THIRTY ninth Southern African Development Community (SADC) Summit ended yesterday, with the signing of three development cooperation programmes with the European Union (EU). The 47 million Euros deals for the period of five years are under the 11th European Development Fund (EDF). The programmes, which will be implemented by the SADC Secretariat are Support to Improving the Investment and Business Environment (SIBE), Trade Facilitation Programme (TFP) and Support to Industrialisation and Productive Sectors (SIPS). SADC Executive Secretary Dr Stergomena Tax signed the agreements on behalf of the community while EU was represented by its ambassador to Botswana and SADC Jan Sadek. According to Dr Tax, SIBE programme aims at achieving sustainable and inclusive growth and support job creation through transformation of the region into investment zone, promoting intraregional investments and Foreign Direct Investments (FDIs), with the focus on small and medium enterprises (SMEs). Trade Facilitation Progamme (TFP) will contribute to enhancing inclusive economic development in the SADC region through deepening regional economic integration. She said the SIPS programme aims at contributing to SADC industrialisation agenda, improving performance and growth of selected regional value chains and related services within the agroprocessing and pharmaceutical sectors. “The signing of the three programmes reflects an enduring partnership between SADC and EU towards enhancing SADC regional integration and social economic development, particularly at the time when SADC has committed to place industrialisation at the centre of regional integration,” Dr Tax said. According to Dr Tax, the programmes are interconnected and interdependent and collectively contribute to...

Intra-African trade remained low at 14.4 per cent in 2018, with the continental countries trading more with the Asia, according to a revew by the African Development Bank (AfDB) The Annual Development Effectiveness Review 2019, shows the activity was low against a 2015 baseline of 14.6 per cent and a target for 2018 at 17 per cent. The trade is expected to reach 25 per cent in 2025. AfDB said non-tariff barriers and a lack of political goodwill to address the challenges impede progress. It also cites poor infrastructure in roads and energy transmission lines constructed or rehabilitated to enhance cross-border trade. “Intra-Africa trade could grow by up to 15 per cent if the bilateral tariffs that are applied today in Africa are eliminated and the rules of origin kept simple and transparent,” AfDB said. The bank points to barriers that could restrain the African regional economic integration that was given a boost in March 2018 with the established African Continental Free Trade Area (AfCFTA). The AfCFTA is projected to increase intra-African trade by 52 per cent by 2022. Kenya ratified the deal. AfCFTA became operational in July after meeting the ratification threshold from other 22 countries. “By committing countries to remove tariffs on 90 per cent of goods, liberalising tariffs on services and addressing other non-tariff barriers, AfCFTA is expected to significantly increase the value of intra-Africa trade and investment,” notes the report. According to the bank, barriers such as cost of trading across borders remains high, more than...

The U.S.-China trade war and uncertainty over Brexit pose risks to Africa’s economic prospects that are “increasing by the day,” the head of the African Development Bank (AfDB) told Reuters. The trade dispute between the world’s two largest economies has roiled global markets and unnerved investors as it stretches into its second year with no end in sight. Britain, meanwhile, appears to be on course to leave the European Union on Oct. 31 without a transition deal, which economists fear could severely disrupt trade flows. Akinwumi Adesina, president of the AfDB, said the bank could review its economic growth projection for Africa - of 4% in 2019 and 4.1% in 2020 - if global external shocks accelerate. “We normally revise this depending on global external shocks that could slowdown global growth and these issues are increasing by the day,” Adesina told Reuters on the sidelines of the Southern African Development Community meeting in Tanzania’s commercial capital Dar es Salaam. “You have Brexit, you also have the recent challenges between Pakistan and India that have flared off there, plus you have the trade war between the United States and China. All these things can combine to slow global growth, with implications for African countries.” The bank chief said African nations need to boost trade with each other and add value to agricultural produce to cushion the impact of external shocks. “I think the trade war has significantly impacted economic growth prospects in China and therefore import demand from China has fallen...

