East African Community The East African Community Secretariat has today signed a cooperation programme worth 2.3 million Euros with the European Union (EU) to improve Maritime Security and create a favourable environment for the economic development in the region. The signing of the agreement was preceded by a roundtable discussion, also held at the EAC headquarters, on the theme: “the Business Environment in East Africa’’ organized in commemoration of the EU Week. The financing agreement was signed by the Deputy Secretary General in charge of Finance and Administration of the East African Community, Mr Jean Claude Nsengiyumva and Filiberto Ceriani Sebregondi, Ambassador of the European Union to United Republic of Tanzania and the East African Community. The Maritime Security Programme (MASE) is part of a 37.5 Million euros package to four regional organisations of Eastern and Southern Africa (EAC, COMESA, IGAD and IOC). The financial support will, among others, strengthen the capacities of the four blocs in order to implement the Regional Strategy and Action Plan against Piracy and for Maritime Security adopted in 2010. Within this framework, the EAC will lead the efforts to strengthen legal, legislative and infrastructural capability for arrest, transfer, detention and prosecution of pirates, both at national and regional levels. In particular, support will be provided to investigative capacities as well as prisons/correctional services reform and capacity building offered to prosecutors and court staff. A key deliverable will include support to the operationalization of the EAC Regional Forensic Referral Centre. Other activities run by other...

The Council of Ministers under the East African Community (EAC) have proposed an imposition of a levy on air tickets purchased in the five member countries as part of a raft of measures tailored to raising revenue necessary to scale down the community’s donor dependency for its budget. In the current financial year, the secretariat of the budding regional bloc, according to Minister of East African Affairs, Shem Bageine, is running on a budget of $135m (about sh338b) with 68% being donor funded. Bageine on Tuesday told journalists at the Media Centre that “EAC has been deliberating on alternative mechanisms of financing to ensure timely remittance of funds to the Secretariat by the Partner States and to reduce donor dependency.” Highlighting the key action points from last week’s 12th Extra Ordinary Summit in Arusha, Bageine revealed that the heads of states directed the Council of Ministers to “explore all possible avenues” on sustainable funding of the community and submit a report in November. Another possible source of revenue under consideration is levying a percentage on the value of imports entering the region from outside the community. However, this modality of funding has been received with apprehension, according to the Director East African Community Affairs, Lawrence Mujuni, with experts warning that such a mechanism would ultimately confer more powers to countries contributing more revenue. “The problem with imposing a flat import levy is that Kenya will contribute the largest chunk, followed by Tanzania, Uganda, Rwanda and Burundi in that order. There...

As the trade delegation from Kenya accompanied the President to Nigeria this week, manufacturers are upbeat about the efforts by government to open new markets in the African region. Oil rich Nigeria is now the largest economy in Africa with a gross domestic product (GDP) of about $490 billion and a population of over 168 million. A huge number of international organisations and business people have been cautious of doing business in Nigeria for years. This may seem eccentric given that Nigeria is one of the most populous countries in Africa as well as one of the most oil-rich places in the world. Combined with the fact that the country is abundant in many other natural resources you might think that international business would be fighting for a stake in Nigeria. The GDP value of Nigeria represents 0.42 per cent of the world economy. Oil and natural gas are the most important export products for Nigerian trade. The country exports approximately 2.327 million barrels per day, according to 2007 figures. In terms of total oil exports, Nigeria ranks 8th in the world. As of 2009, Nigeria had approximately 36.2 billion barrel oil reserves. Prior to oil production, which surged after the 1970s, agricultural production was the largest export sector for Nigeria. After the country became a largely oil-intensive economy, the agriculture sector took a back seat. Investment Trade between Kenya and Nigeria has been in Kenya’s favour, with an average of Sh 1.2 billion in exports to Nigeria compared to...

