TANZANIANS need to dump their inferiority complex as the integration process in East Africa gathers pace towards monetary union because the country is set to become a leading economic powerhouse in the region. This is a general view shared here on Sunday at a seminar for Members of Parliament (MPs) on the Protocol to establish the East African Monetary Union to pave the way for a common currency. The protocol for East African Community Monetary Union signed by leaders of the five countries of EAC member states in Kampala, last November is expected to be tabled in the National Assembly for ratification later this week. Officials from the Ministry of East African Cooperation say the myth that Tanzania will be swallowed under the regional integration should be debunked as it is based on a wrong premise. An official with the ministry, Mr Abdalla Makame, said future prospects for Tanzania under the EAC regional integration were bright as the country has comparative and competitive advantages over other members. In his presentation at the seminar, he said the country was set to become a leading economic powerhouse in the region due to its rapid expanding economy, its enormous natural resources , as well as its strategic geographical position and strong macroeconomic policies. Kenya is currently the leading economy in the EAC with a GDP of US$ 39 billion and a growth rate of 4.6 per cent for 2013 figures. Tanzania follows with a GDP of about US$ 30 billion and a 7...

TANZANIA will strive to promote intra-Africa trade, an important initiative that presents opportunities for sustained growth and development. Intra-African trade has the potential to reduce vulnerability to global shocks, contribute to economic diversification, enhance export competitiveness and create employment. This was said by the Deputy Permanent Secretary in the Ministry of Industry and Trade, Ms Maria Bilia, at the workshop on boosting the intra-Africa Trade held in Dar es Salaam. “The country’s initiative to be a member of the regional communities expresses its deep desire to promote and boost Intra-Africa Trade that could in return help in transforming the economy,” she noted. The government is committed to remove all internal trade barriers which have staggering the free flow of investments into the country due to high cost of doing business. The most recent initiative is the decision to execute the Single Custom Territory in the East African Community (EAC), with an ultimate goal of creating free movement of goods in the region and reduce the cost of doing business. The Single Customs Territory will come into full implementation next month. Tanzania membership in the EAC and the Southern African Development Community (SADC) has bolstered the country’s competitiveness in export trade due to the large market size present in the regions. Boosting Intra-Africa Trade for the African countries has an ultimate goal of creating a wide market as well as a continental free trade area. Speaking on the benefits of Boosting Intra-Africa Trade for Continental Free Trade Area (CFTA), Dr Halima...

A meeting bringing together Kenyan business people and close to 60 representatives of Israeli companies in Nairobi has signalled a potential step towards correcting the trade imbalance between the two countries. Kenya’s exports to Israel in the last five years recorded a $11.3 million (994 million) increase from $12.9 million (Sh1.13 billion) in 2007 to $24.2 million (Sh2.2 billion) in 2012. But despite this increase, the Ministry of Foreign Affairs and International Trade says Kenya still imports more from Israel hence the balance of trade is tilted in favour of her trading partner. “Imports from Israel have increased from $51.6 million (Sh4.5 billion) to $85 million (Sh7.5 billion) in the same period. Bilateral relations are often measured by the growth of trade between the two countries but as demonstrated here, the balance of trade is clearly in favour of Israel,” said Cabinet secretary Amina Mohamed while opening the business forum yesterday. Yesterday’s meeting between Kenyan and Israeli business people was the second, with the first held in 2009. Kenya exports fish, coffee, flowers, paper and wood products, precious stones and metals, while imports from Israel include transport and telecommunication equipment, machinery, rubber, plastics and chemical products. The Kenya-Israel Business Forum heard that about 50 companies in Kenya are owned by Israelis or represent Israeli firms. “A number of these firms export their products to Israel as well as to other countries,” said Mohamed. The two business groups agreed there remains huge unexploited potential for increasing trade between the two countries....

