As the East Africa region grows fast in Africa, policies to promote transformation of transport to economic corridors should be put in place to facilitate more dynamic movements of people, goods, services and money. Presenting the working paper on 'Dynamism and Future prospects of Economic Corridors in the East African Region', Chairperson for DAIMA Associates Limited, Prof Samuel Wangwe, said in the recent years new economic movements have emerged. "Growth poles which are an agglomeration of production, logistics and consumption centres have also emerged. Those growth poles have been connected more deeply through transport corridors and by so doing those corridors have been transformed from simple transport corridors to economic corridors," he noted. He said planning the corridor development and its surrounding area can maximise development benefits through engagement of public-private partnership for sustainability. DAIMA Chairperson said prioritising economic potential available in transportation corridors should be given priority by creating friendly business and trade policies. Expounding further he said through absorbing energies from Indian and Arabic world across the Indian Ocean, the region has witnessed more dynamic movements of people, goods, service and money along the economic corridors. As the corridor will not grow without doing anything, he said developing master plan to study them and growth poles was important. The plan will assist in implementation of projects and executing the transformation of process. Japanese International Cooperation Agency (JICA), Senior Representative, Mr Amatsu Kuniaki, said they commissioned DAIMA Associates to produce the working paper with interest in looking at the...

Singapore is embracing the East African Community Singapore has its eyes on the East Africa Community (EAC). The economic bloc is formed by Kenya, Tanzania, Uganda, Rwanda and Burundi and is home to more than 157 million citizens. The EAC had a combined GDP of US$147bn in 2014 and an average annual GDP growth of over 6% projected for the coming two years. Huge investment opportunities arise there at an increasingly fast rate and Singapore is taking steps to grow in this market. In recent years, the EAC has started various infrastructure projects to improve the connection between its members, ultimately decreasing the cost of doing business and making the bloc more attractive to trade with foreign countries. Singapore is enjoying this opportunity. The city-state has traded more than $400m with the EAC alone in 2013. Singapore is currently involved in various businesses in the region, ranging from agriculture to digital logistics solutions, and is eager to expand its presence even more. This pace will increase as legal frameworks and institutions covering the whole EAC bloc gain strength and eliminate corruption in the region. Basic infrastructure problems are being solved to promote an easy flow of goods and services in the region. Challenges that the EAC faces are mostly related to poor infrastructure, such as inefficient border posts, road blocks, transit road weighbridges, long clearances at ports, and poor roads and railways. Corruption is also a problem. These challenges, however, in themselves constitute opportunities for companies understanding Africa and willing to...

By: JAMES ANYANZWA. The East African Community has formed a 25-member taskforce to revise the region’s Common External Tariff (CET) and fine-tune the existing rules of origin to boost intra-regional trade and attract new investments to the bloc. The taskforce comprises four experts on tariffs, fiscal policy, trade and statistics from each of the five member countries — Kenya, Uganda, Tanzania, Rwanda and Burundi — plus one representatives from the private sector, notably associations of manufacturers or chambers of commerce from each of the member states. The timelines for the completion of the exercise have also been revised from July to September 2017. The EAC Council of Ministers agreed that the 12-year-old CET has failed to live up to the expectations of the changing business environment with some member states and manufacturers blaming the three-band tariff structure for loss of revenue and a drop in intra-regional trade. The current CET is based on three bands of 25 per cent for finished goods, 10 per cent for intermediate goods and 0 per cent for raw materials and capital goods, with a limited number of products under the sensitive list that attract rates above the maximum rate of 25 per cent. Kenya hopes to rally other EAC member states to increase the tariff bands from three to four to be responsive of the needs of industries that import industrial inputs. “The dynamics in the region have changed and therefore there is a need for the CET to be reviewed to reflect the current...