The East African Trade Union Confederation (EATUC) and the East African Employers Organization (EAEO) are pushing for a uniform process in acquiring work permits in the Community. Meeting in Arusha last week, the trade unionists met during their Second Regional Forum Meeting ahead of the EAC Summit. Representatives of employees and employers association said a lack of harmonized procedures in the EAC member states is making it difficult for free movement of people, labour and capital . This provisions is one of the central components provided for in the Common Market Protocol which was signed by all Partner States in 2010. The meeting also reviewed the challenges that have continued to constrain the free movement of labour across the EAC with the exception of Rwanda. Rwanda has been quick to implement this provision by making it relatively easy to acquire a work permit and has been encouraging other EAC members to agree on mutual arrangements. “It is still very difficult for people to move from one country and work in another due to constraints related to work permits and the cumbersome processes that people undergo to acquire the documents,” Ms Caroline Khamati-Mugalla, the EATUC Executive Secretary, said. “Member states need to agree on the harmonization of working permits within the East African countries, because for example Tanzania charge over $ 2000 for the work permit with the application process taking unnecessarily long, while, Uganda and Kenya charge from $ 1000 to nearly $1900 and up to a month in securing...

President Uhuru Kenyatta has urged the private sector to exploit investment opportunities in the infrastructure sector to bridge the deficit in the continent. He said resources from the private sector could supplement Governments’ efforts and accelerate infrastructure projects , adding that the rewards would not merely be commercial but also radically transform ordinary African lives. “The infrastructure gap also requires dedicated financing mechanisms if it is to be bridged,” President Kenyatta said. The President spoke in Abuja, Nigeria, at the Africa Investor CEO Infrastructure Investment Summit – a premier business development forum for infrastructure investors, fund managers, project developers, project sponsors and Public Private Partnership policy makers. President Kenyatta also called on African countries to embrace a regional approach in infrastructure development. He said the said the approach would help the continent by cutting the costs of infrastructure projects through economies of scale. “It is therefore vital to promote regional and cross-border infrastructure as it increases trade, improves security, saves money, strengthens natural resource management, addresses the needs of landlocked countries, and builds on national and regional comparative advantage,” President Kenyatta said. In East African, President Kenyatta said deliberate priority has been given to the development of key regional transport corridors that in turn support trade and investment. He said some of the infrastructure projects in the region are poised to benefit from the Africa 50 Fund, including the rehabilitation and expansion of the Northern Corridor connecting the port of Mombasa with Kampala, Kigali, Bujumbura and Eastern Democratic Republic of...

Trade within East Africa is still facing the burden of Non-Tariff Barriers (NTBs) despite promises from EAC member countries to ensure easy flow of goods across the borders. Non Tariff Barriers have had a huge impact on Intra-EAC trade which has remained low at $4.5 billion accounting for only 12% to 13% of trade in East Africa with member states preferring to trade with COMESA, SADC or other neighbouring countries outside the Community. Kassim Omar, National Chairman Uganda Clearing Industry and Forwarding Association (UCIFA) and also Vice Chair of the National Monitoring Committee on NTBs was giving an update at a media workshop last week. “You can’t say that NTBs can be eliminated 100%. Some NTBs are anchored in the laws, but implemented wrongly. Anything that acts as obstacle to doing business is interpreted as an NTB, NTBs have to be defined in the right manner,” Omar said. However there have been some successes, including the removal of road blocks on highways, improved infrastructure, open border posts, and incorporation of ICT and participation of private sector in EAC negotiations. To register further success in removal of NTBs, Omar, suggests more harmonization of regulations and policies in the EAC. He adds that the region fast tracks the implementation of the Common Market protocol and the Customs Union Protocol under the single custom territory. Raymond Agaba, the Commissioner for Internal Trade at the trade ministry said NTBs restrict movement of goods and services and stop traders from taking advantage of the common...

Over the past few years, regional governments have stepped up efforts to improve the business environment and promote cross-border trade. This has involved building of new infrastructure and enacting new business supportive policies. These initiatives were largely responding to traders’ outcry over numerous barriers, like poor roads, delays at border posts and multiplicity of tax declaration at various points across East African Community (EAC) bloc, which hurt trade. Rwanda, for instance, has embarked on setting up modern one stop border posts (OSBPs) to ease clearing of cargo and individuals at borders. Also, unlike the previous setting that characterised border posts, the new system will see all agencies from EAC countries operating under one roof. Already, some border posts like Nemba at the Rwanda–Burundi border in the Eastern Province are operational, which has excited traders and made crossing easy for other travellers as clearing of goods is done under one roof. Ruhwa border post in Rusizi District at Rwanda-Burundi border is also operational, and offering the same services. “It is now easy to clear goods at the border since all the border agencies like immigration, revenue authorities and standards bodies work from the same building,” Claude Mutsinzi, a business man who exports foodstuffs to Burundi said in an interview with Business Times. Mutsinzi said previously one would spend many hours to have their merchandise cleared by customs officials, which he said delayed deliveries and ate into their earnings. Under OSBP, services are harmonised with incoming and outgoing traffic jointly cleared by...

