Burundi has joined a group of nine African countries at a high risk of debt distress while Kenya’s risk of default has increased to moderate from low. This has seen the International Monetary Fund raise a red flag over the rate at which East African countries are accumulating debt. The region’s economies have fallen into a financial fix as they attempt to fund persistent budget deficits and implement mega infrastructure projects against a backdrop of declining revenue collection. As a result, the economies have resorted to massive borrowing, both from the domestic and international markets to quench their loan appetite, with fears that the increasing uptake of commercial loans could push most of them into debt distress. “An over-reliance on commercial public debt exposes sovereign balance sheets to greater rollover and exchange rate risks. Also, an increase in debt from domestic creditors could crowd out financing for private sector projects,” said the IMF. So far Kenya, Uganda and Tanzania are among the top 50 countries in the world that are highly indebted to China, according to US-based research firm Brookings Institution. According to Brookings, countries are now shifting away from official multilateral creditors who come with stringent conditions to non-concessional, (commercial) debt with relatively higher interest rates and lower maturities. But this trend is raising concerns around debt sustainability given the possibility of higher refinancing risks and foreign exchange risks. The IMF, in its regional economic outlook report for sub-Saharan Africa released last week, says that surging public debt-to-GDP ratios...

Kenya's Chinese-built port in the coastal county of Lamu is expected to be launched in December, the port agency said on Monday. Daniel Manduku, managing director of Kenya Ports Authority told Xinhua in Nairobi that the facility that was constructed by the China Communications Construction Company will receive its first ship from the Maersk Shipping line next month. "The Lamu port will mainly be a transshipping hub for cargo destined for ports such as Dar es Salaam, Zanzibar and Maputo," Manduku said. The construction of the first berth has been completed and two others are expected to be completed by the end of 2020. "The third berth will be modified to handle crude oil exports from Kenya's northwest region," Manduku added. Manduku noted that the first three berths will be funded by the government while another 29 berths should be developed under a public-private partnership model. The port agency said that the Lamu port will complement the existing port of Mombasa to help facilitate the movement of cargo in and out of Kenya and its neighboring states, enhancing Kenya's status as a regional transportation hub because of the ability to handle larger sea vessels. "The new port is also expected to handle cargo to and from Southern Ethiopia," Manduku revealed. Source: Xinhau

Kenya has slashed pipeline tariffs by 50 per cent as it seeks to win back oil importers from landlocked countries to its network, after it lost the regional fuel transport market to Tanzania’s port of Dar es Salaam. The tariffs scheduled to be gazetted by the Energy and Petroleum Regulatory Authority set the rate at $30.89 per 1,000 litres from the previous $60 for the same volume. The three year revision will see the rates fall further fall marginally to $30.65 in 2020 and to $29.07 in 2021. Currently, it costs $60 per 1,000 litres of fuel that passes through the Kenyan pipeline and a further $35 on trucks to and from destination countries, compared with an average of $80 to move oil via Tanzania’s Central Corridor road network to and from Dar es Salaam. The tariff revision is hot on the heels of an announcement by Tanzania last week that it was forming a task force operating a One Stop Centre at the Dar port to improve efficiency. Works, Communications and Transport Minister Isaack Kamwelwe said the team will bring together at least 20 stakeholder organisations from key institutions, both public and private, involved in cargo clearance at the port. These include the Tanzania Port Authority, the Tanzania Revenue Authority, Tanzania Food and Drugs Authority, Tanzania Bureau of Standards, Tanzania International Container Terminal Services, Tanzania Freight Forwarders Association, Tanzania Truck Owners Association and the Dar es Salaam Corridor Group. The announcement brings to the fore the fierce competition for...

