pandemic has devastated the travel and tourism sector across the world, with economies that heavily rely on the industry suffering the most. According to official figures, economies in the East African Community have lost up to 92 per cent of tourism revenue, with tourist arrivals dropping by a whopping 4.73 million. This has not only resulted in a significant fall in proceeds from the sector for Rwanda and the other five partner states, but it has also led to widespread job cuts and business failures. And the longer the Covid-related travel restrictions last the harder it will be for the sector to return to its pre-pandemic levels. However, economies have had to look inwards to help save the industry, with a particular emphasis on domestic tourism as local restrictions start to ease up. In the same way Covid-19 vaccine nationalism has taught us that you cannot rely on the goodwill of others to protect the lives of your citizens, so have we learnt that you cannot depend on foreign arrivals to grow your tourism sector. This makes the case for domestic tourism more compelling than ever. For a few years now, Rwanda has been promoting domestic tourism as a major, rolling out different pocket-friendly packages for nationals to visit various destinations across the country. This is part of a broader effort to take tourism to another level, with the sector emerging as a major contributor to the economy in the years leading up to the pandemic. Indeed, creativity...

Summary For the first time since officially coming to power, Burundi’s President Evariste Ndayishimiye sent his Minister in Charge of EAC Affairs, Youth, Culture and Sports, Ezéchiel Nibigira, to Rwanda. The deliberations were not made public, but Rwanda announced that President Paul Kagame received the delegation and held discussions that focused on strengthening bilateral relations. The latest development, which came against the backdrop of meetings held between both countries’ political and security officials, was widely viewed as a positive move towards normalising relations. The appeasement between Rwanda and Burundi heads of state last week has signalled yet another step towards thawing of the two countries’ seven-year strained relations. For the first time since officially coming to power, Burundi’s President Evariste Ndayishimiye sent his Minister in Charge of EAC Affairs, Youth, Culture and Sports, Ezéchiel Nibigira, to Rwanda. The deliberations were not made public, but Rwanda announced that President Paul Kagame received the delegation and held discussions that focused on strengthening bilateral relations. The two countries’ diplomatic relations turned sour in 2015 when former president Pierre Nkurunziza’s regime accused Rwanda of supporting its opponents and providing refuge to individuals behind the failed coup. The latest development, which came against the backdrop of meetings held between both countries’ political and security officials, was widely viewed as a positive move towards normalising relations. Years of disputes had led to the closure of common borders in 2015, causing the collapse of cross-border communities’ trade and businesses. Restoration “I am expecting that relations will improve...