News Categories: EAC News

Green Shift in Kenya’s Horticulture: TradeMark Africa and National Horticulture Taskforce Forge Alliance for Sustainable Export Boost

TradeMark Africa (TMA) has signed a technical and financial support agreement with the National Horticulture Taskforce (NHT). The two partners committed to strengthen and sustain investments in Kenya's fresh produce exports. The agreement was signed as part of the EU-funded Business Environment and Export Enhancement Programme (BEEEP), which is among other areas supporting the transition of 50% of fresh produce exports from Kenya from air to sea-freight by the year 2030. The agreement was signed at an event which brought together stakeholders from the logistics sector to assess the state of agro logistics in Kenya and review development of Kenya’s Masterplan on the modal shift of fresh produce exports from air to sea freight. Kenya’s transitioning from airfreight to seafreight is not only an environmental choice but a vital economic advantage to secure its fresh produce exports, as supermarkets in the UK and Europe seek to diminish their climate footprint. Airfreighting from Kenya to Europe generates substantially higher greenhouse gases compared to sea freight (1 kilogramme of airfreighted green beans emits as much as 177 kilogrammes of sea freighted green beans). Part of the targeted initiatives by the NHT include building the capacity of producers of horticultural products to utilise sustainable processes including the use of renewable energy in farms, implementing various water conservation methods and transitioning exports of fresh produce from air freight to sea freight. Henriette Geiger, Ambassador of the European Union to Kenya said, “We are fully in support of the NHT as we transition the avocado, mango and vegetable value chains towards more sustainable production processes from farm to fork. This also aligns with our...

Landmark Infrastructure Project Strengthens Zambia-DRC Relations

President Hakainde Hichilema joined President Antoine Félix Tshisekedi of the Democratic Republic of Congo (DRC) to inaugurate the Kasomeno-Kasenga-Chalwe-Kabila-Mwenda Road. This monumental project, part of the One Stop Border Post initiative, also includes the construction of the Luapula River Bridge, cementing the strong bilateral relations between Zambia and the DRC. The Kasomeno-Mwenda Road Project signifies Zambia’s dedication to enhancing connectivity and economic integration in the region, while fostering economic growth through innovative Public Private Partnerships (PPP). President Hichilema stressed that this approach not only alleviates fiscal pressure but also encourages private sector involvement in Zambia’s economic development. President Hichilema and President Antoine Félix Tshisekedi of the Democratic Republic of Congo (DRC) inaugurating the Kasomeno-Kasenga-Chalwe-Kabila-Mwenda Road. This project, which links the DRC to Africa’s east coast through Zambia’s Nakonde border and Tanzania, is poised to become the shortest route connecting the DRC to the Indian Ocean, opening up vast trade opportunities. It is expected that more than 400 trucks will utilize the Luapula River Bridge, providing a crucial trade link between Luapula province in Zambia and Lubumbashi in the DRC. In addition to facilitating trade and economic growth, the Kasomeno-Mwenda Road and Bridge Project holds the promise of job creation and infrastructure development. The local communities, particularly in Mwense, are set to benefit from increased economic activity in the region, as well as job opportunities during the construction phase. President Hichilema and President Antoine Félix Tshisekedi of the Democratic Republic of Congo (DRC) during the inauguration of the Kasomeno-Kasenga-Chalwe-Kabila-Mwenda Road. The...

EAC $103m budget focuses on infrastructure growth

The East African Community is prioritising infrastructure development in the next fiscal year, signalling a break from a three-year lull blamed on the Covid-19 pandemic. The EAC on Tuesday tabled before the East African Legislative Assembly (Eala) budget estimates totalling $103,842,880 for 2023/2024, out of which 43 percent ($44 million), funded by development partners, will be used on infrastructure projects to spur intra-EAC trade, which increased by 13.4 percent to $74.03 billion in 2022 from $65.268 billion in 2021. The bloc has this year secured funding for road projects connecting Kenya and Tanzania though Lunga Lunga; Tanzania to Burundi through Kasulu; and Kenya to Uganda through the Busia border. It has also prioritised railway, air and water/port transport. “The secretariat will continue implementing successor multinational road projects linking partner states and the Phase II OSBP (One Stop Border Post) programme including the design, construction and operationalisation of prioritised OSBPs within the region to enhance regional integration and trade facilitation,” said council chair, Burundi’s minister for EAC affairs Ezechiel Nibigira. The Kenya-Tanzania road sections are in different stages of completion after the two governments secured €375 million ($410 million) from the African Development Bank (AfDB) and the European Union (EU). But some remaining sections still need funding to connect the entire stretch of the coastal corridor. “Construction of the multinational Tanzania/Burundi road: Kabingo-Kasulu-Manyovu (260 kilometres) in Tanzania and Gitaza-Rumonge (45km) in Burundi is ongoing following Burundi and Tanzania securing financing amounting to $322.35 million in the form of grants and loans from...

