One of the most talked about issues in Kenya currently is the Chinese-funded and built railway line connecting the capital Nairobi to the port city of Mombasa, on the shores of the Indian Ocean. This East African nation has reason to celebrate. Mombasa is a crucial hub for trade, business and pleasure and it is therefore a city of interest for many across the East African region. The new railway line is so significant that for weeks now the government and opposition have been locked in a war of words over who deserves to take credit for this milestone. It is about 122 years since a railway line was launched in this country and Kenyans are optimistic that the socio-economic impact will be astounding. Many are already enjoying the benefits. Travelers to Mombasa who could not afford the expensive flights had to resign themselves to the bus, which takes nine to 10 hours and costs between about $12 and $20, depending on the season. When there is a mishap on the road, as often happens, the trip can be much longer. With the new trains it will take about four hours to travel between the two cities. When President Uhuru Kenyatta launched the new railway line, he offered an introductory fare of $7. But fares will soon be revised to a standard $9. Those who want to travel in the more luxurious first class will have to pay about $30, which is still an attractive offer for many. The train's...

Inadequate funding may force the East African Science and Technology Commission (Easteco) to halt some of its activities. A recently-released report by the East African Legislative Assembly (Eala) said the approved budget from the 2016/2017 financial year was inadequate to cover major activities of the institution of the East African Community. The critically affected activities include evaluation of technologies for agricultural products, establishment of a regional journal of scientific research and technologies and convening annual youth innovation forum. During the current fiscal year ending on June 30, Easteco was allocated $1,196,138 for its expenditure, comprising $ 676,076 from the partner states and $520,066 from the general reserves. But by February this year, only $424,623 had been received from the partner states -- Tanzania, Uganda, Kenya, Burundi and Rwanda -- and $ 100,000 from the EAC General Reserves. According to the report by the Eala Committee of Accounts,which was tabled before the Eala plenary session held here recently, the Kigali-based institution received was equivalent to 44 per cent of its 2016/2017 budget. Due to the funding constraints, a big chunk of the money - 64 per cent -went to salary and employee benefits, administrative costs 25 per cent while programmatic and related expenses consumed only eight per cent. "The commission is constrained to the extent that in addition to untimely remittances, it is subjected to zero increment of budget," the report said, warning: "Always paying salaries and administrative expenses without activities to achieve the objectives defeats the purpose for which the...

The East Africa Business Council (EABC) is scheduled to elect new leaders that will drive the organization’s agenda and mandate for the next one year, at an annual general meeting in Kampala on Friday. The meeting which will be attended by members from the five regional countries is expected to elect the Chair, Vice-Chairs and Members of the EABC Executive Committee. According to the executive director, Lilian Awinja, the new chair person is expected to come from Uganda, in accordance with the rotational principal. “The AGM is the supreme policy making organ of the East African Business Council, and meets once a year to elect the Executive Committee headed by the Chairperson. It also meets to give overall direction to the Secretariat in line with the Strategic Plan and interests of the business community in East Africa,” she said. The East African Business Council (EABC) is the apex body of business associations of the Private Sector and Corporates from the 5 East African Countries. It was established in 1997 to foster the interests of the Private Sector in the integration process of the East African Community. Awinja said the new board of directors will play a critical role in spearheading advocacy on regional trade issues on behalf of the Private Sector in East Africa. The EABC Board of Directors consists of 22 members headed by a Chairperson, who is elected from the 5 Partner States on an annual rotational basis. Out of the 22 members 4 are Vice Chairs from...

