As Kenya marks the Africa Industrialisation Day today, the focus will be on its credentials to revamp its limping manufacturing sector to capitalise on new opportunities on a wider seamless market for the continent. President Uhuru Kenyatta’s plan to create in the upwards of 800,000 new decent jobs for Kenya’s growing skilled youth by enacting policies, which support modernisation existing and development of new factories is yet to gain traction. The manufacturing pillar under the Big Four socio-economic transformation plan is to create an additional 1,000 small and medium-sized (SMEs) factories in targeted sub-sectors such as agro-processing, leather, textiles and fish-processing. Statistics and recent surveys, however, paint a picture of struggling manufacturers, with their contribution to gross domestic product (GDP) — national wealth — shrinking and recording the lowest growth in jobs among key sectors of the economy. As a low middle-income country with sights on joining the league of highly-industrialised middle-income nations in just more than a decade, Kenya should be witnessing the movement of labour from low productivity sectors such as farming to the manufacturing sector. Growth in new job opportunities in the sector has largely been flat, with an addition of 4,200 new jobs in the first full year of Mr Kenyatta’s Big Four agenda, the Kenya National Bureau of Statistics (KNBS) data indicates. The President’s target is based on the sector overcoming its struggles to contribute 15 percent share to the national wealth (GDP) from the decades-low levels posted in recent years. The sector’s share of...

The AfCFTA Forum in Tanzania raised awareness about AfCFTA implementation, and demonstrated the value of doing so. Organised by the UN Economic Commission for Africa (ECA) and Trademark East Africa (TMA), the Tanzanian edition of the AfCFTA forum was held in Dar es Salaam on Tuesday 22 Oct 2019 and was attended by policymakers, private sector and the civil society representatives. John Ulanga, CEO of Trademark East Africa (TMA) in Tanzania,  emphasised the importance of that forum, underscoring the role of development partners like TMA and ECA in raising visibility and understanding of the AfCFTA. Andrew Mold, Acting Director of ECA in Eastern Africa, made a presentation highlighting the potential benefits of AfCFTA.  “The implementation of the AfCFTA could result in welfare gains amounting to USD 1.8 billion for Eastern Africa and creating 2 million new jobs”, said Mold. Participants at the meeting affirmed that increased awareness of AfCFTA in the country is very essential. They also noted that harmonising standards across the region would tackle the issues associated with non-tariff barriers, and this translates as more – and more fruitful – trade within and between East African countries. Infrastructure will also prove instrumental in reducing the cost of doing business in Tanzania, and therefore holds another key for unlocking the full potential of AfCFTA. Meanwhile, the role of informal trade was emphasised, with it emerging that participants were keen to understand how the AfCFTA could move people into formal work. This Forum held in Dar Es Salaam is one in a...

The East African Community (EAC) is not ready for the fourth industrial revolution even as the wave sweeps across the world. This is according to experts who spoke at an industrial conference at the EAC Secretariat in Arusha this week organised by the United Nations Industrial Development Organisation (Unido) and German Society for International Cooperation. The Global Manufacturing Industrial Summit (GMIS) roadshow sought to explore the implications of the revolution for the region’s manufacturing, industrialisation and investment prospects. For us to achieve inclusive and sustainable industrialisation, we need to invest in advanced disruptive technologies like 3-D printing, Internet of Things, advanced robotics and drones, which will make manufacturing smarter, efficient and greener,” said Stephen Kargbo, Unido Representative in Tanzania, Mauritius and EAC Secretariat. He added that the advancement of these manufacturing technologies will also help improve acquisition of agro-industries, water and sanitation quality for the rapidly developing towns and cities. Most of these industrialised countries account for over 90 per cent of digital production technologies, have invested hugely in research and development campaigns and we have to move in that direction,” added Kargbo, who said there is also need for solid industrial policy. EAC first came up with an industrialisation policy for 2012-2015 but it failed to be implemented and was revised to 2021-2032. The contribution of manufacturing to the gross domestic product in East Africa is estimated at 8.9 per cent, which is considerably below the average target of about 25 per cent that all the five partner states...