EU invests GH¢75m to support Ghana’s exports

The European Union (EU) has invested GH¢75 million (€6.2 million) to help boost the competitiveness of the country's exports on the international market. The investment, made in the last four years, focused on three main value chains which included cassava, fruits (mango and pineapple), cosmetics and personal care products. It was a contribution to the West Africa Competitiveness Programme (WACOMP), a partnership initiative between the Economic Community of West African States (ECOWAS) and the EU. The programme seeks to strengthen the competitiveness of West African products and to enhance the integration of ECOWAS countries into the regional and international trading system, including the African Continental Free Trade Area (AfCFTA) The EU Ambassador to Ghana, Irchad Razaaly, who made this known at WACOMP Ghana SMEs Product Exhibition in Accra yesterday, observed that the investment would help Ghanaian businesses to build  better access  and become more competitive in regional and international markets. “The EU has contributed around GH¢75 million to the programme, with the aim to boost the competitiveness of Ghanaian exports and support sustainable production and processing. “We are focusing on three main value chains: cassava, fruits (mango and pineapple), cosmetics and personal care products,” he said. The exhibition was held by WACOMP in partnership with the United Nations Industrial Development Organisation (UNIDO) for more than 50 EU-supported SMEs of fruits, cassava and shea butter products. Some of the firms that showcased their products included Unique Solution Farms, Ghana Home Foods, NyCa Pro Beauty, Leam Shea Products, Agape Cosmetics, Exotic and...

It is vital to maximise dividends from the East African Community

The real gains from any socioeconomic initiative are as good as the benefits they convey to the targeted beneficiaries. The same applies to the East African Community (EAC). Thus the leadership of the regional bloc owes its collective citizenry the duty of making known why it is potentially beneficial to them. The idea behind regional blocs—or regionalism, as those more inclined to scholarly exploits like calling it—is premised on a number of imperatives. Foremost among them are relative geographic proximity and shared cultural, economic and political objectives. The confluence of shared interests is a key rationale of the geopolitical ‘camaraderie’ that anchors the justification of regional blocs. Beyond shared interests and resources, the member states owe their citizens a range of dividends extractable from trade opportunities possible in the exchange of goods and services in the region. So what should be prioritised to maximise the benefits of the EAC? Four quickly come to mind. The first two are improving the environment for cross-border trade to thrive and boosting key infrastructure, particularly transport and ICT. The others involve taking a common view on matters macroeconomic for the region and sharing resources to enhance security and the whole slew of cross-cutting social services. An enabling environment has already been created for the free exchange of goods and services in the EAC to flourish. However, a lot more needs to be done to increase the movement of people, goods and services within the region. The 300 million-strong combined population is an asset we...

EAC-Comesa-SADC tripartite trade deal in place by April, Ruto says

In Summary President Ruto said Nairobi is a strong participant in the Tripartite Trade Agreement encompassing EAC, Comesa and SADC. This, he said, will offer the 28-countries bloc the advantage of 750 million people and an economy of $1.8 trillion. The EAC-Comesa-SADC tripartite agreement will be in place by the end of April 2023, President William Ruto has said. This means 28 African countries will trade as a bloc with the European Union. Pitching Kenya as the preferred investment hub for EU investors on Tuesday, President Ruto said Nairobi is a strong participant in the Tripartite Trade Agreement encompassing EAC, Comesa and SADC. “The tripartite agreement was signed in 2015 and unfortunately for the seven years or so, we have not concluded it to the satisfaction of the EU requirements,” the President said in Nairobi during the EU-Kenya Business Forum. To address this challenge, Ruto said he sent Trade CS Moses Kuria as his special envoy to 11 capitals to meet with the respective presidents. “He [Moses Kuria] has been to Egypt, Angola, Comoros [new AU chair], Uganda, Tanzania, Lesotho South Africa …, and now I can promise with confidence, by the end of April, we will have the tripartite agreement in place,” Ruto said. This, he said, will offer the 28-countries bloc the advantage of 750 million people and an economy of $1.8 trillion. “This is a great opportunity that as the EU looks at Kenya, you are also looking at the tripartite agreement and a huge population and economy...