"We have to understand that our industries are operating in a global context, in an open globalized market place, and that is not going to change. We have to be innovative and work on our efficiencies. We should be able to produce high quality products that are competitive at international markets,” said Ali Mafuruki, board chair of Trade Mark East Africa. He added that regional economies should strategically position themselves in the global business environment through producing locally made products that are price competitive. Rwanda hosts the forum from May 23 to 25, 2017 dubbed “harnessing the Manufacturing Potential for Sustainable Economic Growth”. The three-day meeting includes an exhibition where investors, enterprises, researchers and academia will collectively showcase new products and services as well as exhibit the latest advances in manufacturing technology and innovation, particularly those with relevance to Small Medium Enterprises. Lilian Awinja, executive director of East African Business Council (EABC), called for innovative strategies that will raise competitiveness levels and expand the region’s manufacturing and export base. “Innovations are now shaping the business environment. We need to add value to products produced in EAC. Our regional industries can now begin to raise manufacturing output and increase its share of global trade and production,” she added. Mukhisa Kituyi, secretary-general of United Nations Conference on Trade and Development (UNCTAD) said manufacturing sector in East Africa needs to develop innovative approaches that are essential for local products to compete favorably at global markets. “We should reduce the importation of cheap products...

VCN- According to the World Customs Organization (WCO), the WCO successfully conducted a five-day workshop from 22nd to 26th May 2017 at Nairobi, Kenya to review and develop a new regional risk management strategy pack for the EAC Customs Region. The workshop was conducted under the WCO EAC CREATe Project, financed by the Government of Sweden. The workshop brought together Risk Management experts from Customs administrations of the EAC Partner States and was facilitated by a WCO expert supported by SACU Risk Management experts. The SACU Region recently developed a similar strategy and this activity was the perfect platform for the SACU region to share its experience and further enhance regional cooperation between different Customs Union of Sub-Saharan Africa. The Regional Risk Management Strategy pack which outlines a strategy for the region, risk management criteria and templates for regional risk register draw from the objectives of the EAC Customs Union and the EAC Customs Union Strategy. The implementation of the 5-year Strategy will see the EAC adopt a harmonized approach to Risk Management which will include common definitions of risks, harmonized risk criteria, and the sharing of intelligence information among Partner States Customs administrations. At the opening of the workshop, Mr. Peter Ng’ang’a who represented the Kenya Revenue Authority Commissioner for Customs underscored the importance of a regional approach to Risk Management especially in regard to the nature of risks that tend to transcend borders and noted that the new strategy will come in at the right time as the EAC embarks...

Flights between East African countries will be classified as domestic travel by the end of this year. This is expected to lower the price of air tickets and increase the number of air passengers if an agreement is signed between regional aviation regulators. 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. The Kenya Civil Aviation Authority said that following negotiations with their counterparts in the region, the recommendation was agreed to in principle. They are now pushing their respective governments to sign the agreement, said KCAA director-general Captain Gilbert Kibe. Air travel in East Africa has grown by 3.4 per cent in the past decade – against a global growth rate of 5.5 per cent – a trend attributed to high intra-EAC air fares. Debt burden It is estimated that 43 per cent of air ticket prices in the region comprise regulatory charges and taxes, with regulatory charges accounting for up to 24 per cent, hence the need to review the pricing structure. A recent study commissioned by the East African Business Council showed air liberalisation could lead to a reduction in air fares of 9 per cent and a 41 per cent increase in frequencies, which in turn stimulate passenger demand. This, the report notes, could result in an additional 46,320 jobs and $202.1 million per annum in revenues in the...

TANZANIA’S government signed a US$154 million contract on Saturday with state-run China Harbour Engineering Company to expand the main port in the commercial capital, Dar es Salaam. Tanzania is seeking financing for infrastructure projects as it aims to turn the country into a regional transport and trade hub. Under the contract funded by a World Bank loan, CHEC, a subsidiary of the state-run China Communications Construction Co Ltd, will build a roll-on, roll-off (ro-ro) terminal and deepen and strengthen seven berths at Dar es Salaam port. Tanzania hopes expansion of the port will increase container throughput to 28 million tonnes a year by 2020 from around 20 million tonnes now. “Deepening and strengthening of the berths will allow big container ships to dock in Dar es Salaam. All these efforts are being done in order to increase competitiveness of the port,” works, transport and communications minister Makame Mbarawa said at the signing of the contract. Source: LIve News Today

