Was the Africa Growth and Opportunity Act a poisoned chalice from the United States of America? It appeared so after the US allowed a petition that could see Tanzania, Uganda and Rwanda lose their unlimited opening to its market. This follows the US Trade Representative assenting last week to an appeal by Secondary Materials and Recycled Textiles Association, a used clothes lobby, for a review of the three countries’ duty-free, quota-free access to the country for their resolve to ban importation of used clothes. The US just happens to be the biggest source of used clothes sold in the world. Some of the clothes are recycled in countries like Canada and Thailand before being shipped to markets mostly in the developing world. In East Africa, up to $125 million is spent on used clothes annually, a fifth of them imported directly from the US and the bulk from trans-shippers including Canada, India, the UAE, Pakistan, Honduras and Mexico. The East Africa imports account for 22 per cent of used clothes sold in Africa. Suspending the three countries from the 2000 trade affirmation would leave them short of $230 million in foreign exchange that they earn from exports to the US. That would worsen the trade balance, which is already $80 million in favour of the US. In trade disputes, numbers do not tell the whole story. Agoa now appears to have been caught up in the nationalism sweeping across the developed world and Trumponomics. US lobbies have been pushing for tough...

Investors and organisers of the YouthConnekt Africa Summit that took place in Kigali from July 19-21, aim to raise $60 million to finance innovative projects by young entrepreneurs as part of efforts to create 10 million jobs before 2020. The event, which was organised in collaboration with United Nations Development Program (UNDP) and United Nations Conference on Trade and Development (UNCTAD), is in its fifth edition. It brought together 2,500 delegates including heads of states, motivational speakers, celebrities, business leaders, investors, young innovators and development partners. Under the theme From Potential to Success the conference marked the launch of the YouthConnekt Africa Hub and Empowerment Fund that will identify and finance business projects for young entrepreneurs. Baraka Ochieng, programme analyst at UNDP regional office for Africa, told Rwanda Today that YouthConnekt has demonstrated the potential to empower young Africans in different sectors. “As Africa, one of the challenges faced by youth is unemployment, lack of entrepreneurship opportunities; lack of space in decision making within government and leadership. “So this platform provides many opportunities for the youth to be empowered. One of the goals is to create 10 million jobs,” Mr Ochieng said. On the creation of the YouthConnekt Africa Hub and Empowerment Fund, participants will have to agree on a model of outsourcing pledged funds and projects. Projects that promote Sustainable Development Goals (SDGs) are likely to secure funds from the UNDP. The Empowerment Fund seeks to raise $60 million before 2020 to finance key agendas like creating jobs for more than 10 million people...

The formal launch of the once touted the mega economic bloc for Africa, the Tripartite Free Trade Area (FTA), faces further delay because only one country has so far ratified its creation out of 19 member states. A minimum of 14 ratifications are required for the agreement to come into force, combining three regional economic communities, the East African Community (EAC), Southern Africa Development Community (Sadc) and Common Market for Eastern and Southern Africa (Comesa). This emerged last week when Madagascar, a Comesa member, appended its signature to the Tripartite Agreement before senior officials of the EAC, Sadc and Comesa. "Egypt is the only country to have ratified the Agreement. A total of 14 ratifications are needed for the agreement's entry into force," officials at the event in Antananarivo were told. Under the Agreement, the three economic blocs were to merge into a single free trade area, the largest in Africa, with a combined Gross Domestic Product (GDP) of $ 1.3 trillion, making it also one of the largest FTAs in the world. Although the signing of the Agreement by Madagascar, only a few days after South Africa did so, the EAC secretary general, Liberat Mfumukeko, the current chairperson of the Tripartite Task Force, admitted that negotiations were going at a snail's pace and that little has been achieved. "There had been limited progress in Phase Two negotiations and the agreement on the movement of business persons," he said in Kampala on July 7th, hardly a week before the Antananarivo...