EAC Member States Urged To Abolish Toxic Taxes

East African Business Council (EABC) has raised new concerns that variations in tax policies are distorting prices and frustrating intra-EAC trade and investment. As a result, the EAC member states are being urged to eliminate discriminatory taxes and accelerate the harmonization of domestic taxes within the bloc if they are to attract improved cross-border and foreign direct investments. Unharmonized taxes, it emerged, was largely contributing to the bend of the intra-EAC trade and cross-border investment and frustrating the free movement of goods, services, service suppliers, and workers. Speaking during the Validation Webinar for the Study on Discriminative Taxes and Harmonization of Excise Duties in the East African Community (EAC) – the Council’s Chief John Bosco Kalisa, called on the EAC Partner States to adhere to Article 15:2 of Customs Union Protocol that states for the trade within the bloc to flourish. “No Partner State shall impose, directly or indirectly, on the products of other Partner States any internal taxation of any kind in excess of that imposed, directly or indirectly, on similar domestic products,” states the article’s excerpt. The continued intra-EAC trade decline reflects a gradual loss of competitiveness among the region’s manufacturers compared with Asian exporters, as well as increasing protectionism fueled by political tensions among some member countries that have engulfed the region over the past couple of years – limiting attractiveness. Other upshots include an unlevelled playing field for business and difficulties in marketing the EAC bloc as a single investment destination, according to Kalisa. The harmonization...

Non Tariff Remain A Barrier To Trade Among EAC Countries

The Board of the East African Business Council during its 84th meeting outlined priorities set to boost intra-EAC trade and investments in the region. During the 84th EABC Board Meeting, the Chairperson of EABC . Angelina Ngalula lauded the EABC Secretariat for championing the adoption of 35% as the 4th band of East African Community (EAC) Common External Tariff by EAC Partner States which will promote industrialization. Ngalula stated that the Board is steadfast in steering high-level policy advocacy through dialogue with the EAC Heads of State to unlock Nontariff Barriers, restrictions to free movement of services, double taxation, open skies, telecommunications and infrastructure development in order to boost intra-EAC trade and economic resilience amid the global crisis. Half of the countries in the Eastern Africa sub-region are net food importers thus extremely vulnerable to higher global food and energy prices, rising inflation and food insecurity in the EAC bloc. According to FAO (2022), Global Food Price index of cereals, meat, and dairy rose by 26%. The Board urged the EAC Council of Ministers to fast track finalization of the Regional Local Content Policy and Ratification of Article 24(2) of the Protocol on the Establishment of the Customs Union to operationalize the Trade Remedies Committee to handle disputes on trade-related matters as outline in the resolutions of the High Level Summit on Common Market Protocol. The EABC Board Commended the EAC Secretary General for leading the EAC trade mission to Democratic Republic of the Congo and directed the EABC Secretariat...

Food, fuel price rise hands EA tough inflation lessons

In mid-June, as Kenya battled maize scarcity and related production costs, the Tanzanian government asked its grain traders to get an export permit before shipping maize out. Though an unpopular decision, as it cut supplies to Kenyan grain millers and other East African countries who had ordered stocks from Tanzania, the policy helped Tanzania to keep inflation in check, exposing the rest of the region to expensive food. In Kenya, the policy partly helped to drive the price of a two-kilogramme packet of maize flour to an unprecedented high of Sh200. Even before the dust settled, towards the end of June, Tanzania increased the export permit costs by 93 percent. In this directive, Dar es Salaam authorities increased the cost of acquiring export permits from the previous Sh27,000 per truck to Sh52,000. This meant that Tanzanian traders had to increase prices of their commodities, a scenario that discouraged export trade. These, among other policy interventions, have seen Tanzania shield itself from the wave of sharp rises in inflation sweeping across the region. Official data reveals that Tanzania had the lowest inflation rate in the region by the end of August at 4.6 percent. It was followed by South Sudan which recorded a 6.4 percent rate while the Democratic Republic of the Congo (DRC), the newest member of the East African Community (EAC) came third at eight percent. Kenya posted a 62-month high of 8.5 percent inflation in August, which rose to 9.2 percent in September, as the region races to...

How weak financial data costs East Africa billions in lost FDI

External investors looking for merger and acquisition deals in East Africa are facing challenges when conducting due diligence and valuing potential targets due to low-quality financial data, potentially costing the region valuable foreign direct investment inflows. Advisory firm Deloitte says in a macroeconomic outlook publication that underdeveloped target companies — in terms of revenue and profitability—are also forcing investors into a narrow band of sectors such as energy, fast-moving consumer goods and financial services, and leaving other small businesses facing a capital drought. Private equity, venture capital funds and development finance institutions (DFIs) have over the years expressed concerns about asset quality and valuation of local businesses, pointing out the possibility of overpaying for low-quality investments. When conducting due diligence on potential acquisition targets or merger partners, companies analyse historical performance and also evaluate the operating environment to project future performance. Failure to do proper analysis can, therefore, leave a buyer staring at considerable losses should the financial projections of the acquired asset fail to match actual performance. “Key challenges experienced in due diligence comprise tight deadlines, inadequacy in the skills in the finance function and low quality of financial information. Inadequate due diligence presents the risk of mis-assessment of the going concern of the target, resulting in an uninformed merger or acquisition,” said Deloitte in its East Africa Macroeconomic Outlook report. “Most investors looking to deploy capital in the East African region have (also) expressed concerns about the quality of assets, the reasonableness of their valuation asking prices and...