Tanzania’s government signed a $154 million contract on Saturday with the state-run China Harbour Engineering Company (CHEC) to expand the main port in the commercial capital, Dar es Salaam. Tanzania is seeking financing for infrastructure projects as part of its plans to transform the country into a regional transport and trade hub. Under the contract funded by a World Bank loan, CHEC, a subsidiary of the state-run China Communications Construction Co Ltd, will build a roll-on, roll-off (ro-ro) terminal and deepen and strengthen seven berths at Dar es Salaam port. Tanzania hopes expansion of the port will increase container throughput to 28 million tonnes a year by 2020 from around 20 million tonnes currently. East Africa’s second-biggest economy wants to profit from its long coastline and upgrade its rickety railways and roads to serve the growing economies in the land-locked heart of Africa. Big gas finds in Tanzania and oil discoveries in Kenya and Uganda have turned East Africa into an exploration hotspot for oil firms, but transport infrastructure in those countries has suffered from decades of under-investment. Tanzania said in January it will receive a $305 million loan from the World Bank to expand its main port, where congestion and inefficiencies are hampering service delivery. The port, whose main rival is the bigger but also congested port of Mombasa in Kenya, acts as a trade gateway for landlocked African states such as Zambia, Rwanda, Malawi, Burundi and Uganda, as well as the eastern region of the Democratic Republic of...

A delegation of Indonesian businessmen has pitched camp in the country to scout for business opportunities. The delegation, which is being hosted by the Kenya National Chamber of Commerce and Industry (KNCCI), on Friday expressed interest in putting money in various sectors such as infrastructure, finance, textiles, energy and tourism. The group said Kenya showed much promise in these sectors compared to other African countries. STRICT REGIME Speaking on behalf of the delegation, Indonesian vice Minister for Foreign Affairs A M Fachir said other Asian countries such as China and India had proved how worthwhile it was to do business in Kenya. Mr Fachir, however, decried Kenya’s strict tariff regime in its trade with Indonesia, but said he hoped the Government would review the same to ease investment in the country. “The value of our bilateral trade is still far from reaching its full potential. Trade between us stands at Sh4.59 trillion. This is a relatively low for both countries, which have total combined GDP of nearly $924 billion (Indonesia - Sh861 billion, Kenya - Sh63 billion),” he said. KNCCI Vice Chairman James Mureu lauded the Indonesian Government for its interest to invest in Kenya, terming the country Africa’s trading hub. “Kenya has potential and is entirely ready for the collaboration between the two governments,” he said. The balance of trade between the two countries is largely in favour of Indonesia. Source: Standard Media

Cost effectiveness and operational efficiency are going to be crucial in ensuring the recently launched Standard Gauge Railway (SGR) achieves its great promise of being a game changer in the country’s economy. The first dynamic is the time factor. There are certain goods that are perishable, especially agricultural products, and SGR will make access to markets faster. Passengers will also now move faster between destinations, and so have more time. The second issue is cost efficiency. Transporters will now take advantage of technology in cost reduction. For them, the key is that it will cost less to move a tonne of cargo. Further, there are substantial savings to be made. One is reduction in fuel. In SGR, fuel efficiency is very high at between 35 and 50 per cent. Maintenance costs will be brought down because of the nature of infrastructure. Because of the expected substitution of road transport with SGR, usage of tyres by trucks will go down. Tyre replacement is one of the major costs in transport, and this will result in substantial savings to the economy. Also, the substitution will see an estimated reduction of at least 30 per cent in fuel used by trucks as haulage shifts to SGR, a further saving to the economy. The next dynamic is the axle factor. SGR gives Kenya Railways the opportunity to increase the load that can be carried on the trains. According to experts, if you can increase the throughput of one wagon, then that’s an advantage. Currently,...