Among optimists, the proposal by East African Community (EAC) member states to ban the importation of used clothes by 2019 is great because it could spark the growth of a local textile industry in the bloc. But pessimists say the move will complicate the region’s trade arrangements with leading partners including the U.S. which is also a large exporter of used clothes to the region. It could also increase the cost of clothes in countries where the majority of the population is poor and lead to the import of new cheap clothes to out-compete the very industries the regional governments seek to protect. Faced with these options, some business analysts are proposing a middle-ground that reflects the status quo. They say the region is better off allowing entry of used clothes as it also develops its own textile industry. “As a region, there’s need to allow entry of any products provided there  are no illegalities in the sale of those items on our markets while at the same time boosting  their  production locally,”  said Charles Ocici, the executive director at Enterprise Uganda, a USAID-sponsored agency for equipping skills to small and medium firms. He suggests a co-existence of used and new clothes in the regional markets and the use of taxes to ensure fair competition between them. That way, Ocici says, the burden of the ban will not only be felt by the poor but by all clothing consumers, who will, in turn, buy the locally made clothes. He added...

Plans to harmonize East Africa mobile tariffs to create a single mobile network face hurdles as some nations fear that their telecoms could suffer losses, officials said on Monday. Communication Authority of Kenya Director General Francis Wangusi told Xinhua in Nairobi that once a country is not sure of the consequences of the one area network, it needs to be conscious not to find itself making a mistake. Wangusi said that one of the things hindering the adoption of the single network is the fear of illegal termination of international traffic purporting to be local calls. "We are already experiencing cases where calls from outside East African Community (EAC) are being illegally terminated locally and then relayed as a local calls and this is denying revenues to local telecoms," he added. The one area network was introduced in 2014, but so far only Kenya, Uganda, Rwanda and South Sudan have joined the single network. Other EAC member states such as Burundi and Tanzania are not yet part of the network that seeks to ensure that all intra-EAC calls are treated as local calls. The regulator is seeking to purchase a device management system to monitor its network so as to prevent the illegal termination of internationals and raise the credibility of the single network. Wangusi said that EAC partner states are set to have a meeting towards the end of month in order to discuss ways to overcome the challenges. Source: Xinhua Net

The East African Community is in the process of signing an economic partnership agreement with the European Union. So far, only Kenya and Rwanda have signed the agreement. Burundi is reluctant to sign the agreement in the wake of economic sanctions imposed on it by the EU. Meanwhile, Tanzania has commissioned a study on the effects of signing the agreement on the region. Uganda has stated that it will sign the agreement only if all the EAC member states reach a consensus, which seems difficult at this stage. However, of interest are the possible effects of such an agreement on the region as highlighted in the study commissioned by Tanzania. The research seems to conclude that it is not advisable for the EAC to sign the agreement due to a number of negative effects including the danger posed to local industries and reduced revenue from tax. The effect of the agreement, according to the study, is that it will open up the market to cheaper imports from the EU therefore posing danger to local industries. Furthermore, due to the reduction of taxes on such imports, revenue will be less. These are some of the reasons highlighted against the agreement. However, Kenya and Rwanda have signed the agreement as it gives them access to more markets. While I have not looked into the economic impact of such agreements, I believe that EAC member states can resort to using domestic laws to protect the local industry from whatever harmful effects that may...

As Kenya's general election beckons the race has effectively narrowed down to two horses. Either, opposition leader Raila Odinga , or incumbent Uhuru Kenyatta will be Kenya's president after August 8. The bid for State House has attracted eight presidential contenders in total. But in recent weeks the focus has shifted to Odinga's National Super Alliance and Kenyatta's Jubilee Party, both of which have recently unveiled their manifestos. While the manifestos look good on paper, depending on one's political leaning, they are unlikely to have a significant impact on how Kenyans will cast their votes. The majority of the electorate have already decided on their preferred candidate. Most will vote on the basis of their tribal affiliations. The latest polling by Infotrak shows that only 8% of Kenyans are undecided on which presidential aspirant to vote for. Despite the fact that party manifestos will not shift voting patterns, they do provide a policy snapshot of what the parties would prioritise were they to form the next government. The fact that neither the Jubilee Party nor the National Super Alliance manifesto takes much account of relations between Kenya and its peers in the East African Community, is noteworthy. And disturbing. A study of the two manifestos shows that neither has a coherent plan for regional integration. This should concern Kenyans, as well as the country's neighbours. Relations between Kenya and its neighbours aren't as they could be. A few months ago cabinet secretary for foreign affairs Amina Mohamed accused Kenya's neighbours of not backing her candidature for the chairmanship of the African Union commission. Uganda openly disputed...