Whatever is holding the second round of talks between Uganda and Rwanda has to be resolved quickly to allow the two sister counties fast-track the peace process. After months of bickering, which climaxed in Rwanda closing its border point at Gatuna on February 28, and advising Rwandans against coming to Uganda, President Museveni and his counterpart Paul Kagame met in Angola in August and signed a Memorandum of Understanding (MoU) on regional cooperation and security. The principals set up a joint ad hoc commission to help implement the MoU. The commission held their first bilateral meeting in Kigali, Rwanda, on September 16 and agreed to meet again in Kampala after 30 days. The 30 days elapsed on October 16, and the much-awaited meeting did not happen. The fear is that the silence on both sides and endless preparations for a follow-up meeting might be misconstrued to mean a deliberate attempt to throw the baby out with the bathwater yet Rwandans, as well as Ugandans, have for long been waiting to rejoice the return of normalcy. The restrictions at the border have messed up things. Uganda has not only been trading with Rwanda but also uses the country as a gateway to eastern DR Congo. The constraints at the border between Uganda and Rwanda have disrupted trade between the two sister nations and in some cases ruined lives. The traders at Gatuna border have expressed anger and frustration and questioned procrastinating. Small business owners lost source of livelihood in endless border...

76 port and maritime supply chain representatives from 12 countries convened last month to agree measures to address wildlife trafficking through Mombasa seaport in Kenya. The port of Mombasa is the largest seaport in Africa and is a key exit point for trafficking of African wildlife. One of the most publicized seizures at Mombasa port involved two containers declared as tea leaves that were intercepted with more than three tonnes of ivory, four rhino horns and teeth from leopards and cheetahs. Alongside elephant, rhino and big cat parts, other wildlife and wildlife products commonly smuggled through Kenya’s seaports include pangolins, timber and shark fins. Specific actions discussed included enhancement of inter-agency and international collaboration, cargo risk profiling, policy enforcement and prosecution capacity and intelligence exchange. The measures were agreed during a Port Stakeholders’ Workshop hosted by The Ministry of Tourism and Wildlife of the Republic of Kenya, in partnership with TRAFFIC, the United Nations Development Programme (UNDP), the United Nations Office on Drugs and Crime (UNODC) and the World Wide Fund for Nature-Kenya (WWF-Kenya). Participants identified key gaps and opportunities in the port management systems to prevent, detect and intercept illegal wildlife products and determined next steps. Kenya Wildlife Service also held a sniffer dog demonstration showcasing how the canine unit can enhance detection by alerting authorities to hidden wildlife products in shipping containers. “The illegal wildlife trade must be made unprofitable and extremely uncomfortable. We must join hands to help each other so that we stay a step ahead...

Cargo throughput at the Port of Mombasa has increased by 9 per cent in the last nine months of 2019, compared to a similar period last year, a new report shows Cargo throughput is the average quantity of cargo that can pass through a port on a daily basis from arrival at the port to loading onto a ship. The report by the Kenya Ports Authority (KPA) shows that the Port of Mombasa also increased trans-shipment trade, which grew 137 per cent on average in the period under review. According to the report, the volume of cargo is projected to further increase towards the end of the year as orders for the festive period start arriving. Increased efficiency On Saturday, KPA Managing Director Daniel Manduku attributed the growth in cargo volume to increased efficiency at the port. “This has led to our profits growing from Sh10.6 billion in the 2017-18 financial year to Sh17.5 billion in the 2018-19 financial year,” he said. Dr Manduku said the port handled a total 25.4 million tonnes of cargo from January to September this year, up from 23.4 million tonnes over a similar period in 2018. He added that Lamu Port Consortium (LPC) was negotiating a public-private partnership (PPP) with a South African firm, Transnet SOC, to run the port in Lamu. Kisumu port gets new equipment as reopening nears The first three berths of the new commercial port at Kilalani are expected to be commissioned by President Uhuru Kenyatta next month. “The negotiations...

As the world’s economic giant – the United States – continues to wage economic war against China, Mexico, Turkey and, more recently, India in establishing tariff barriers against their products, African countries have opted to spurn protectionism and embrace intraregional trade. A significant and historic step was taken on 30 May, as the African Continental Free Trade Area (AfCFTA) came into effect. What does this all mean, and is it cause for celebration? A market potential for goods and services of 1.2 billion people, an aggregate gross domestic product (GDP) of $2.5trn, the reduction of tariffs and the free movement of labour is not to be sniffed at. I know this, as I come from a country of 2 million people and a GDP of circa $17.5bn. Investors want access to a large consumer base and the benefits of scale cannot be underestimated for attracting foreign direct investment. Yes, the agreement is indeed a cause for cautious celebration. The speed with which it has been brought into effect from June 2015, when the negotiations first commenced to establish the continental free trade area, to May 2019, when 51 of 54 African countries signed up, is nothing short of a miracle. We need to applaud the tenacity of our leaders in getting here.  As a continent, intraregional trade is an economic imperative. Currently only 12% of trade is within Africa, while 75% of our exports to the rest of the world are still mainly minerals (crude oil and copper), according to United Nations...

