Traffic on the global payments network Swift has grown by 20.1% in East Africa over the past year, indicating an increase in trade flows with and within the region. East Africa has outperformed the total growth for Swift globally, which amounts to 8.2%. The figures released by Swift this week also show that intra-regional traffic in the region is up by 19.8% compared to 2015, now accounting for 69% of payments traffic in East Africa. Since 2013, the average number of daily messages in the region has almost doubled, from 15,234 to 27,907 in 2016. According to Swift’s head of Sub-Sahara Africa, Denis Kruger, the notable growth in Swift traffic volumes “could indicate an increase in trade flows, both within the East African region and between East Africa and other countries”. Swift research has shown that its traffic data is closely correlated to economic activity. A rise in traffic volumes in therefore a sign of a long-term growth trajectory for East Africa, despite challenging global conditions, the company says. The figures, Swift notes, reflect the success of the East African Payment System, which was established by the East African Community in 2013 with the aim to reduce transaction time and lower the cost of doing business in the region. The multi-currency system, which operates on the Swift network, links domestic payments systems in Kenya, Tanzania, Uganda and Rwanda, making cross-border fund transfers within the countries easier, supporting the free movement of goods, labour and services. The rest of the African continent...

The currencies of five member states, Tanzania, Kenya, Uganda, Rwanda and Burundi, showed minute fluctuation in either sides raging between -2 and 11 units. Uganda currency firm The best currency was Uganda’s shilling that appreciated by 11/- to 3,605/- up from 3,616/- at August 1st. The shilling held its position firmly yesterday since it was underpinned by low dollar demand from commercial banks and importers in the manufacturing and telecommunications sectors. The second best was Kenyan that gained by 1/- yesterday to 103/- from 104/- the first day of last month. Tanzania shilling loses On other hand the Tanzania shilling, in a month under review, depreciated more compared to its peer units. The shilling opened last month at 2,242/- a greenback but slipped to 2,246/- yesterday to start a month in slightly bad foot. “The impact for the fluctuation of two or five shillings is insignificant, but is something,” Leonard Joseph, an economist said. Kenya shilling upbeat Kenyan shilling yesterday opened the trading floor at a stable note and traders said it may start to strengthen. However, the shilling of the biggest economy in the bloc—depreciated last Friday after the Supreme Court nullified August 8th presidential election—on month basis marginally gained by 1/- to 103/- from 104/- of August first. The shilling and alongside Kenyan shares and dollar bonds had plunged on Friday after the court backed a petition brought by opposition leader Raila Odinga and declared President Uhuru Kenyatta’s election victory invalid. But traders said the shilling could start...

The EAC Secretary General, Amb. Liberat Mfumukeko said during the opening of the conference in Arusha recently that the Pre-Budget Conference is happening at a time when EAC is finalizing preparations for the 5th EAC Development Strategy 2016/17 – 2020/21. “I am glad that priorities and development objectives as well as strategic interventions therein stipulated have been validated by Stakeholders’’ The six key areas to be considered in the formulation of the next budget are further liberalisation of the free movement of labour, goods and services, improved cross-border infrastructure to ease the cost of doing business and enhanced regional industrial development. Others include agricultural productivity and transformation through investment in key priority areas, implementation of the roadmap for the attainment of the EAC Monetary Union, strengthen peace, security and good governance and institutional framework for the EAC Political Confederation. Moreover, improve socio-cultural welfare of the people in the region and institutional transformation are among the crucial areas that will be considered in guiding the budget formulation as well as corresponding activities for 2018/19 FY. Amb Mfumukeko urged the participants to appreciate the role of the Organs and Institutions of the Community, as well as the Partner States in moving the integration process forward as they discuss the priority areas, strategic interventions and activities to be implemented over the financial year 2018/19. Source: Daily News