Kenya will later this month know whether its bid to build a customs union with its neighbours still holds. East African Heads of State will meet in Arusha on February 28, where one of the items on the agenda will be the signing of the Economic Partnership Agreements (EPAs). Trade Principal secretary Chris Kiptoo told People Daily in a telephone interview that EAC countries are supposed to sign the EPAs as a bloc so that they can enjoy quota and duty-free market access. However, he said, Kenya has no issue to raise during the summit on the EPAs as it has already signed and ratified the trade pact with EU. “As required under the principles of the EPAs Kenya has signed and ratified the trade protocol, only awaiting the other partners to follow suit. But all the EAC countries are individually supposed to sign and ratify the trade deal and collectively sign the document with the EU,” said the PS. The deadline for the EAC member states to sign the trade agreement as a bloc was set for October 1, 2016 but there has been resistance from some countries. The EU parliament, on request by Kenya, agreed to extend the deadline to February 2. The deadline is over and only two countries have signed.  Kenya has signed and ratified while Rwanda has only signed. Tanzania has refused to sign, claiming the agreement would have serious consequences for its revenues and the growth of its industries. Uganda has expressed a commitment...

Claims that some East African Community Partner states did not voted for Kenya’s nominee to the African Union Commission Chairperson seat, must not be allowed to affect the bilateral relations between the EAC countries. The loss of Kenya’s Foreign Affairs Cabinet Secretary, Amina Mohamed’s bid for the AU top seat must not affect the unity of the East African Community. Instead, the loss should be an eye opener on the deep rooted cracks existing within the community. Consequently, our leaders must put all the cards on the table and forge the way forward if the community is to remain united and vibrant. Kenya’s disappointment is understandable. The country sent diplomats across 53 countries during the three months intensive lobbying season seeking for votes, where close to $3.5million was spent. All the same, the loss should not be seen as a Kenyan defeat but as an East African Community loss. The claims that Amina lost to Chad’s foreign affairs minister Moussa Faki Mahamat after seven rounds of voting due to the refusal by Uganda, Djibouti and Burundi to vote for Kenya are damaging to the unity of the EAC to say the least. Already, Uganda has dispelled claims that it voted against Amina Mohamed after Kenya said she will review her bilateral relations with her neighbours. Uganda’s Ministry of Foreign Affairs said this claim was unsubstantiated and false. It was a noble move for Uganda which immediately released a statement reiterating her support to the candidature of Amina before and during elections. In...

EDITORIAL Economic experts have advised the East African Community (EAC) and Uganda, in particular, to consolidate regional markets and forget about signing the EAC-European Union (EU) Economic Partnership Agreement (EPA). Civil Society Organisations in Uganda say EAC countries are better off improving trade within the region than sign a trade agreement with EU. They claim the pact is unfair to the EAC. EPA is a reciprocal free trade agreement between Europe and EAC whose negotiations were launched in early 2000s. It mainly seeks to ensure these weak economies develop sustainably, integrate into the global economy, but also give back to Europe through trade. The EAC-EU EPA negotiations were concluded in October 2014 with a hope to sign the deal in July 2016. Rwanda and Kenya signed but Burundi, Uganda and Tanzania are yet to. Tanzania made a decision not to sign, citing negative implications on her industrialisation. And although Uganda initially wanted to sign, it has since backtracked on the instructions of the President; and Burundi has not signed because it is under EU sanctions. It is important to understand the reasons why some members are hesitant to sign. EPA does seem to read well, and one will realise it falls short of protecting EAC's overall interests as it 'thinks' East Africa will never become producers of manufactured or capital goods. In its current form, the EPA deal, according to the CSOs advocating for fair trade deals, will compromise the EAC efforts to structurally transform their economies, hence retarding regional...

A delegation from the Bureau of International Recycling (BIR) has travelled to Nairobi to meet trade advisors from the World Bank, to discuss the future of the trade in used textiles to East Africa. The group included BIR President Ranjit Baxi and Textiles Division President Mehdi Zerroug whose visit to Kenya was focussed on proposals to phase out the imports of used textiles and footwear into the East African Community (EAC) by 2019. The EAC comprises six countries: Uganda, Kenya, Tanzania, Rwanda, Burundi and South Sudan. In March 2016, the heads of state of the EAC agreed to phase out used clothing imports with a view to promoting industries in the textile and leather sectors within their own countries.Backing for the trip also came from the UK’s Textile Recycling Association (TRA) with a number of its members also contributing to the funding of the meeting. Trade The trade in used clothing is an important market for some of the UK’s textile recyclers, with estimates suggesting that as much as 15% of the used clothing exported from the UK finds its way to EAC nations. And, the trade in used clothing is also thought to be important within the EAC nations themselves, with the imports providing an affordable source of clothing and employment opportunities. BIR met with trade advisors from the World Bank whose work in Kenya aims to accelerate sustainable growth, reduce inequality, and manage resource scarcity, in a bid to discuss potential for a review of the decision by...

