An African Union agency has adopted the Lamu Port-South Sudan-Ethiopia (Lapsset) corridor among 16 flagship infrastructure projects , in what will see more foreign countries fund the mega project. The New Partnership for Africa’s Development (Nepad) secretariat said Lapsset is one of the 16 projects in energy, transport and ICT which are in its Programme for Infrastructure Development (PIDA). A total of 51 projects initially applied to be listed under the programme. The ranking comes as Kenya seeks foreign governments and private investors to help fund the transport corridor. The PIDA list comes ahead of Dakar Infrastructure Financing Summit which will bring together lead government agencies, development finance institutions, private equity investors, infrastructure funds, commercial banks, pension funds, and insurance companies. Expansion “We expect 16 heads of state attending the Dakar Financing Summit to make major breakthroughs because we don’t want to rely on donors for these high-impact projects,” Dr Ibrahim Mayaki, CEO of Nepad, said in Nairobi on Monday. Kenyan government is spearheading the Sh2.2 trillion ($25.5 billion) project to link landlocked South Sudan and Ethiopia to the Indian Ocean port of Lamu by constructing a major highway, a railway and an oil pipeline, which would take many years. Kenya says Lapsset corridor project will add two to three per cent to Kenya’s economic growth, but critics have reservations over the project, arguing the money would be better spent upgrading Kenya’s existing infrastructure. The Lamu port, where tenders to build berths have been issued to a Chinese company, will...

Arusha — The East African community Sectoral Council on Trade, Industry, Finance and Investment (SCTIFI) is underway at the EAC headquarters in Arusha, Tanzania. The 27th -30th May meeting will be held through the sessions of Senior Officials; the Co-ordination Committee (Permanent Secretaries); and the Ministerial session. The four-day meeting which brings together the Ministers responsible for these dockets in the EAC Partner States will be discussing a report on the implementation of previous decisions of the SCTIFI,a report of the Pre-Budget Consultations of Ministers of Finance, a report of the Committee on Customs and Challenges of the Motor Vehicle Assembly Industry in the EAC. It also expected to consider a report of the Sectoral Committee on Trade and a report of the East African Standards Committee.The Ministerial session of the Sectoral Council on Trade, Industry, Finance and Investment (SCTIFI) meeting is scheduled for Friday 30 May 2014. Addressing the official opening of the Senior Officials on behalf of the Secretary General,EAC Director General of Customs and Trade Mr Peter Kiguta echoed the critical role the Sectoral Council plays in the EAC integration process. He expressed EAC Secretariat commitment to collaborating with Partner States to spur efforts towards strengthening the regional integration agenda. Source: East African Community

THE implementation of the Single Custom Territory (SCT) is seen as a crucial move that will reduce costs of doing business and increase efficiency in East African Community customs’ services, but for the Tanzania clearing and forwarding agents it is a blessing in disguise. The SCT is one of the key regional integration priority policy interventions adopted by the EAC member states to consolidate Customs Union. According to Tanzania Revenue Authority (TRA), full implementation of SCT, aimed at eradicating trade barriers in East Africa, begins on July 1. The Tanzania Freight Forwarders Association (TAFFA) president Mr Stephen Ngatunga said during a workshop on SCT awareness to key stakeholders that the SCT will be a blessing to the business community across the region but it may create heavy losses to clearing and forwarding agents. “Full implementation of the SCT in the central corridor will expose clearing agents” employment opportunities to those from other member states to create unnecessary competitions,” said Mr Ngatunga. He added, “The government should act with caution in implementing the SCT to protect the much needed jobs for its people. It should be an opportunity for creating more jobs and not scaling up unemployment.” However, according to the EAC Customs Union, the effective implementation of the SCT will see the clearing agents and revenue authorities’ staff from all the member states being deployed at customs points to oversee the smooth flow of the system. For example, for the implementation of the SCT central corridor, TRA Deputy Commissioner for...

