The port of Mombasa is losing business from Rwanda as more traders opt for the to Dar es Salaam. Figures from the Rwanda Revenue Authority (RRA) show that 70 per cent of Rwandan imports passed through Tanzania via the Central Corridor. Only 30 per cent of the country's imports passed through Mombasa port before finding their way into Rwanda through the Northern Corridor. According to the RRA Deputy Customs Commissioner Alex Mujeru, recent improvements at the Dar es Salaam port had spurred efficiency, coupled with a relatively shorter distance from the Tanzanian port to Kigali. This has encouraged Rwandan traders to use Dar for their imports. “So many changes have taken place along the Central Corridor since the East African Community (EAC) initiated the Single Customs Territory (SCT) which have led our traders to favour the Dar port,” said Mr Mujeru in an interview with The Standard in Kigali last week. “For example, the non-tariff barriers (NTBs) that hindered transport of cargo in the Central Corridor, and which led our importers to take the business to the longer Northern Corridor beginning from Mombasa port, have been eliminated. The Dar port is more favourable now,” he added. Some of the NTBs include roadblocks. From Dar to Kigali, there were 28 roadblocks, which could slow down transportation of cargo by up to 16 days. The roadblocks have since been reduced to four, cutting cargo transport to Kigali by up to seven days. Again, as a result of the enactment of SCT along...

A photo on the East African Community’s (EAC) website is worth a thousand words: It shows two beaming faces; one of the EAC Secretary General and the other of a senior official in the German Ministry of Foreign affairs. Germany had just pledged funding worth 61.5 million Euros to commemorate 20 years since its cooperation with the EAC. The cooperation is nothing more than the annual financial aid without which the EAC would not function. That is a state of affairs the community had not been ashamed to live with all that time. In fact, the German official alluded to it when he suggested that the EAC strengthen its own financial resources. It was like reminding them that they were tired of supporting someone who was unwilling to stand on their own. Every now and then, we hear about EAC members falling behind with their financial contributions. Some have arrears that go back years as if they are members by name only but have no real commitment. When we have members that have not fully implemented the Common Market Protocol, when Non-Tariff Barriers are still in place and have not yet adopted the Mutual Recognition Agreements (MRA) to ease the movement of professionals in the region, one wonders whether the monetary union – leave alone political federation – will ever see the light of day. The image of the EAC SG gratefully shaking hands with the German godfather is really disturbing and we should be ashamed of moving around with...

Earnings from exports by Kenyan sugar confectionery firms fell by Sh136 million in the six months ended June compared with a similar period last year, statistics show, partly reflecting unending trade tiff with Tanzania and Uganda. Kenya National Bureau of Statistics (KNBS) latest data indicate earnings from sugar confectionery such as sweets, biscuits and chocolate dropped to Sh2.378 billion in the period from Sh2.514 billion a year earlier. Dar es Salaam and Kampala slapped a 25 per cent duty on Kenyan-made sugar confectionery earlier in the year, claimed use of zero-rated industrial sugar which tilted competition in favour of Nairobi factories. The restrictions arose after Kenya successfully applied for a year-long permission from the East Africa Community (EAC) July 2017 to ship in table sugar at duty free following a biting drought that cut production. Tanzanian and Ugandan authorities have claimed Kenyan factories took advantage of the window to import industrial sugar at zero duty as opposed to 10 per cent under the EAC Common External Tariff. Verification missions from Dar and Kampala separately failed to prove claim of use of zero-rated industrial sugar by Kenyan sugar confectionery makers. They, however, maintain the restriction of duty-free entry for Kenyan-made confectionery products will continue until they are satisfied no zero-duty industrial sugar is being used in their processing. The KNBS data shows 14,287.6 metric tonnes of sugar confectionery were exported in the January-June 2018 period, a drop of 1,542.9 tonnes compared with the same period a year earlier. The Kenyan confectionery...

Plans to build a 470 kilometre road along the shores of Lake Victoria to stimulate its economic vibrancy could start soon, we can reveal. The design of the Sh70 billion road running from Bumala at the Busia border with Uganda to Muhuru Bay in Migori County border with Tanzania is complete and has been approved. The feasibility study and design was done at a cost of Sh300 million. Once the Government receives a report detailing the number of people to be displaced by the road, the National Lands commission is expected to do valuation of the project-affected parcels and compile a register for compensation as the Government scouts for funds from development agencies such as World Bank or the African Development Bank. Each of the sections will take up to three years to complete, according to summary papers on the project. The Government is rooting for one-off funding to have the phases run concurrently, highly placed sources intimated. President Uhuru Kenyatta in his visit of the region later this month is expected to highlight the project mooted three years ago as part of Jubilee flagship projects. The road will pass through Siaya, Kisumu and Homa Bay. It is expected to accelerate free flow of goods and services across five counties while providing connectivity to the rest of the country's national road network, thereby spurring growth economic growth in the region. It could also catapult the western Kenya tourism circuit onto the global tourism map since it extends spurlines into destinations...

