The real gains from any socioeconomic initiative are as good as the benefits they convey to the targeted beneficiaries. The same applies to the East African Community (EAC). Thus the leadership of the regional bloc owes its collective citizenry the duty of making known why it is potentially beneficial to them. The idea behind regional blocs—or regionalism, as those more inclined to scholarly exploits like calling it—is premised on a number of imperatives. Foremost among them are relative geographic proximity and shared cultural, economic and political objectives. The confluence of shared interests is a key rationale of the geopolitical ‘camaraderie’ that anchors the justification of regional blocs. Beyond shared interests and resources, the member states owe their citizens a range of dividends extractable from trade opportunities possible in the exchange of goods and services in the region. So what should be prioritised to maximise the benefits of the EAC? Four quickly come to mind. The first two are improving the environment for cross-border trade to thrive and boosting key infrastructure, particularly transport and ICT. The others involve taking a common view on matters macroeconomic for the region and sharing resources to enhance security and the whole slew of cross-cutting social services. An enabling environment has already been created for the free exchange of goods and services in the EAC to flourish. However, a lot more needs to be done to increase the movement of people, goods and services within the region. The 300 million-strong combined population is an asset we...

In Summary President Ruto said Nairobi is a strong participant in the Tripartite Trade Agreement encompassing EAC, Comesa and SADC. This, he said, will offer the 28-countries bloc the advantage of 750 million people and an economy of $1.8 trillion. The EAC-Comesa-SADC tripartite agreement will be in place by the end of April 2023, President William Ruto has said. This means 28 African countries will trade as a bloc with the European Union. Pitching Kenya as the preferred investment hub for EU investors on Tuesday, President Ruto said Nairobi is a strong participant in the Tripartite Trade Agreement encompassing EAC, Comesa and SADC. “The tripartite agreement was signed in 2015 and unfortunately for the seven years or so, we have not concluded it to the satisfaction of the EU requirements,” the President said in Nairobi during the EU-Kenya Business Forum. To address this challenge, Ruto said he sent Trade CS Moses Kuria as his special envoy to 11 capitals to meet with the respective presidents. “He [Moses Kuria] has been to Egypt, Angola, Comoros [new AU chair], Uganda, Tanzania, Lesotho South Africa …, and now I can promise with confidence, by the end of April, we will have the tripartite agreement in place,” Ruto said. This, he said, will offer the 28-countries bloc the advantage of 750 million people and an economy of $1.8 trillion. “This is a great opportunity that as the EU looks at Kenya, you are also looking at the tripartite agreement and a huge population and economy...

East African Business Council (EABC) has raised new concerns that variations in tax policies are distorting prices and frustrating intra-EAC trade and investment. As a result, the EAC member states are being urged to eliminate discriminatory taxes and accelerate the harmonization of domestic taxes within the bloc if they are to attract improved cross-border and foreign direct investments. Unharmonized taxes, it emerged, was largely contributing to the bend of the intra-EAC trade and cross-border investment and frustrating the free movement of goods, services, service suppliers, and workers. Speaking during the Validation Webinar for the Study on Discriminative Taxes and Harmonization of Excise Duties in the East African Community (EAC) – the Council’s Chief John Bosco Kalisa, called on the EAC Partner States to adhere to Article 15:2 of Customs Union Protocol that states for the trade within the bloc to flourish. “No Partner State shall impose, directly or indirectly, on the products of other Partner States any internal taxation of any kind in excess of that imposed, directly or indirectly, on similar domestic products,” states the article’s excerpt. The continued intra-EAC trade decline reflects a gradual loss of competitiveness among the region’s manufacturers compared with Asian exporters, as well as increasing protectionism fueled by political tensions among some member countries that have engulfed the region over the past couple of years – limiting attractiveness. Other upshots include an unlevelled playing field for business and difficulties in marketing the EAC bloc as a single investment destination, according to Kalisa. The harmonization...

