China and Kenya signed a co-financing deal on Sunday to build a railway linking Nairobi to Mombasa, a critical infrastructure project to boost regional trade and deepen integration in East Africa. Chinese Premier Li Keqiang said interconnection in East Africa and in Africa at large will fundamentally boost economic development of African countries. Several Chinese media outlets have erroneously reported that Li had talked about building high-speed railways in Africa. The fact is that, in none of the speeches the premier delivered in the four African countries did he say anything about building high-speed railways. He only said that China’s railways and airlines planes are of high quality, a research and development center for high-speed railway could be set up in Africa, and China had just started work on an electrified (not high-speed) railway connecting Addis Ababa in Ethiopia and Djibouti. China, no doubt, has the expertise in high-speed railways, but that doesn’t necessarily mean it should build high-speed railways in African countries. Instead, it should concentrate on helping African countries build and operate normal-speed railways. Railways are a prerequisite for a country’s or region’s economic development, because a train can carry about 2,000 tons of goods or thousands of passengers in a single trip. Railways are to an economy what blood vessels are to a human body. The Unites States, for example, is not only the world’s largest economy, but also has the longest railway network which runs into more than 220,000 kilometers. China’s railway network, on the other...

A workshop conducted by the International Monetary Fund (IMF) has warned East African Community (EAC) members against being reliant on donors and volatile commodity exports as the main sources of revenue. The warning by the participants, who included representatives of the finance ministries and central banks in the EAC member countries, was contained in a statement issued by the IMF following a recent workshop on fiscal or budget-related risks held in Entebbe, Uganda. The EAC members rely on commodities such as gold exports for Tanzania, while Uganda and Kenya are depend on tea, coffee and horticulture. However, the prices of the commodities have tended to fluctuate wildly with the latest figures showing that global gold, tea and coffee prices are under pressure. In the case of Kenya, donor contributions to national revenue have been unreliable with the middle of this fiscal year showing that less than half of the cash had been received. “Participants discussed the potential risks to government finances in the region from a reliance on revenue from volatile primary commodity exports and uncertain donor grants,” said the IMF in a statement from its communications department in Washington. The workshop was conducted by the Regional Technical Assistance Centre for East Africa and was attended by 20 officials from finance ministries and central banks from Burundi, Ethiopia, Kenya, Malawi, Tanzania and Uganda. The participants were also concerned about fiscal risks arising from rapid increases in infrastructure spending, including through investments by state-owned enterprises and the use of public-private partnerships....

When Mombasa Governor Hassan Joho visited the United States at the end of April, I learnt that my home town of Mombasa and the city of Long Beach in southern California were sister cities. In all fairness, there wasn’t any way to know about the sibling connection. There haven’t been any shared projects between the two cities; no business ventures; nothing to connect the west coast of the United States to the east coast of Africa except for a static website that needs updating. But the surface similarities between the two cities are impossible to ignore. Long Beach and Mombasa are both port cities that control a significant portion of the shipping business in their region. The two are ranked among the world’s top container ports: in 2013 Long Beach ranked at number 22 while Mombasa ranked at 117, according to a study by the international shipping magazine Container Management. The island city of Mombasa was established as a trading centre in the first century AD by the Indian Ocean trade winds, and it is strategically located about half way between the major Middle East ports and the port of Durban in South Africa. Long Beach, by comparison, is a much younger port and was only founded in 1911. In the last century it has expanded from 800 acres to over 7,600 acres, and has become the second busiest seaport in the United States. It serves as a major gateway for trade between North America and Asia and connects the...