A team of 26 cycling volunteers from six East African community member countries are on a 45-day cycling tour campaigning to raise more public awareness about the East African integration. Dubbed, ‘East African Community Bicycle Tour’, the non-competitive cycling race was for the second time organised under the ‘Campfire Logs Guild’, an initiative that brings together different East African youth communities mainly to create Unity, Peace and togetherness to strengthen the awareness of the EAC integration among member countries’ communities through cycling. John Bosco Balongo, the Tour Team Leader, said the tour has helped the team members experience the current image of EAC country members’ cooperation and took an opportunity to raise awareness on the importance of the community’s cooperation. “We have been able to ride together, struggle together and chill together to signal that the community members can share successes, risks and opportunities towards the same destiny by building a perfect regional integration, all through our cycling shared passion, we expect more youth to join us since the tour is free and open to all,” he said. Seraphine Flavia, the Acting Director General, Coordination of East African Community Affairs at the Ministry of Foreign Affairs and Cooperation, praised the team’s spirit in raising awareness of the regional integration among the member countries. “Our country is behind this encouraging and inspiring initiative and we will push for advocacy in different EAC forums to get it supported,” she said. The team is comprised of 21 males and five females, including three...

Regional integration and co-operation between sovereign states has a long history especially in Africa. According to the World Bank, the first generation regional integration schemes were partly motivated by the political vision of African unity, but also as a means for providing sufficient scale to import substitution industrialisation policies. One of the most compelling arguments for regional integration in Africa is usually made on the basis of the fragmentation of sub-Saharan Africa, which has 47 small economies, with an average Gross Domestic Product (GDP) of $4 billion (Sh400 billion), and a combined GDP equal to that of Belgium or 50 per cent of the GDP of Spain. The implication is that with the per capita growth rate being between zero and two per cent per annum, there is limited progress in poverty reduction and the achievement of many of the Sustainable Development Goals (SDGs) seems to be elusive. Regional tourism is driving the world over. For example, it is estimated that four out of five international arrivals are visitors travelling within their region (UNWTO Tourism Barometer 2014). Leading destinations in Europe, USA and southern Africa have domestic and regional tourists accounting for between 60 and 70 per cent, which therefore acts as the foundation for their industry thereby cushioning them from international shocks whenever these occur, as they are bound to. In Kenya, arrivals from Africa by air in 2015 were estimated at 26 per cent of the total arrivals. However for the year 2014, when cross border numbers are...

NEGOTIATIONS for the Tripartite Free Trade Area (TFTA) will be concluded by the end of next month to provide a single trade regime covering three regional blocs to accelerate trade. Speaking at the fourth regional sensitisation workshop, Common Market for Eastern and Southern Africa (Comesa) director of trade and customs, Francis Mangeni said 20 countries have signed all annexes on key areas such as standards, non-tariff barriers and interim arrangements for rules of origin. Trade remedies and tariff offers were also agreed upon. “At the moment some countries are saying they want things done properly and when everything is finished then they will sign the agreements. One of these countries was South Africa and a few others. So in about two months, when we have finally finished all the outstanding issues, then South Africa will sign. This is what has delayed, but countries are saying about the same argument on ratification that after all these issues then there can also sign and then ratify. When all these outstanding issues are finally resolved we will see more progress,” he said. “Currently, we are left with only six countries to sign the agreements and that’s not a problem and ratification now is the problem. “When the ministers met in Kampala in July they set a deadline for October 30, 2017.” The TFTA is a proposed African free trade agreement between the Comesa, East African Community (EAC) and Southern African Development Community (Sadc). Mangeni said countries have set three deadlines to complete the...

 How can central banks in the East African Community boost private sector credit that has since last year slowed down?   That was one of the issues that the Central Bank Governors in the region deliberated on during the 21st Ordinary East African Community (EAC) Monetary Affairs Committee held in Kampala on Aug. 25. Emmanuel Tumusiime-Mutebile, the Governor of Bank of Uganda and the current chairperson of the Monetary Affairs Committee told his guests that they have attained a lot of progress towards the operationalisation of the East African Common Market protocol but there have been a number of emerging issues which pose serious challenges to our integration efforts. “Some partner states have faced a slowdown in economic growth, both in the growth of private sector credit and the economic activities coupled with an increase in the non-performing loans,” Mutebile said. He said further reduction in private sector credit could weaken aggregate demand going forward and threaten the continent’s fastest-growing region. As such, he said, central governments in the region should do whatever it takes to encourage private sector access credit. But while the Governors said they do not have immediate plans to stir private sector credit uptake and improve economies of their respective countries, outgoing governor, Bank of Tanzania, Prof. Benno Ndulu, tried to offer a solution. He said at the time he assumed the job in 2008, the Tanzanian economy was in turmoil characterised by low private sector credit as business firms were unable to either access or repay...