The meeting is held during the “Africa Industrialization Week”, organized by the African Union from the 18th to the 22nd November 2019, according to the press statement from AFZO. The attendees include over 220 delegates representing 43 countries attended this important event, including 60 African economic zones, 30 experts, as well as several representatives of governmental authorities, international institutions and public and private organizations. Several international speakers representing international and financial institutions such as UNCTAD, UNIDO, UNECA, AfDB etc. shared during this event their expertise on effective means for economic zones development in Africa. the statement noted that various topics related to challenges and trends of African economic zones were addressed including strategic directions and effective governance model, contribution of economic zones for FDI growth and job creation, importance of logistics competitiveness within economic zones, skills development and training. The opening ceremony of the Africa Free Zones Organization’ 4th Annual Meeting was cochaired by M. Albert Muchanga the Commissioner for Trade and Industry of the African Union Commission (AUC), Ms Dagmawit Moges the Minister of Transport of Ethiopia, M Mehdi Tazi Riffi the President of the Africa Free Zones Organization. Serving the development of Economic Zones in Africa AFZO was founded back in 2015 by Tanger Med along with other African economic zones. Africa Free Zones Organization brings together the leading African economic zones and institutions in charge of the development, management and promotion of economic zones in our continent. The Africa Free Zones Organization aims to ensure: – Representation...

Tea  and horticulture are among the top export earners in Kenya and the government places a lot of premium on these sectors, out of Sh.612.9 b Kenya earned from her total exports in 2018, the Country made Sh.123.7b from tea exports alone. The Principal Secretary (PS) State Department of Trade, Dr. Chris Kiptoo speaking on Sunday at James Finlay’s (JFK) in Kericho, said that from the earnings the tea industry alone contributed approximately 1.5 percent to the National Gross Domestic Product (GDP) in the year ending 2018. He  said that, the horticultural sector contributed approximately 1.8 percent to the GDP in the same year earning the country Sh. 153.7b, accounting to 25 percent of the total exports in the same year. The  PS  said that the country earned Sh. 113b from cut flowers alone accounting to 18 percent from the total exports in the Country. Dr.Kiptoo said that the tremendous achievement were realized due to the efforts by the tea and horticultural exporters including the James Finlay’s Kenya (JFK) who have continuously ensured that the tea and horticultural industry and cut flowers brands remains internationally competitive. The PS reiterated that the government is implementing various strategies and policy initiatives among them, the National Trade Policy, The Integrated National Export Development and Promotion Strategy (INEDPS) and the Agoa strategy, all aimed at increasing market access and diversifying exports from Kenya. “INEDPS has prioritized Tea and Horticultural sectors as one of the key drivers in achieving its target of an average annual...

East Africa’s private sector players are concerned by the slow pace of resolving a common external tariff (CET) regime which is expected to usher in a free trade zone. A free trade zone will increase intra East African Community (EAC) trade, as there will be no duty on goods and services imposed amongst them. The regime will also agree on a common CET, where imports from countries outside the bloc will be subjected to the same tariff across partner states. Though Nicholas Nesbitt, the chair of East African Business Council, did not directly refer to the frustrations, it is an inference taken out of his statement when he said the issue was creating a “dilemma.” Council agenda Nesbitt said finalising the review on CET was part of an item on the council’s agenda, to be presented to the EAC council of ministers for delivery of quick wins for the region. “There are ongoing discussions whether to adopt a three-band or four-band structure with the highest rate of 35 per cent CET. The challenge is if you are a manufacturing country, you will want a high CET while trading countries will want a low CET to import finished goods for your citizens. Therein, lies the dilemma,” said Nesbitt. The implementation of CET is behind schedule, as it was to take effect on July 1, this year. The bloc’s member states had agreed there be a CET of zero per cent on raw materials and capital goods, 10 per cent on intermediate...

Air India is set to resume direct flights between Mumbai and Nairobi on November 27 following a two-month delay. The direct flights were to begin on September 27 but were delayed to this month due to operational hitches. “The planning for flights usually takes time and that is why there were operational delays. But all is now set for the flights this month with air tickets currently being sold...The maiden flight is scheduled to depart Mumbai for Nairobi at 6.25 am (local time),” said Indian’s High Commission to Kenya in a statement. India’s national carrier is scheduled to fly four times a week between Nairobi and Mumbai and will cut travel time from between 10 and 11 hours to six hours. This will save travellers hours spent on flights that usually involve long layovers in Dubai, Middle East. The commission notes that the flights are expected to shore up trade between India and Kenya as well as other East African Community countries. Trade between India and Kenya is estimated at $2 billion annually. According to 2018 data from India’s department of commerce, Kenya exports to India grew from $7.2 million to $137 million in 2017. The data also indicates that India imports to Kenya went up from $1.974 billion in 2017 to $2.071 billion last year. Air India used to operate directly between India and Kenya but later abandoned its operations. Some of the key economic sectors that are expected to greatly benefit from the Mumbai-Nairobi direct flights include tourism,...

