Kenya’s move to adopt a regional electronic passport is on track after the government announced that electronic passports would be rolled out from September. The new generation passports are aimed at easing travel for East African residents. Tanzania, Uganda and Rwanda are also set to roll out the electronic passports. They will feature a microchip containing details of the owner and will allow information contained in it to be verified with information displayed on the passport. One of the major hurdles to the integration of East African Community member states has been failure to ease travel, which hampers movement of goods and people as a result. According to the Immigration Department, the current passports in use will be phased out over two years. The electronic passport has been touted as a great step in curbing fraud and easing clearance at international passports. The new look passport will also curb counterfeit travel documents and tampering. Eradicating trade barriers is the only way that the EAC member states can help foster business in the region. The adoption of the electronic passport by the EAC member states will hasten the free flow of goods from one point to another and attract investment. Among the major hurdles to regional trade are bureaucracy and corruption. While trade in the bloc has increased exponentially after the launch of the Common Market Protocol in 2010, there is still a lot more that needs to be done. For the economies of East African Community member states to grow, there...

The East African Community (EAC) has declined to establish another institution, citing financial constraints. Proposals to upgrade the EA Centre for Renewable Energy and Energy Efficiency (EACREEE) into a full-fledged body under the Community hit a wall after the technocrats said it was short of funds for the purpose. "The original plan of the Community was to have EACREEE as an EAC institution. However, due to financial constraints other innovative ways were devised", said the deputy secretary general (Productive and Social Sectors) Christophe Bazivamo. He said instead the College of Engineering,Design, Art and Technology (Cedat) of the Makerere University in Uganda was selected to host the renewable energy facility as one of its centres of excellence. Mr Bazivamo revealed this last weekend when he was addressed the board meeting of the centre whose creation received support from the United Nations Industrial Development Organization (Unido) and the Austrian Development Agency (Ada). The principal of Cedat Prof Henry Alinaitwe informed the meeting held in Kampala that efforts were underway to formally register EACREEE as a semi-autonomous legal entity so that it can function smoothly. However, the meeting concurred that while the regional energy centre would continue to be hosted at the Makerere University, a road map should be drawn to make it a full-fledged body of the EAC. "Since its inauguration, Cedat has been working with several stakeholders to advance the centre's activities", said the Cedat principal Prof Alinaitwe. Despite failure to register the renewable energy centre as an additional institution under...

At their recent summit in July, African presidents reiterated their determination to launch the Continental Free-Trade Area (CFTA) by December. Modalities for negotiating goods and services have been agreed and adopted and a draft text for the CFTA Agreement has been put on the table for negotiation. Some believe the job is more or less done and two or three negotiation sessions are needed before the CFTA can be launched at the end of the year. The stakes are high. If it is not launched in 2017, Africa will be the laughing stock of the world for failing to meet the deadline that was set in 2012. There is a sense of pride and duty. The agreement must cover the essential elements — establishment, principles and objectives, nondiscrimination, tariff elimination, customs and trade facilitation, standards, transparency and notification, institutions, disputes and the usual final provisions. Outstanding work such as details of trade remedies can be continued afterwards. A good strategy for quick progress is to construct the CFTA Agreement using the provisions already available in the agreements of the African regional economic communities that countries have been using over the years. To supplement this, instruments on customs and trade facilitation and health and technical standards can be constructed on good practice from the World Customs Organisation and global standards-setting bodies. African administrations and regulatory agencies happily use instruments and documents from these organisations. There are areas of difference among regional economic communities, such as the settlement of trade disputes. This...