The business meet set for October 5 and 6 is projected to bring together over 2500 investors from Kenya, France and other African countries. Dubbed ‘The Encounters Africa 2017’, the event is already attracting strong interest from French companies, as well as from Francophone countries. Event Coordinator Annemijn Perrin says they expect to connect businesses with the aim of closing deals at the summit. “Most companies are coming here to find partners to work together with Kenyan companies, either to set up in these countries, or to find a partnership to develop their business. Over 100 French companies have already signed up to come, dealing with agriculture, manufacturing, energy, education among others,” Perrin told Capital FM Business. The first edition was launched in 2016 in Paris, bringing together 2700 decision makers from 30 countries. Bilateral trade between Kenya and France remains heavily skewed in favour of France as it’s the is the third largest source market for Kenya’s imports in Western Europe, and the sixth largest market for Kenya’s exports in the bloc. Official data shows that Kenya’s exports to France grew 12 per cent to Sh5.6 billion between 2010 and 2014, while imports rose 20.4 per cent to Sh22.4 billion in the same period. Business France opened its office in Nairobi in 2013 to assist French firms interested in investing in Kenya and neighboring East African nations. Over 70 firms have invested in the country. Source: Capital Business

The East African Community Secretariat will have to borrow $3.38 million from its General Reserve Fund to pay salaries and suppliers after member states delayed remitting their share of the budget. The sectoral Council of Ministers responsible for EAC Affairs and planning, in their meeting held from August 21 to 25 in Arusha, directed the Secretariat to present to the Finance and Administration Committee the request for funds for approval. The money will be refunded immediately the remittances are effected by the partner states. The Council’s report says that a number of EAC institutions and organs are unable to meet their financial obligations due to the delays in remittance by the partner states. “Late contributions or no contributions by partner states is a constraint to the smooth operations of the community,” said the ministers. “The Sectoral Council of Legal and Judicial Affairs should have their input in the proposed sanctions to the partner states who do not remit their contributions or delay to do so.” The council also raised concerns that following the deposit of instruments of ratification by South Sudan to join the community, it was supposed to pay $6,715,064 for the 2016/2017 financial year but the amount was not appropriated by the East African Legislative Assembly (EALA) and neither has South Sudan paid. READ: Funding for EAC secretariat drops by $12m According to the provisions of the EAC Treaty, the budget of the community is supposed to be contributed equally by all the partner states. From the 2016/17 budget,...

Since the beginning of this century, the rapid economic growth of Asian economies, particularly China, has brought about immense economic benefits for Africa. This is because over the last few decades, to support its economic development, China has voraciously bought and consumed all types of commodities in Africa and globally. This enormous demand for commodities not only made the African natural resources more valuable, but also brought about a substantial amount of export revenues to Africa. Moreover, the massive inflow of export revenues has translated into a relatively high growth rate, that eventually caused people to start talking about the ‘Africa rising’ narrative. However, the impact of the 2008 global financial crisis, as well as the recent economic slowdown in China, has been hugely felt in the continent. Hence, a better insight in Africa’s global trade may provide a better idea of how Africa will fare in the future. Trends in Africa’s global trade According to data from the International Trade Centre, the 2016 global trade of the African continent had increased by a significant 238% to reach US$794.7bn from $235.4bn in 2001. Moreover, during those last 16 years, Africa received a cumulative amount of $5.8tn for its exports. This has definitely helped the African countries to grow. However, looking at a granular level, we find that trade is in fact on a decline. From 2001 until 2012, the African global trade had increased steadily to reach a peak of $1.2tn (a tremendous 427% increase), but from 2012 to 2016,...