There’s a wrong presupposition that something being pursued by many people is less likely to be successful compared to something being pursued a few people. At times, this may be true, or not. There’re no convincing factors to determine that the likely outcome would depend on a big or small number of members. Naturally, success depends on a number of factors. Today, there’s a seemingly perennial problem of financial constraints at EAC resulting from non-compliance with regular contributions to the EAC budget by the Partner States. This issue is potentially paralyzing the activities of EAC. It has been raised over and over again and is now causing a daunting prospect about the future of the EAC. If Partner States fail to commit to their obligations regarding regular contributions to the EAC budget, its future hangs in a balance. The East African Community (EAC) is a Regional Economic Community (REC) of six Partner States; inter alia, Kenya, Rwanda, Uganda, South Sudan, Burundi and the United Republic of Tanzania, with its headquarters in Arusha, Tanzania. Under Article 132, paragraph 4, of the EAC Treaty provides that “the budget of the Community shall be funded by equal contributions by the Partner States…” Reneging on this obligation is increasingly paralyzing the implementation of EAC programmes and activities. Resources of the EAC principally come from regular contributions of the Partner States and have to be given equitably, regardless of a Partner State’s GDP or its economic outlook. These financial resources are utilised to run activities...

Non-Tariff Barriers (NTBs) have a huge bearing on the cost of doing business not only in Uganda but also the entire East African (EAC) region. NTBs are restrictions that result from prohibitions, conditions or specific market requirements that make importation or exportation of products difficult and/or costly. The EAC Elimination of NTB Act, 2017, defines NTB as laws, regulations, administrative and technical requirements other than tariffs imposed by a partner state, whose effect is to impede trade. Uganda loses about $827m (about Shs3.1 trillion) annually in logistics inefficiencies in import and export of goods. Yet logistics costs account for between 18 and 20 per cent of the sale price of goods sold in Uganda, according to National Logistics Platform. Currently, logistics bottlenecks and inefficiencies are present at multiple stages in the supply chain, including loading, delivery and warehousing, packaging and waste management. Traffic congestion along key transport corridors, roadblocks and checkpoints only push up time and costs of logistics, which are passed onto the shippers, but the consumers ultimately pay the price. Other challenges include absence of synergies within ministries, departments and agencies of government, insufficient information on trade and services, undefined taxes, challenges around Pre-Export Verification of Conformity and absence of Small and Medium Enterprises database, plus the high cost of finance. The 2018 port transit report places Uganda as the biggest user of the Mombasa port with about 82 per cent of her cargo passing through it. But Ugandan traders also lose their cargo more often whenever they...

The Port of Lamu will start operations in October following completion of the first berth early this month. The Kenya Ports Authority (KPA) yesterday said it will be offering heavy discounts for importers using the new port in a bid to attract vessels to Lamu. The commissioning on October 20 will coincide with Mashujaa Day. The Lapsset Corridor Development Authority (LCDA) on August 5 said the first berth was complete, setting the stage for its launch. Two other berths will be completed by end of next year, with the target being to have 32 operational berths over the next five years. KPA said it would allow importers to store imports for up to one month for free after it starts operations at the new port. “In order to promote traffic into the new Port of Lamu, KPA wishes to announce a promotional tariff for vessels and cargo as follows – 30 days storage free period for transshipment and transit cargo, 14 days storage free period for domestic cargo,” said a statement yesterday. Multipurpose berth KPA said it would also discount other services including a 40 per cent drop on discharging cargo from ships and cargo handling services at the shore. “The first berth will be used as a multipurpose berth and will be capable of handling any kind of vessel especially the self-sustaining vessels. KPA has put in place plans to install three ship-to-shore gantries by the time the remaining two berths are ready for operations in October,” it said....