Kenya is losing about Sh100 billion yearly in freight charges for imported cargo, which is paid to foreign shipping lines docking at the Port of Mombasa. Last year, the port made a cargo record of 1.3 million containers leading to a freight payment of Sh78 billion. Each of the standard containers is paid a minimum freight rate of $500 (Sh50,000). Also every year, the port receives about 130,000 units of second-hand vehicles which attract freight charges of Sh10.4 billion, all of which is repatriated back to foreign countries where the shipping lines ferrying them are registered. The reason Kenyan is not getting a share of this huge amount of cash is simple; the country does not have a national shipping carrier that would enable it to benefit from the charges levied on imported cargo. Experts say such a local carrier will be to shipping what Kenya Airways (KQ) is to the aviation industry. To address this situation, cargo importers and other players are calling on the Kenyan government to introduce the Cabotage law to save them from paying billions to foreign firms. ‘Cabotage laws apply to merchant ships in most countries that have a coastline, to protect the domestic shipping industry from foreign competition, preserve domestically-owned shipping infrastructure for national security purposes, and ensure safety in congested territorial waters. The Kenya International Freight and Warehousing Association (Kifwa, Car Importers Association of Kenya (CIAK) and independent maritime and shipping sector players say Kenya lags behind in applying the laws that the...

Tanzania is beginning to mark strides as a major buyer of Kenyan goods making orders worth Sh15.91 billion in the first seven months to July, even before President Uhuru Kenyatta's visit. Central Bank' data show that this represents an 11.48 per cent increase compared to Sh14.27 billion value of goods imported in seven months to July 2018. In 2018, the neighbouring country bought goods worth Sh29.93 billion in items including plastics, iron and steel, machinery, animal and vegetable fats electrical equipment and vehicles among others. At the time, imports from Tanzania to Kenya were registered at Sh34.52 billion. Cereals, wastes of the food industry, paper and paper board, beverages, spirits and vinegar are among goods that Kenya imports from Tanzania. Kenya has been gearing to improve trade with the country whose relations has been tensed over the years due to a high number of tariff and non-tariff barriers. In 2018, Tanzania imposed a 25 per cent import duty on Kenyan confectionery, including juice, ice cream, chocolate, sweets and chewing gums, claiming Kenya had used zero-rated industrial sugar imports to produce them. The country still remains opposed to the issuance of work permits to Kenyan nationals looking to work in around its borders. The trading imbalance in favour of Tanzania is set to reduce if bilateral talks between the nations is anything to go by. The countries held bilateral meetings in Arusha, in April, to resolve the trade issues and barriers affecting the movement of goods across the borders including rules of origin for some products...

The African Development Bank (AfDB) has signed an unfunded $250-million (Shs920bn) Risk Participation Agreement (RPA) facility with ABSA – a pan-Africa financial institution with a solid presence in 12 African countries. The 3-year RPA facility was signed November 12, on the sidelines of the Africa Investment Form through its trade finance operations. Under this 3-year RPA facility, the Bank and ABSA will share default risk on a portfolio of eligible trade transactions originated by African Issuing Banks (IBs) and confirmed by ABSA. Leveraging the Bank’s AAA rating, ABSA will underwrite trade transactions issued by African issuing banks across key sectors like agriculture, energy, and light-manufacturing with a special focus on Small and Medium Sized Enterprises (SME’s)  in fragile and low-income African countries. The Bank’s commitment under the RPA is to assume up to 50% (and 75% in special cases) of every underlying transaction issued by the IBs, while ABSA will confirm such a transaction and bear not less than 50% of its underlying risk. Working with strategic partners like ABSA, the Bank’s  trade finance operations aim to facilitate inter and intra Africa trade by reducing the trade financing gap on the continent. Since 2013, the Bank’s RPA program has supported over 16 issuing banks with about US$650 million  limits in Southern Africa alone, with special focus on SMEs and local corporates in manufacturing, agribusiness, import/export and energy sectors. In the same period, the program supported over $4billion in trade volumes across Africa, with $938 million of that being intra-Africa trade....