The Kenya Revenue Authority has deployed 12 staff to handle customs clearance operations at the Lapsset corridor ahead of the port's commissioning on November 8. On Monday, KRA board chairperson Francis Muthaura and other officials toured the Sh2.5 trillion Lapsset project to assess the level of preparedness for the commencement of operations. President Uhuru Kenyatta is expected to commission the first berth at the port in a colourful event during which the first-ever cargo ship is expected to dock. Muthaura said all the personnel dispatched are well trained and have vast experience in handling customs clearance operations. The official met Kenya Ports Authority managing director Daniel Manduku and Lapsset Corridor Development Authority director general Sylvester Kasuku during the tour. “As required under the East African Customs Management Act, the KRA will help with offloading import and export cargo. That means KRA is well prepared to practice its full mandate once the Lamu port begins operations,” Muthaura said. The KRA team also held deliberations with county commissioner Irungu Macharia and Governor Fahim Twaha. During the visit, Muthaura and other top KRA staff also opened a new office block at Lamu Island to coordinate its operations across the county. The construction and rehabilitation of the building commenced early last year and took exactly 12 months to be completed at Sh18 million. The tax board chairman said the offices had come on time as the region continues to open up for more trade, industries and other investment opportunities with the new port in...

Kenya is among the five East African Community (EAC) countries set to benefit from a 3.3 million USD financial support from the Japanese government on trade facilitation and border control capacity. Burundi, Rwanda, Tanzania, Uganda and Kenya have been facing several obstacles to their supply chain security through threats of acts of terrorism and violent extremism, trade of small arms and light weapons and explosives, a challenge that has hampered economic development and integration in East Africa. In a statement, Japanese Ambassador to Kenya Amb. Ryoichi Horie said the Embassy of Japan in Kenya and the United Nations Office for Project Services (UNOPS) Kenya Multi country Project will on Friday sign the East Africa technical assistance on trade facilitation and border control capacity in project. He said the five countries requested Japan to provide them with technical assistance on trade facilitation and border control to enable the region promote economic growth and fight insecurities. “Trafficking of illegal drugs such as heroin is a major challenge across these countries’ borders,” said Horie. The envoy said the government of Japan has been supporting the One Stop Border Post projects since 2007 through the Japan International Cooperation Agency (JICA), and was confident that the project would counter international organized crimes, supply chain insecurity, the increasing global threats of terrorism at the EAC borders. Amb. Horie at the same time noted that to complement the successful implementation of water and border surveillance systems by JICA, UNOPS would procure and install border control and surveillance...

In Summary •EAC and Regional Development CS Adan Mohamed says discussions are ongoing but could take up to 12 months before materializing. •EABC chairman Nicholas Nesbitt has expressed optimism continued dialogue will open up trade in Kenya and East Africa which has improved with the One Stop Border Posts. Lack of political goodwill has slowed down the implementation of  the East African Community-Common External Tariff (CET). This even as tariff and Non-Tariff Barriers (NTBs) continue to hamper growth on cross-border trade, which according to the East African Business Council (EABC), remains at a low of 12 per cent. East African Community and Regional Development Cabinet Secretary  Adan Mohamed has said it could take Kenya and her EAC peers up to one year, before having a revised and mutual tariff in place “My guess is we probably have another twelve months or so before we can see a revised programme, because it has to go through the budgetary process and next budget is so many months away,” Mohamed told the Star. He said the discussion is ongoing and acknowledged that current CETs have been in place for a while and it is the right time to assess whether the tariffs are working or not. The tariff discussion which gained momentum at a regional forum in Entebbe,Uganda, in May this year, is yet to bear fruits as some countries have adopted a protectionist approach for their local industries. In February,  EAC Heads of State directed the council of ministers to review the relevant rules and...