Unemployment in Rwandans between 16 and 34 years will be addressed through the new National Employment Programme (NEP). Rwf. 12 billion (about $17 million) will be invested in implementing NEP. The priority is young people and women NEP is scheduled to take off during the next fiscal year. “NEP will help the country reach set targets of creating 200,000 off-farm jobs as per the Economic Development and Poverty Reduction Strategy 2 (EDPRS2) targets,” Anna Mugabo, the Director General of Labour and Employment at the Ministry of Public Service and Labour said during a two day forum in Kigali. Mugabo said there was still a very low entrepreneurship culture in the country but NEP working together with the Business Development Fund and the Kigali Employment Service Centre, jobs will be created especially for the youths and women. The forum involved participants from both the public and private sector. Opening the event, the Minister of Public Services and Labour, Anastase Murekezi said the theme of the year ‘Work for self reliance/Kora wigire’ was good timing for the country. “In Rwanda, like any other country in Africa, the challenges related to unemployment and underemployment hinder the achievement of full economic development,” he said. He said according to the 2012 population and housing census, the total unemployment rate stood at 3.4%, with urban unemployment of 7.7%. “The main challenge here is that 67% of all unemployed people are youths between 16 and 34 years, and therefore government is developing different strategies to curb this...

A new report commissioned by the African Development Bank (AfDB) has dug up some pay dirt on the constraints hampering exploitation of sub-Saharan Africa agriculture to its full potential. Published last week, the report titled ‘Inclusive Growth: An Imperative for African Agriculture’, states that Africa has the potential to attract $880 billion dollars investment in agriculture by 2030. The authors, Benedict Kanu, Adeleke Olwole Salami and Kazuhiro Namasawa say investment opportunities in agriculture abound in Africa, and the continent accounts for about 60% of the uncultivated arable land in the world. AfDB President Donald Kaberuka said in his remarks, “It would be beneficial that investors target agriculture in Africa like they have done already for mining, housing and telecommunication.” It is also estimated that Africa has the potential to increase the value of its annual agricultural output from $280 billion in 2010 to about $500 billion by 2020 and to $880 billion by 2030. However, the trio say African countries are still facing challenges that are inimical to agricultural productivity and inclusive growth. The publication is part of the Bank’s efforts to assess and document recent lessons and experiences emerging from its long years of assistance to agriculture and agro-industry. It is important to emphasize that some of these challenges are peculiar and unique to each African country. However, most are similar in nature and can be addressed with common solutions across countries. It is also worth noting that the majority of these challenges are well known, but they remain...

United States Secretary of State, John Kerry has praised the rapid economic development underway in Ethiopia. He was in Addis Ababa last week to have talks with Prime Minister Haile Mariam Desalegn on several bilateral and regional issues, including the conflict in South Sudan. “I think it’s fair to say that Ethiopia, in terms of its economy and in other ways, is really on the move, and it is a place that is generating enormous energy. All you have to do is drive through Addis, as I have several times in the last hours, and you see the economic activity, you can see the numbers of cranes and construction that is taking place, and it provides a snapshot of the country’s rapid development. It is no wonder that Ethiopia is one of the eight African economies that is one of the 10 fastest-growing economies in the world,” Kerry said during a news conference. He said the US remains committed to supporting Ethiopia’s growing prosperity. “We do that because strong commercial ties and this rate of development are critical to having shared prosperity, critical to providing opportunity to the broad population, and they also it helps to provide stability and helps to provide the capacity for Ethiopia to be able to lead in some of the other initiatives that are so critical to stability in the region,” he said. Source: East African Business Week