The Board of the East African Business Council during its 84th meeting outlined priorities set to boost intra-EAC trade and investments in the region. During the 84th EABC Board Meeting, the Chairperson of EABC . Angelina Ngalula lauded the EABC Secretariat for championing the adoption of 35% as the 4th band of East African Community (EAC) Common External Tariff by EAC Partner States which will promote industrialization. Ngalula stated that the Board is steadfast in steering high-level policy advocacy through dialogue with the EAC Heads of State to unlock Nontariff Barriers, restrictions to free movement of services, double taxation, open skies, telecommunications and infrastructure development in order to boost intra-EAC trade and economic resilience amid the global crisis. Half of the countries in the Eastern Africa sub-region are net food importers thus extremely vulnerable to higher global food and energy prices, rising inflation and food insecurity in the EAC bloc. According to FAO (2022), Global Food Price index of cereals, meat, and dairy rose by 26%. The Board urged the EAC Council of Ministers to fast track finalization of the Regional Local Content Policy and Ratification of Article 24(2) of the Protocol on the Establishment of the Customs Union to operationalize the Trade Remedies Committee to handle disputes on trade-related matters as outline in the resolutions of the High Level Summit on Common Market Protocol. The EABC Board Commended the EAC Secretary General for leading the EAC trade mission to Democratic Republic of the Congo and directed the EABC Secretariat...

In mid-June, as Kenya battled maize scarcity and related production costs, the Tanzanian government asked its grain traders to get an export permit before shipping maize out. Though an unpopular decision, as it cut supplies to Kenyan grain millers and other East African countries who had ordered stocks from Tanzania, the policy helped Tanzania to keep inflation in check, exposing the rest of the region to expensive food. In Kenya, the policy partly helped to drive the price of a two-kilogramme packet of maize flour to an unprecedented high of Sh200. Even before the dust settled, towards the end of June, Tanzania increased the export permit costs by 93 percent. In this directive, Dar es Salaam authorities increased the cost of acquiring export permits from the previous Sh27,000 per truck to Sh52,000. This meant that Tanzanian traders had to increase prices of their commodities, a scenario that discouraged export trade. These, among other policy interventions, have seen Tanzania shield itself from the wave of sharp rises in inflation sweeping across the region. Official data reveals that Tanzania had the lowest inflation rate in the region by the end of August at 4.6 percent. It was followed by South Sudan which recorded a 6.4 percent rate while the Democratic Republic of the Congo (DRC), the newest member of the East African Community (EAC) came third at eight percent. Kenya posted a 62-month high of 8.5 percent inflation in August, which rose to 9.2 percent in September, as the region races to...

External investors looking for merger and acquisition deals in East Africa are facing challenges when conducting due diligence and valuing potential targets due to low-quality financial data, potentially costing the region valuable foreign direct investment inflows. Advisory firm Deloitte says in a macroeconomic outlook publication that underdeveloped target companies — in terms of revenue and profitability—are also forcing investors into a narrow band of sectors such as energy, fast-moving consumer goods and financial services, and leaving other small businesses facing a capital drought. Private equity, venture capital funds and development finance institutions (DFIs) have over the years expressed concerns about asset quality and valuation of local businesses, pointing out the possibility of overpaying for low-quality investments. When conducting due diligence on potential acquisition targets or merger partners, companies analyse historical performance and also evaluate the operating environment to project future performance. Failure to do proper analysis can, therefore, leave a buyer staring at considerable losses should the financial projections of the acquired asset fail to match actual performance. “Key challenges experienced in due diligence comprise tight deadlines, inadequacy in the skills in the finance function and low quality of financial information. Inadequate due diligence presents the risk of mis-assessment of the going concern of the target, resulting in an uninformed merger or acquisition,” said Deloitte in its East Africa Macroeconomic Outlook report. “Most investors looking to deploy capital in the East African region have (also) expressed concerns about the quality of assets, the reasonableness of their valuation asking prices and...