East Africa’s second largest economy, Tanzania has recorded the fastest growth in the East Africa Community (EAC) partner states for the period of 2013. Deloitte’s Economic Outlook 2014 shows that Tanzania’s economy grew by 6.9% in 2013 and there are expectations that growth will hit the 7% mark in 2014 and 2015. “Gas discovery is expected to spur growth in Tanzania as it will give a seismic hydrocarbon boost to the economy in the short term,” Deloitte’s Acting Tax Director, Mr. Chris Frank said. According to the report, Tanzania’s agricultural sector which grew by an estimated 4.3% in 2013 has been driven by increased production of the major food crops such as maize, paddy, millet/sorghum and cassava. Deloitte’s Frank told East African Business Week in Dar es Salaam last week during the launch of the Budget Insight 2014 that good rains coupled with the government’s provision of subsidized farm implements have boosted agricultural performance. Despite these developments, the report said Tanzania’s financial sector remains characterized by a nascent stock market and insurance subsector. In addition, the report added there are limited financial instruments and institutions that offer long-term and development financing. In Uganda the Deloitte report said its economy has rebounded sharply to post a 6.0% GDP expansion in 2013 following a very soft 2.8% in 2012. In 2012, the Bank of Uganda had pursued a very aggressive monetary policy stance which continued in the initial part of 2013 and thus managing to wrestle average monthly consumer price inflation for...

Crossing East African Community (EAC) borders has until recently been characterized by repetitive procedures and considerable wasted time, especially for business people. Routinely, importers would comply with Customs requirements in neighbouring countries before doing the same in their own. This adversely affected the flow of regional trade due to duplication of effort. One Stop Border Posts (OSBP) being set up across the EAC are meant to do away with all that. According to information from Uganda Revenue Authority (URA) the idea is already off the paper. Structures have started rising on Uganda’s borders with neighboring countries. Recently, the Uganda-Rwanda OSBP was launched in Katuna, South Western Uganda. During the handover ceremony, URA Assistant Commissioner Customs Audit, Dickson Kateshumbwa said the OSBP would enable “seamless flow of goods”. “URA has modernized its systems. However, with infrastructure and facilities in a bad state, goods would not move fast. All this will change when the facility is constructed because all officials will be in one office,” he said. The ceremony took place a stone throw away from the existing URA office, to the contractor Amogoli General Enterprises, signified the beginning of a 12-month construction period. The Ush8.9 billion (about $3.4 million) facility will sit on an eight acre piece of land not far from the Rwanda border. It will comprise of a customs facility, together with units for immigration, security, commercial service providers and access roads adjacent to parking yards. The World Bank has funded the OSBP while the European Union will provide...

East African countries face a budget deficit of $6 billion in the next financial year amid narrowing funding options due to the region’s high debt levels, limited revenue sources and unpredictability of key donors. Kenya, Tanzania, Uganda and Rwanda face $3.4 billion, $2.2 billion, $311 million and $261 million respectively in budget deficits. The total deficit equals about 15 per cent of the region’s $40 billion budget. The four countries have budgets of $20 billion, $12 billion, $5.5 billion and $2.2 billion respectively. The huge deficit, coupled with weak economic growth outlooks and the historical underperformance of tax authorities in the region, has raised concerns over its ability to implement key infrastructure projects in the next financial year. Kenya is pegging its hopes on improved economic performance and efficient tax collection to finance its budget. But there is already concern that the country may not grow as fast as was predicted due to rising insecurity, which has affected tourism — a key foreign exchange earner for the country. The agricultural sector, another key driver of the economy, is also underperforming due to the vagaries of the weather. Tea prices have hit rock bottom — a result of oversupply in the international market. In the next financial year, the Kenya Revenue Authority is expected to collect Ksh1.18 trillion ($13.56 billion) to finance 83.6 per cent of the budget. Last year, the authority collected Ksh800 billion ($9.2 billion) against a target of Ksh881 billion ($10.1 billion). In Tanzania, the revenue authority collected...

Trade is an excellent kindle for igniting growth, jobs and socio-economic gains. For this to occur, trade has to be effectively harnessed and sustainably exploited. This requires market information, trade intelligence, skills upgrade, productive capacity and an enabling business environment. In many respects, these elements are ‘Business 101’ of what any economy needs to grow more, attract increased and more diverse investment, and better distribute the gains of increased trade. But for some economies, including in Africa, getting this right policy mix can be challenging. The potential on the continent to develop deeper and wider is well recognised. With a rising middle class, more focused innovation especially among the youth, greater participatory governance and a more varied basket of partners, Africa is on the cusp of moving to another level of economic development. A key to achieving this is to ensure a good business environment for small and medium-sized enterprises. SMEs are at the heart of Africa’s dynamism and by enhancing their trade competitiveness and boosting the skills of their workers, more of them can become part of the regional and international value chains. These value chains offer market opportunities, transfer of technologies, and in a growing number of cases, a path to greater diversification. Kenya has an advantage and an opportunity. It has much to teach and to share with and to learn from its neighbours in Africa. With its strategic geographical location, natural and human resources , Kenya has the opportunity to further exploit its position as the...