Foreigners living in Kenya, Rwanda and Uganda will from next month get a six-month East African tourist visa under a preferential deal agreed on last week as the states sought to fully implement the issuance of a joint visa for the region. According to a report on last week’s Northern Corridor Integration Project Summit held in Nairobi, the visa will be issued by the country where the foreigner resides, subject to the validity of the work/residence permit taking into account the visa regimes. The deal will give non-citizen residents an edge over their travelling counterparts, who get a 90-day visa. Since its launch in Kampala last month, officials say, tremendous progress has been realised in the implementation of the joint visa, which is expected to sell the East African region as a single tourist destination. The ministers’ report says the countries have opened special visa fees accounts and agreed to transfer revenue from the joint visa to each partner state by July 15. The meeting directed Kenya to develop a sample application form for the visa and share it with partner states. Working like the Schengen visa for European Union countries, the East African visa is expected to allow tourist to enter any of the three countries and move freely within the other two. It is issued as a multiple-entry visa at $100 instead of $150 at the diplomatic offices of Kenya, Rwanda and Uganda, immigration offices of the respective countries or online. Annual audit “The national audit agencies of...

Uganda and Rwanda have saved up to $469 million in the cost of clearing goods since the East African Single Customs Territory (SCT) was rolled out at the port of Mombasa in January. An EAC ministers’ report from last week’s 5th Northern Corridor Integration Projects Meeting held in Nairobi shows that the clearance time for cargo destined for Kampala at the Mombasa port has dropped from 18 days to four, and from 21 days to six, for cargo destined for Kigali. This efficiency, ministers from Kenya, Uganda and Rwanda said, has cut the cost of clearing goods at the port substantially. The cost of clearing a container destined for Kampala was $3,375 before the launch of the SCT, but is now down to $1,731. The cost of clearing a container destined for Rwanda was $4,990 but has gone down to $3,387, the ministers’ report seen by The EastAfrican shows. Now cargo is weighed once, upon entering a partner state — a departure from the earlier arrangement where it would be subjected to multiple checks. Rwanda and Uganda have signed a legal instrument for the deployment of revenue officers at the ports of entry. According to the EAC ministers, partner states will now expand the system to include edible oil, steel products, wines and spirits, confectioneries, plastic products, milk and milk products. Expanded system Previously, only commodities like petroleum products, cement, spirits, and cigarettes were allowed under this system. The ministers said Uganda, has rolled out wet cargo (liquid cargo) while...

Business owners in Uganda are expected to save up to $1.2 million a year following the launch of an electronic system that helps owners of goods, clearing agents and transporters to monitor the location and status of their cargo while in transit. The new system launched by the Uganda Revenue Authority (URA) is expected to reduce transit time from seven days to one. Traders will be in control of their consignments and trucks since they will receive automatic alerts. The $5.2 million system, co-funded by the Government of Uganda in partnership with the World Bank and Trademark East Africa, will monitor imports, exports, re-exports and goods in transit to other countries in the region. According to Moses Sabiti, TradeMark project manager in Uganda, the system is expected to greatly improve the process of managing goods in transit. He said transit goods will be tagged with an electronic seal. “The system will track only revenue risky goods like fuel,” said Mr Sabiti. When the electronic system was piloted in October 2013, on average the transit period was seven days. “This was partly because the drivers were making unnecessary stops along the way. But now with electronic monitoring, this has changed. The system will track the movement of goods from the beginning to the end of the journey thereby enhancing security,” said Richard Kamajugo, URA Commissioner for Customs. Feedback Mr Kamajugo said the electronic tracking devices (e-Seals) constantly give real-time feedback to the Customs officers at the central monitoring centre. The system,...

Hopes of building a modern railway line in East Africa rose yesterday after Kenya and China signed a financial agreement committing the two countries to the Sh327 billion mega project. President Uhuru Kenyatta and Chinese Premier Li Keqiang led regional heads of states including presidents Yoweri Museveni (Uganda), Paul Kagame (Rwanda) and Salva Kiir (South Sudan) in witnessing the signing ceremony at State House, Nairobi. The contract was signed by National Treasury Cabinet Secretary Henry Rotich and the Chinese minister of Commerce, Mr Gao Hucheng. The standard gauge railway deal — which will lead to the construction of a 609-km railway line — will cost Sh327 billion. China will finance 85 per cent of the total cost through Export and Import (Exim) Bank of China while Kenya will pay the remaining 15 per cent through the railway levy charged on imported goods. President Kenyatta thanked China for its development commitments in Kenya and other African countries. He said the signing of the agreement marked the end of the “lunatic express” — the old railway line built by the British during the colonial era. MAJOR ENGAGEMENT “Today, we celebrate the signing of the agreements for that new line. After setbacks and heated disagreements, we found a honourable partner in the People’s Republic of China,” the President said. “No project of this magnitude could have been completed without the help of our friends. We will best appreciate the scale of help we have received from our partners in the People’s Republic of...