Local banks are on the front row in enhancing inter-regional trade through pan African banking, a report by PwC shows. The Global Economic Watch, released early this month, shows that the total shares of exports to sub-Saharan Africa across four economies including Kenya, Nigeria, South Africa and Togo increased from 12 per cent in 2007 to 23 per cent in 2016. The increase is an equivalent of $11.7 billion (Sh1.21 trillion). Locally-grown banks Equity and Kenya Commercial Bank dominate the large cross-border banking group in terms of size and subsidiaries with each having a presence in six and seven countrys respectively. This growth has made Kenya the largest beneficiary of the share of SSA trade, having the highest percentage of 35 per cent. A large part of this portion is from trade within the East Africa Community. The two banks have largely leveraged their expertise in agent and mobile banking services to expand to other countries by targeting the underbanked in the East African Community. Other banks with a bigger presence in terms of cross border banking include Standard Bank and Ecobank. While the number of crossborder subsidiaries of African banks has almost tripled since 2002, there are now 10 Pan African Banks with a presence in at least 10 SSA countries, and one with a presence in over 30 SSA countries. PwC’s economist James Loughridge attributes the fast growth to expansion of SSA markets between countries, that has seen banks follow corporate client abroad, and secondly to the global...

Are you curious what the most economically developed countries in Africa are? You don’t need to search on the internet because Insider Monkey has investigated it for you and published an article about this topic. When talking about certain countries and their development, it is of enormous importance to discuss their economy in order to get to know the overall picture.  In African case, this is even more important, because it will also help us to break the wrong picture of this amazing continent. n order to get the relevant data related to the economic development, the gross domestic product (GDP) is the most important indicator to look at.  In very simple words, this stands for the overall dollar value of everything that is produced in a certain period, and it is usually expressed in comparison to the previous period, making it easier to follow the potential development or possible decline. Later in the same article that explains what GDP actually is, there is also the explanation on how it is actually measured. Apparently, and if I may say, quite logically, this can be done only by economists, taking into consideration two aspects; what everyone earned in a year and what everyone spent. This is called income approach and expenditure method. Now without a further ado let’s see what Insider Monkey has investigated for us. We have picked two counties from their list. Tanzania is the first now. Nominal GDP is $45.899 billion. This country has been through a lot in the past...

The EAC Industrial Competitiveness Report 2017states that these growth rates, as measured by the Manufacturing Value Added (MVA) and manufacturing trade growth rates, fall short of some of the targets set in the EAC industrialisation policy. They are also below similar regional economic communities in sub-Saharan Africa, including Ecowas. Discounting by population size, the report shows that the EAC is still registering a low level of industrial production. And, based on the current growth rate, the region would only attain an MVA per capita level of about $87 in 2032, which is well below the goal of $258 set in the EAC Industrialisation Policy, and would not allow it to reach SADC’s production capacity of 2015. The report comes as the EAC Industrialisation Action Plan (2012-2017) comes to an end. It shows that MVA growth has slowed down in recent years, from 5.3 per cent between 2005 and 2010, to 4.6 per cent between 2010 and 2015, thus falling short of the 10-15 per cent annual growth rate projected in the EAC Industrialisation Policy and Strategy and below the sub-Saharan Africa average. Missed opportunities Analysis of the cotton and leather sub-sectors shows missed opportunities at the level of high value-added products in the value chain, such as for cotton apparel and leather footwear. Meanwhile, the analysis of industrial drivers has pointed to a number of key constraints to industrial competitiveness. Nonetheless, although EAC’s exports of the top regionally demanded products generally grew since 2010, it did not happen at the pace...

About five customs entries, customs agents’ fees in two countries, two goods- in-transit guarantee bonds and duplicated customs procedures in Kenya and in Uganda. That was the inconvenience that characterised cargo clearance before the implementation of the Single Customs Territory (SCT) in 2013. Steel and Tube Industries’ Aggrey Ijara recollected that back in 2013 he was required to declare each container on  five to seven  customs entries for Mombasa Port,  and two entries for transit and on arrival at Malaba, Eastern Uganda respectively “The many entries were costly and a lot of time was consumed,” Ijara stated. Importers paid US$200m fees for clearing agents in Mombasa, a Sh150, 000 (over US$40) bond fee at Malaba and another Sh500, 000 (US$138) for agents in Kampala. This was in addition to two goods –in- transit bonds to deter dumping of cargo in Kenya or Uganda. The delays and costs were an indictment on revenue authorities, which were failing on the trade facilitation role. To address these challenges and others that impeded regional trade, the Presidents of the East African Community (EAC) agreed to fast track the implementation of SCT to enable importers declare their goods once on arrival at the first port of entries into the region. It is a stage towards full attainment of the Customs Union achievable by the removal of restrictive regulations and/or minimization of internal border controls on goods moving between the partner states. In June 2013, amid a Northern Corridor Presidents’ Summit, Uganda, Rwanda and Kenya heads of...