Kenya has stepped up the pursuit for new export markets in a fresh mission that will see it boost trade ties and address it’s current account deficit. The Kenya National Chamber of Commerce and Industries leads a delegation of 60 businessmen on Wednesday to meet business experts at a global trade forum in Uganda. The meeting is expected to improve trade ties between Kenya and other East African countries. The country is also engaged in talks with Nigeria and Poland to boost its exports there. At the forum, Kenyan businessmen will have a chance to enter business deals with their peers worldwide as they gather ideas that will influence public policies across the East African Business community. According to Cabinet Secretary for East African Affairs, Commerce and Tourism Phyllis Kandie, exposing Kenya’s top business minds to new markets presents an opportunity for growth and investments. “We are pursuing regional markets aggressively to increase chances of meeting the 20 per cent annual export growth targeted under Vision 2030,” said Mrs Kandie. This is one of the many moves by Kenya to boost business in the region since the delegation’s visit to Nigeria. The tour in May culminated into several bilateral trade deals with an one that would see Kenya directly export tea and flower to the country. Nigeria is set to reciprocate the visit in June 30 to cement talks on bilateral trade. Chairman of joint Kenya Nigeria chamber of commerce James Mwangi said the country expects a lifting of a...

Observers have said that trade within the East African Community has improved tremendously as the regional integration within the bloc has spurred the movement of goods and services across the borders. Speaking to The Observer recently, Isaac Shinyekwa, a trade and integration research fellow at the Economic Policy Research Centre (EPRC), said trade in the region had shot up. In a recent study, where he looked at whether the integration had created or diverted trade, Shinyekwa found that trade between Uganda, Kenya, Tanzania, Burundi, and Rwanda, had more than doubled from $1.8bn in 2005 to $4.9bn in 2011. “Kenya overall contributed to an average share of over 40 per cent of total intra-EAC trade and enjoyed a trade surplus with its EAC partners during the period,” the study, titled Trade Creation and Diversion Effects of the East African Community Regional Trade Agreements, noted. The study assessed trade flows in the region between 2005 and 2011. Kenya is the largest contributor to intra-EAC exports while Uganda is the largest regional importer with 37 per cent of intra-EAC imports, according to the study. Kenya recorded 57.2 per cent of the total exports in the same period. Trade was majorly driven by a reduction in tariffs and non-tariff barriers (NTBs). “Even when we see Uganda being like the market for Kenya, and Kenya being the powerhouse with trade volumes higher than ours, it is still a plus,” Shinyekwa said. “We [Uganda] also export to DRC and South Sudan, whose manufacturing capacity is still...

Execution of Single Customs Territory (SCT) will curb cheating in cargo declarations, thus increasing revenue collection, so says the Tanzania Revenue Authority (TRA). The TRA Commissioner General, Mr Rished Bade, told an awareness workshop to stakeholders on implementation of the SCT that the system will have special mechanism of monitoring the whole process from declaration of the cargo to its destination. Experience from the northern corridor constituting the countries of Kenya, Uganda and Rwanda which piloted the SCT since February this year, shows that the implementation of the new system has controlled false declarations and increased revenues. “The practice of evading payment of proper tax by making false declarations will be arrested with the implementation of the SCT,” he said. With the SCT the malpractice by which some traders used to make false declarations that the cargo is in transit, but later diverted to the local market and deny the government much needed revenue will be put under control. Mr Bade said the workshop is meant to impart knowledge to clearing agents, importers and exporters on the new system to be applied in the SCT to ensure it delivers the maximum expected results. “It is the obligation of clearing agents to inform importers and exporters on how the system works,” he said. He allayed fears to clearing agents that the implementation of the SCT will rob their clearing and forwarding functions. Instead, all the clearing and forwarding functions will be conducted by the agents but in a new system. He...