African governments have been urged to increase investments in the digital infrastructure to enhance trade. African Union High Representative for Infrastructure Development Raila Odinga said technology has become an indispensable tool in today’s world.With rapid population growth globally, he said, there is a need to expand investments in the digital technology space to fast-track transportation of goods, passengers and services.“We need to increase data networks and connections linking the African continent and the rest of the world as we leverage technology to boost services and production,” said Raila. The AU envoy and opposition leader was briefing the media at the Kisumu International Airport after hosting Zimbabwean billionaire Strive Masiyiwa whom he lauded for his efforts at improving ICT infrastructure in Africa.Masiyiwa’s flagship firm Econet Wireless is best known for its high-speed internet services available in a number of African cities. Raila assured investors of his support in fostering IT infrastructure growth across the country and the greater Horn of Africa.Masiyiwa, who is also the founder of Liquid Telecom promised to expand IT networks, cross-data as well as broadband connectivity across Kenya and the continent at large Source: Standard Media

Kenya has been ranked the second leading innovation hub in sub-Saharan Africa by the World Intellectual Property Organisation in its latest Global Innovation Index (GII) 2019 report. Kenya’s so-called Silicon Savannah only trails upper middle income economy South Africa, with Mauritius coming third. “Kenya has a track record for recording high levels of innovation, outperforming on levels of innovation relative to GDP for the ninth consecutive year, an excellent record at par with other lower-middle-income countries like India, the Republic of Moldova, and Vietnam,” reads the report. Kenya’s innovative strength has been attributed to startups’ easy access to credit and microfinance loans. “As in previous years, Africa shines in terms of innovation relative to level of development. Out of the 18 innovation achievers identified in the GII 2019, six (the most from any one region) are from the sub-Saharan African region,” says the report. Source Business Daily

The Permanent Secretary Amb. Patrick Mugoya Tuesday morning addressed the ongoing 3rd Trade and Business Facilitation Symposium (TBFS) 2019 in Mombasa, Kenya. Amb. Mugoya highlighted on the need to improve the strategic alliance in trading between Uganda and Kenya to boost the trade volume between the two countries which currently stands at approximately USD 1.2 Billion. On commending the efforts of the Consulate of the Republic of Uganda – Mombasa led by Amb. Tayebwa Katureebe, Amb. Mugoya reiterated the importance of such platforms as a means of getting the Private Sector to share experiences, identify opportunities and challenges and agree on appropriate measures to promote trade and investment. Amb. Mugoya emphasised the duty of government officials in addressing all Non-Trade Barriers/Non-Tariff Measures and implementing decisions that have already been agreed to in a timely manner. The symposium aims to:- Strengthen cooperation and enhance coordination and partnerships among stakeholders in the trade value chain in addressing common challenges; Support the business community in making use of the Electronic Single Window for customs clearance of goods; Provide increased understanding on key trends and issues in regard to combating counterfeit products; Enlighten participants on key issues of tax policy, administration and the rationale to pay taxes; Provide an opportunity for participants to appreciate the Kenya import market; Establish a vibrant permanent platform for information sharing and amongst partners and stakeholders; Change mindsets and increase production for export. Source Edge

“The consignment was cleared automatically in the system, after the importer’s clearing agent, Express Shipping and Logistics (ESL), lodged entries in the system and paid the duty of Sh65 million before the arrival of the cargo,” said the Commissioner. The tax collector expects the next bulk consignments of  42,000 metric tonnes of clinker and 25,540 metric tonnes of coal to be cleared through the system. The former arrived at the Port of Mombasa on 7th August on-board MV Boreas Venture and the latter is expected to arrive on August, 21 by MV African Hoeg respectively. Clearance of cargo through the new system is a major milestone for KRA in tis bid to expedite customs clearance of cargo and enhance trade facilitation. The iCMS was introduced to replace the 12-year-old Simba System with key innovations, including automated valuation bench-marking, the automated release of green-channel cargo, importer validation and declaration, and linkage with iTax. “iCMS will reduce the cargo dwell time for compliant imports at the Port of Mombasa since the system does not require human intervention at the document processing center, unlike the Simba System,” said the tax collector. iCMS has been implemented in phases. The clearance module for air cargo went live on 10th May 2019, while the roll-out for land and sea cargo began on 7th July 2019 Source Capital FM