Kenya Revenue Authority (KRA) will replace the obsolete Simba System with a modern integrated customs management system to curb tax evasion by June. KRA said yesterday the Simba System, used in the clearing of imports by custom agents, was no longer tenable as it has glaring loopholes that rogue agents exploit to evade paying duty. KRA Commissioner for Customs and Border Control Julius Musyoki said in Mombasa the system also experiences prolonged downtime, leading to delay in movement of cargo from the port of Mombasa. “Implementation of the new integrated customs system will start at the end of next month, when we will do the piloting before commissioning it in June,” said Mr Musyoki during a meeting on capacity building for the East and Southern Africa region sponsored by the World Customs Organisation. He said the new system, whose implementation is being financed through a Sh1.1 billion financing from the Government and TradeMark Africa, will be fitted with special features to carry out automated evaluation of the value of cargo to help address the perennial challenge of cargo under-valuation. Other benefits of the new system include being able to integrate to the Regional Electronic Cargo Tracking Platform. The platform, which has already been agreed by Kenya, Uganda and Rwanda, will use one system that enables all countries to monitor the movement of cargo from the Mombasa Port to its final destination. “This approach will eliminate the opportunities presently exploited by tax evaders at the changeovers of seals at boarder points...

IN SUMMARY The passenger train plying the 472km Mombasa-Nairobi route will take an estimated four and a half hours. Passengers travelling to other towns between Nairobi and Mombasa will have to rely on the second option, the Inter-County service which will make seven stops. The cargo fleet are expected to maintain “an average practical speed” of 60 km per hour. Imagine boarding a train at dawn in Nairobi to attend a breakfast meeting in Mombasa and by early afternoon, you are back for your day-to-day business in the city. That sounds revolutionary for a country where travelling one-way by train is currently a whole day experience. Or picture a case where many of the little-known towns along the Mombasa-Nairobi route have suddenly become commercial and manufacturing hubs, something that has eluded them since Independence more than 50 years ago. Only four months to the launch of Kenya’s fast Standard Gauge Railway (SGR) train, there appears to be no let up in feel good promises as State officials continue to paint a picture of an efficient modern transport system that awaits the country as it prepares to put the new line to use. President Uhuru Kenyatta is expected to celebrate this year’s Madaraka Day by riding on the fast train from Mombasa to Nairobi on June 1. The Kenya Railways Corporation (KR) said the Intercity Express, the passenger train plying the 472km Mombasa-Nairobi route will take an estimated four and a half hours. The agency’s chief executive, Atanas Maina, said the...

DAR ES SALAAM, TANZANIA - Tanzania should open up its Dar es Salaam port  to trudge cargo volume, expand and build new transport links to make Tanzania a regional hub while turning the country as Dubai of East Africa, the East African Business Week can report.  “The Dar es Salaam port is an engine for economic growth, if we invest in logistic centers, improve on infrastructure and create a facilitative environment, we can easily turn Dar es Salaam into another Dubai of its kind in East Africa,” said Tanzania China Mining Association Chairman Superintended Andrew Huang. The fifth phase government under Dr. John Pombe Magufuli has a chance to use effectively the Dar es Salaam port to increase 100% of the country source of revenue to foster the city to become a Dubai of the East Africa region. Speaking to East African Business Week exclusively,  Andrew Huang said the measures taken by President Magufuli have removed bureaucratic hurdles hence promote cargo volumes from neighboring countries and abroad. He said it is easy to attract all large investors and make Dar es Salaam a huge financial center by allowing and encouraging colossal banks to invest and conduct financial business and market in the country. Huang noted the city of Dar es Salaam deserved to have well-constructed roads, railways to the central line, buildings, malls and fast track it as a satellite city ready for massive investment from international business people. Tanzania, just like its neighbor Kenya, wants to capitalize on a...