Dan Howdle, a consumer telecoms analyst at www.cable.co.uk, writing for www.visual.capitalist noted that Tanzania leads in comparable quality and lower internet costs. The reports drawn up last month were quoted by networks like www.allafrica.com, underlining the reliability of the comparative data for internet pricing and quality. The analyst said Tanzania has the cheapest internet price in East Africa, while Somalia is no longer offering the most affordable mobile internet in Africa, moving to third. Sudan and Algeria take the first and second places respectively in the cheapest data placing for the continent, he said. “In Sudan, the cost of mobile internet is $0.27, the cheapest in Africa and fifth in the world. Algeria is second at $0.51 and Somalia is third at $0.60. Tanzania has the cheapest data in East Africa at $0.75 for every gigabyte of data,” the study specified. The Cable.UK data stretching from December 8, 2020 to February 25, 2021 shows that Rwanda follows Tanzania at $1.25 per gigabyte, Uganda ($1.56) and Burundi ($2.10) while Kenya, which was second in East Africa last year charging $1.04, had reviewed its charges to $2.25 per gigabyte, it elaborated. Many countries with cheap data have excellent mobile and fixed broadband infrastructure, enabling service providers to offer large amounts of data, and bring down price per gigabyte, it further noted. Local observers said that the report comes in a situation where some EAC media outlets see Tanzania and the Democratic Republic of Congo as having low quality and high prices for data services, which is...

The Secretary General of the East African Community (EAC) Dr Peter Mathuki on Friday met the incoming CEO of TradeMark Africa (TMA) David Beer at the EAC Headquarters in Arusha, Tanzania. Accompanying Beer during the courtesy call on the Secretary-General was the ongoing TMA CEO Frank Matsaert. In his remarks, Dr Mathuki observed that TMA had done a commendable job in supporting the integration process in East Africa, particularly in infrastructure development, improving customs efficiency and capacity building in diverse sectors. Dr Mathuki said that TMA had mobilised significant resources over the years to support various EAC programmes and projects. He singled out TMA’s support in the construction of One-Stop Border Posts (OSBPs) noting that OSBPs had eased cross-border trade and free movement of persons by reducing the amount of time spent by merchants and travellers at the borders. The Secretary-General informed Beer of potential areas that may require support in future including fast-tracking the integration of the Democratic Republic of the Congo (DRC), the newest Partner State, into the Community. Dr Mathuki further informed the TMA CEO of the urgent need to build the capacity of DRC officials to ensure that they participate fully and effectively in EAC programmes and activities. Also high on the EAC agenda is support in terms of translation and interpretation services for EAC meetings and documentation given that French and Kiswahili are also now official languages of the Community in addition to English. On his part, Beer said that his focus would be to build on and deepen the...

Aid-for-trade organisation TradeMark Africa (TMA) is in talks with development finance institutions (DFIs) to help east Africa realise its free-trade potential, new CEO David Beer tells The Africa Report. The group is in “advanced” discussions with DFIs to raise finance for projects such as one-stop border posts, trade logistics parks and trade finance, Beer says. The aim, he says, is to attract finance that will improve trade infrastructure to the point where users will be prepared to pay for it. Beer, based in Nairobi, took over from founding CEO Frank Matsaert on 1 September. He’s now developing a new 10-year strategy for TMA which will include a focus on digitisation. TMA has been a “victim of its own success” and now needs a “strategy 2.0”, he says. Read original article

Business Operators have been encouraged to participate in the Authorized Economic Operator (AEO), a World Customs Organization (WCO) programme that is being implemented in the East African Community (EAC). Under the programme, the business community from different EAC Partner States can apply for the "AEO Status" which allows them to be handled as low risk companies that can be trusted by Customs. This implies that Customs can deal with the consignments of such companies/business or individuals with less controls compared to non-AEO program members. That way, the AEO programme is an instrument for growing compliance, according to officials. AEO status bearers, irrespective of the EAC State they come from, go through the same set of criteria. The programme aims to enhance efficiency in the face of increasing volumes of trade and the increasing vulnerability of the international trade supply chain to security threats as well as the use of the international trade supply chain as a conduit for high security risk materials. It tackles challenges by shifting the perspective, so that instead of focusing on the goods themselves, Customs focus on the traders. Speaking to The New Times, Yvonne Gatera, the Assistant Commissioner for Customs Operations Support at Rwanda Revenue Authority (RRA) described the AEO as "a program that facilitates legitimate trade in the EAC." She highlighted its benefits for the operators during the clearing process. For instance, she noted that it allows importers, exporters and manufacturers to expedite the processing of entries and declarations, enjoy automatic passing of declaration, and...