The cost of transporting goods has dropped by over 30% for Uganda destined goods A delegation from Uganda to the World Trade Organisation in partnership with Trade Mark East Africa (TMA) has impressed Swiss investors with how efficient Uganda’s borders during a  a side event on Trade Facilitation on the sidelines of the Sixth Global Review of Aid For Trade in Gevena. The objective of this session was to show the extent to which Uganda with the support of TMA had undertaken deliberate and strategic moves to ease the cost of doing business. Amelia Anne Kyambadde, Minister of Trade, Industry and Cooperatives together with Frank Matsaert, Chief Executive Officer of TMA were on the panel to show case the One Stop Boarder Post (OSBP) in Busia. A live link connection was done to feed directly into the panel discussion to an audience of over 500 trade facilitation enthusiasts. A video highlighting the OSBP processes at Busia was showcased. The three-minute video highlighted: the One Stop Border Post; the Authorised Economic Operator (AEO) Scheme; and the Regional Electronic Cargo Tracking System. During the discussion, the Kyambadde fielded several questions moderated by Matsaert on why the OSBP; the challenges that obtained before; and the benefits of the OSBP in terms of cost reductions with regard to movement of cargo and clearance of goods. Matsaert observed that TMA’s efforts to facilitate trade in East Africa had focused on removing bottlenecks and improving efficiency along the main transport arteries. He noted that, after the...

Travel within Africa is not easy, it is expensive and often frustrating. The regional blocs have been working on travel agreements, particularly air travel to facilitate easy travel, but the high cost of tickets and airport taxes are making travel still expensive and out of reach of many citizens. But the East African Community (EAC) is taking a giant step to make travel within the region cheaper by classifying air travel from one country to the other domestic. A report by the East African says by the end of 2017, flights between countries in the region will be classified as domestic. The benefits will accrue to travellers because, according to the report, it will lower the price of air tickets and increase the number of air passengers. “The change will see the price of air tickets drop by up to 12 per cent across the region, with domestic flyers charged a service fee of $5, compared with the $50 paid by international passengers,” it said. While it is easier and cheaper to travel from Kenya to Rwanda by air, it is practically impossible to travel from Ghana to Benin in West Africa. The EAC region is ahead of all the other blocs in Africa towards achieving integration. A 2016 Africa Regional Integration Index – which measure progress on regional integration, ranked the EAC the number in Africa. On the Index, the EAC came first with a score of 0.540, followed by the Southern African Development Community (SADC) which scored 0.531, and ECOWAS...

The year 2016 had a number of shocking global economic events, notable among which was the British exit from the European Union famously termed as the Brexit. This development came from a shock referendum whose results defied the predictions of many professional pollsters. There are several economic issues that informed the majority decision. To the British, it is those economic issues that seem to have made the EU seem more of a baggage than a benefit to them. Given that the East African Community (EAC), is an economic bloc built along similar tenets like the EU economic bloc, one needs to ponder whether such economic issues exist and could, therefore, potentially affect the EAC. Only taking early lessons and any appropriate corrective measures by the EAC member states would avert a future EU-Brexit situation in another economic bloc such as the EAC. The most visible 'Brexit' impact on the EAC was the fall in the value of the Pound Sterling. The Pound was massively sold off, which resulted in a rough 7 per cent decline relative to the Ugandan Shilling. For example, around June 2016 before the vote, the Pound was selling averagely at Shs4,884 and a week after the referendum, it was selling at an average of Shs4,483. The positive effect of the decline in the value of the Pound was to reduce the cost of studying and travelling to the UK. However, it made imports in Britain from the EAC such as flower cuts, vegetables and coffee less...