The Ministry of East African Affairs has warned that introduction of levies on transit goods by border counties is inhibiting trade within the East African Community (EAC). Principal Secretary Mwanamaka Mabruki said the move by counties to levy transit goods will hinder the community’s quest for seamless trade. “Imposing taxes on goods going to EAC member states, especially by counties at the border points, is one of the tariff barriers we are trying to solve. It is hindering trade and increasing the possibility of a retaliation by other EAC members,” she said. Kwale County had in its 2014/2015 budgetary estimates proposed introduction of levies on goods that pass through its jurisdiction from or to Tanzania. However, yesterday Omar Kitenge, member of the county budget committee, said these proposals were removed because “we thought it will go against the constitution.” Mombasa county government, on the other hand, is toying with a proposal to introduce levies on all goods that pass through the Port of Mombasa to broaden its revenue base. The county had proposed introduction of a two dollar levy for every tonne that pass at the Port. Mombasa governor Hassan Joho has over time insisted that the port is the biggest asset the county has and it should therefore benefit from it. However, the PS has warned that introduction of a levy at the port will automatically push up the cost of import and is bound to elicit sharp condemnation from EAC members using the facility. A Mabruki said though...

Members of the East African Legislative Assembly (EALA) will this week begin discussion and debate on the EAC Budget for the next financial year during their current session here. The EAC budget proposal speech, in which over $120 million is set down in estimates will be delivered by the current Chair of the EAC Council of Ministers, Phyllis J. Kandie of Kenya. The EAC budget, which is largely funded by development partners contributing 70%, according to a statement, includes the consolidation of the Common Market, completion of negotiations and movement towards the East African Monetary Union. Other projects that have to be paid for are investment promotion and private sector development, among others. In January, the EALA approved a supplementary budget giving the EAC a go-ahead to expend an additional $ 2.1million for the Financial Year 2013/14 to meet its programmes. ‘The supplementary budget was earmarked for agriculture, trade and customs, the EAC Financial Management Harmonization Project and the strengthening of the East and Southern Africa-Indian Ocean (ESA-IO) Maritime Security Project,’ the Secretariat statement reads in part. Last year, the EALA approved a budget amounting to $131 million to finance the bloc’s activities for the current fiscal year that ends next month. Key reports are to be tabled to the EALA’s two week session include the report of the Committee on Agriculture, Tourism and Natural Resources on the 2nd Parliamentarians workshop on Climate Change and that of the Committee on Communication, Trade and Investments on the Single Customs Territory. In...

Uganda is expected to name the contractors for its 1614km Standard Gauge Railway (SGR) network next week as the Ministry of Works moves to beat a July 9 deadline for that phase of the procurement process. This follows the signing of an SGR Protocol by Kenya, Uganda, Rwanda and South Sudan in Nairobi on May 11. The signing took place on the sidelines of Kenya’s conclusion of a financing agreement for its portion of the network with the Chinese government during a visit to Nairobi by Chinese Prime Minister Li Keqiang. The region set October 2014 as the commencement date for construction of all segments of the regional SGR network that will run from Mombasa through Malaba to Kigali and Juba. The EastAfrican has learnt that President Yoweri Museveni is scheduled to give technocrats authorisation to enter into substantive negotiations with the China Harbour and Engineering Corporation (CHEC) and the China Civil Engineering and Construction Corporation (CCECC) for construction of the northern and western sections of the network respectively. The Works Ministry also wants him to instruct the Ministry of Finance to include Ush545 billion ($212.7 million) provision in the next budget for what is being described as project precursor activities. The proposed budget would among other things cover acquisition of the right of way, engineering and social studies as well as design review and quality assurance. In a series of recent correspondence seen by this paper, Junior Works Minister John Byabagambi has prepared proposals, which will guide President Museveni...

Tanzania is losing over $20 Billion in revenues through tax incentives to investors in the export processing zones and illicit flows, a new survey that calls for tough legislation to stem the loopholes shows. The latest Global Financial Integrity (GFI) report on trade mis-invoicing launched last week found that mis-invoicing of trade facilitated a whopping $60.8 Billion in illicit financial flows out of Tanzania, Kenya, Uganda, Ghana and Mozambique between 2002 and 2011. Gross illicit flows due to trade mis-invoicing in Tanzania alone were $18.73 billion during the period while the government lost another $248 million per year in tax revenue from mining companies alone. Trade mis-invoicing happens either under export under-invoicing or import over-invoicing while through transfer pricing, firms hide their profits from taxation by employing complex county specific strategies — mainly manipulation of prices of cross-border transactions between related affiliates. Analysts in Dar es Salaam now want the Tanzania government to reconsider tax exemptions to EPZs and introduce new curbs to cheating corporations. Raymond Baker, GFI president, said 10-year tax holidays provided to investors under EPZs in Tanzania were being misused by companies to unlawfully move capital out of the country, undermining the roles such initiatives were expected to play in the economy in the first place. “Some of the measures to be taken include adopting a legislation making abusive trade miss-invoicing wherever and however it is done, against the law,” said Mr Baker. Benno Ndulu, Governor of the Bank of Tanzania, said the government should enter into...