The East African Community Heads of State will meet in the Kenyan capital Nairobi on November 30 for the 14th Ordinary Summit where they are expected to discuss different regional projects. Before the summit, the EAC Heads of State will travel to Tanzania to officially open the new EAC Headquarters in Arusha, commission the Arusha-Namanga-Athi River road both events will take place on  November 28. The EAC Secretariat, the East African Legislative Assembly and the East African Court of Justice have been using rented facilities since the Community was revived in 1999. The three organs of the bloc were housed in the Arusha International Conference Centre. The new building was financed by the German Government and it will be hosting all the three EAC Organs based in Arusha. The Presidents, while in Nairobi, are expected to discuss financing of infrastructure projects, where different regional priority infrastructural projects in energy, and transport sectors will be outlined, according to a statement from the EAC Secretariat. Bill Kayonga, the Permanent Secretary in the Ministry of East African Community, told The New Times that during the summit, the regional leaders will receive reports by the EAC Council of Ministers highlighting the implementation status of the regional activities over the last one year. “They will receive a report of  the verification team on the application of the Republic of South Sudan ; the EAC secretariat will also present a model of the structure of political federation and action plan on the way forward,” he said....

Regional manufacturers have been urged to embrace electronic trading platforms (e-commerce) to widen their market reach and become more productive and competitive. The experts said embracing such innovations will help reduce the cost of production and enhance the sector profitability. According to Dr Mukhisa Kituyi, the United Nations Conference on Trade and Development (UNCTAD) Secretary-General, e-commerce is an instrumental and innovative tool for promoting industrialisation and trade across the region. Kituyi was speaking during the ongoing EAC Manufacturing Business Summit and Exhibition in Kigali on Tuesday. The three-day summit brought together more than 500 participants,  including business leaders,  experts and policy-makers, to discuss mechanisms to bolster regional industrialisation. Kituyi said manufacturers should take advantage of the immense opportunities presented by e-commerce platforms to enter new markets, create awareness about their products and drive sales to improve profits. The UNCTAD official observed that the economy today is being driven by digitisation, which makes it imperative for regional manufacturers to embrace e-commerce and tap into the untapped markets. This way the sector will be able to create more jobs and foster inclusive economic growth, he added. Matthias Wachter, the in charge of the Federation of German Industries department of security and raw materials, encouraged industrial players to employ technology and e-commerce in all their processes to increase production and tap new customers. “This way, they will be able to easily penetrate markets and sell products at competitive prices,” he added. Reducing cost of production Meanwhile, the business community has called on regional governments...

The East African Community regional integration process has seen the region register improvement in logistics performance which had stagnated in previous years, a World Bank report has said. The bi-annual report, ‘Connecting to Compete 2016: Trade Logistics in the Global Economy’, ranked 160 countries on their trade logistics performance as well as the region, identifying the challenges and opportunities. The report noted that the move by the East African Community nations to integrate into one bloc had elevated the region’s logistics performance, consequently making it more attractive for investments and reducing the cost of doing business. Among the most notable changes observed by the survey was the elimination of multiple barriers to trade and transport, such as cumbersome procedures. “The Northern Corridor was once known for multiple barriers to trade and transport, including lengthy dwell times at Mombasa port and cumbersome clearance procedures along the corridor. In 2012–13, the corridor countries started a series of reforms that significantly improved the logistics environment and drove down logistics costs,” the report’s authors observed. Integration, the report says, saw the establishment of a single customs territory, thereby tackling unbearable clearance procedures. “One of the reforms was to introduce Single Customs Territory clearance procedures within the East African Community, including Burundi and Tanzania. This means final customs clearances for free circulation can be made already at the port of entry in Mombasa. The system has significantly reduced administrative burden and shortened the time required for customs formalities,” the authors said. With the single customs...