Kenya’s main port of Mombasa handled 9 percent more cargo in the first quarter of this year helped by an expansion programme that had improved efficiency, the port’s management said on Thursday. The Indian Ocean port of Mombasa, the biggest in east Africa and the region’s trade gateway, handles fuel and consumer goods imports as well as exports of tea and coffee for landlocked neighbours such as Uganda and South Sudan. Shipments at the port were subdued in the year-ago period due to concern over election violence which put off importers, but the March 4 polls were peaceful. “The election fever in the early part of last year affected our business volumes, especially in the containerized cargo, but we are determined to even out the difference before this year ends,” Danson Mungatana, the port chairman, told journalists. He said the port handled 5.56 million tonnes in cargo between January and March this year compared with 5.10 million tonnes in the same period in 2013. Last year container traffic through the port dropped to 894,000 twenty-foot equivalent units (TEUs) compared with 903,000 TEUs handled in 2012, as east African businesses sought alternative routes for their goods because of concerns about the election. Kenya is building a $300 million second container terminal at Mombasa to handle increased trade within the region, driven by a boom in the construction industry, vast infrastructure development and an emerging middle class. Mungatana said the project was 60 percent complete Source: Reuters

The Economic Partnership Agreement (EPAs) negotiations between the European Union (EU) and the East African Community (EAC) member States should not be based on the economic imbalance between the two parties but on the quality of trade that exists, Kenya’s flower industry has pleaded. The Kenya Flower Council CEO Jane Ngige on Thursday challenged the European Union not to look at Kenya and other East African countries from the lens of developing nations, but rather on the quality of products that they can export to the EU. “What we need to get off our table – and this is really my personal view – is this feeling that we are coming from a developing country; we have poor producers and so on. When it comes to trade, it’s really a question of… you have a product, I have the money, we want to do business,” she stressed. She said this was the time to allow fair trade by ensuring there is an equal level playing field. Economic Partnership Agreements are new legally binding bilateral contracts between the European Union and African, Caribbean and Pacific countries, giving some concessions to products from the countries into the EU market. If the EAC and EU do not sign them by October this year, Kenya stands to lose as its products to the EU market will attract taxes. This is on the basis that Kenya is a bigger economy than the rest of the East African countries. “Our exports are of good quality, especially...

President Uhuru Kenyatta has called on African leaders to work together in removing obstacles that hinder movement across the continent. The President said free movement of people, goods and services would increase intra-Africa trade and help the continent achieve its development targets. “Lack of political will and negative perception should not be allowed to undermine Africa’s integration and economic growth,” Uhuru said. He was speaking during a panel discussion at the World Economic Forum on Africa which opened on Wednesday in the Nigerian capital of Abuja as he concluded his visit that saw Kenya and Nigeria sign a number of agreements to boost trade and investment between the two countries. The President said leaders should not block African investors from investing in the continent by imposing stiff regulations including cumbersome visa requirements. “We need to facilitate our businesspeople to trade within the continent more freely,” Uhuru said. The President, who is the current chairman of the East African Community, discussed steps the region has taken to improve trade among member States. He observed that the advent of the single tourist visa has eased the travels of visitors and effectively turned all the participating countries of the region into a single tourist destination. He said the move gave impetus to the extension of the visa scheme to business people who can show ability and intent to trade. “There is no reason why we cannot begin by issuing proven African investors with visas allowing them to do their work with minimum of...