Rwanda plans to offer new incentives to attract investors in export-oriented projects in coming months under a new export strategy. It is also developing a framework to guide land allocation and infrastructure prioritization for investment. The new export strategy, still under discussion, is part of a broader plan to diversify and narrow the country’s trade deficit, which has been climbing in recent years. Rwanda’s traditional export products including tea, coffee, pyrethrum as well as minerals continued to dominate the sector in 2013, representing 62.1 per cent of total exports against 59.4 per cent in 2012. This dependence on a few primary commodities remains one of the main challenges for a country seeking to reduce the high external trade deficit and build resilience to external shocks. For instance, while exports are projected to grow by seven per cent to $751 million from $ 703 million in 2013, the import bill is also expected rise by 16 per cent to $2147.4 million from the $1148.4 million in 2013. As a result, the country’s current account deficit is expected to deteriorate to $803.2 million in 2014 from $537.5 million in 2013. François Kanimba, the Minister of Trade and Industry, told The East African that the revised export strategy will focus on promoting new emerging sectors, facilitating cross-border trade and boosting local production. “We came to realise that the sectors that had been identified as the main generators of foreign exchange were not necessarily those that are currently generating foreign exchange. There are also...

Many traders are now demanding that the Electronic Cargo Tracking System (ECTS) be expanded to cover the entire East African region so that they can fully enjoy the benefits of the new system even outside Uganda. This follows the successful launch of the Electronic Cargo Tracking System in Uganda after it was also effectively piloted. Kenya’s version of the system faced a couple of hitches hence derailing its take off while countries like Rwanda are yet to start. In an interview, Al Hajj Jaffer Fajjallah, the Managing Director of Jaffer Freighters, a trade firm offering clearing and forwarding, warehouse and transport services, said that the system should start in Mombasa to cover the uncertainties in Kenya. He said the system should be synchronized and implemented in all the member countries in the region to enable traders transacting in these countries to enjoy the security provided by the new technology system. “We want it to work in the entire East African region. Those who have piloted it want the start of journey to be in Mombasa to be able to track the goods thought the transit route up to the final destination of the goods,” Fajjalah said. He said government should also invest in internet infrastructure to avert the breakdown of fibre optic cables so that the flow of information of the System is not sabotaged by internet breakdowns or slow speeds. Early this month, Uganda Revenue Authority (URA) launched an electronic system that helps owners of goods, clearing agents and...

Kigali: As a landlocked country, regional trade is an essential ingredient of Rwanda’s future economic success. Recognizing this, officials from the United States Agency for International Development (USAID) and TradeMark Africa ( TMA ) signed a $ 5.7 million Cooperative Agreement affirming their partnership under President Obama’s Trade Africa Initiative under the USAID Trade Infrastructure Program – which will work to improve the efficiency of regional trade in Rwanda. The signing occurred at the U.S. Embassy and included Mr. Peter Malnak, USAID/Rwanda Mission Director and Mr. Mark Priestley, Senior Director Country Programs of TradeMark Africa. Also present, was Mr. Pascal Ruganintwali, Deputy Commissioner General and Commissioner for Corporate Services of the Rwanda Revenue Authority – whose agency will benefit from investments that the new project will make in strengthening Rwanda’s customs procedures. The program is a three-year, $ 5.7 million activity that will seek to reduce the time it takes for goods to cross and clear Rwandan borders, reduce technical barriers to trade, and enhance Rwanda’s ability to export and import goods through increased regional integration. The partnership will also support East African Community (EAC) regional trade integration. Through Trade Africa, TradeMark Africa (TMA) will broaden its regional integration program at the Ports of Mombasa and Dar-es- Salaam and key border posts along the Northern and Central Corridors, and will work with EAC Member States to remove barriers to trade. “Time really is money, and with the reduction in delays, trucking companies can complete more trips, traders can depend on...