Kenyans increased their purchase of second-hand clothes by a fifth in the first half of the year to Sh7.8 billion, derailing the government plan to consume locally made textiles. The Kenya National Bureau of Statistics data shows the import bill for second-hand clothes in the period rose 20 per cent from the Sh6.5 billion last year. Mitumba dealers said business picked up well at the beginning of the year after the prolonged electioneering period. “From January to June, bail price remained consistent. However, since reading of the budget, business has been slow and a bail of grade one skinny jeans I used to buy at Sh16,000 now costs Sh20,000,” said Sophy Osano who sales mitumba at Imenti House in Nairobi’s central business district. Treasury secretary Henry Rotich imposed an import duty of $5 per kilo (previous $0.2 per kg) or 35 per cent, or whichever is higher on textiles and footwear. The higher taxes, he said, are aimed at guarding against the low prices of imported goods, which make it difficult for local industries to thrive. Mitumba dealers have blamed the tax increases for the slow pace at which cargo is cleared at the Mombasa port. “The storage costs are passed on to us. I used to import two 40-feet containers monthly but now financial constraints mean I can only manage a 20-feet container every two months,” said Shem Spiess, a mitumba wholesale dealer in Mlolongo, Machakos. Kenyans prefer mitumba owing to high quality, design, and fair pricing, which have...

Arusha. The German government’s committment of 61.5 million euros (Sh162 billion) to the East African Community (EAC) is set to boost the private sector development in the region. Also to benefit are entrepreneurship projects for the youth as well as technical and vocational training. “We, at the EAC, fully embrace the priority areas embedded in our cooperation with Germany,” said EAC secretary general Liberat Mfumukeko here on Friday. He spoke to a high powered delegation from the economic power house in Europe which visited Arusha with a pledge of 61.5 million euros as economic support to the region. The event coincided with the 20th anniversary of the joint partnership between Germany and the EAC economic bloc which was in its infancy stage. Mr Mfumukeko hailed the German support to the Community in the last two decades, saying it has enabled the bloc to record significant achievements in diverse sectors. Sectors which benefited include monetary harmonisation, trade and customs, institutional capacity strengthening, health and pharmaceuticals,gender and education and the Partnership Fund. Economic diversification, mobilisation of the private capital, value addition and investment in entrepreneurship are among other priority areas in the German-EAC development cooperation, he explained. Mr Niels Breyer, the head of the Division East Africa at the Federal Ministry for Economic Cooperation and Development (BMZ) in Germany, elaborated his country’s support to the EAC is based in the Marshal Plan for Africa. The plan aims aims to support the six partner countries in the region in implementing the development visions...

Arusha/Dar. The East Africa Legislative Assembly (Eala) has turned down the much-anticipated EAC regional Statistics Bill after the Committee on Communications, Trade and Investment (CTI) overturned recommendations made by the ministerial committee. Many of Eala members from the six partner states wanted Section 7 (2) of the draft made during the ministerial committee meeting to be reinstated. In the ministerial committee through the section in question ministers proposed that the director position for the new regional body should be filled by people who hold a master’s degree in statistics with ten years of experience. However, after going through the recommendations, CTI proposed that the head of statistic bureaus from the partner states should automatically hold the positions. It was sent back for amendment and will be debated in the next session scheduled for November. “The Bill drew stiff debate in the house as most of the members opposed the proposals made by the CTI,” Dr Abdullah Makame, from Tanzania told The Citizen over the phone. Reports indicate that Tanzanian Eala members wrote a letter to the Clerk of the regional Assembly on Monday to request for reinstatement of the earlier provision of Clause 7 (2) of the said bill. In effect, Tanzanian member, supported by those from other member states rejected the amendments. Thirteen lawmakers from Uganda, Kenya, Burundi, Rwanda and South Sudan supported the adjournment of the debate of the crucial legislative document. However, Paul Musamali from Uganda opposed the Motion on adjournment of the Bill as announced by...

The East African Business Council has asked member states of the East African Community to adopt the regulatory framework for Mutual Recognition Agreements (MRAs), as stipulated in the region’s Common Market Protocol, in order to facilitate easy movement of professionals in the region. Nicholas Nesbitt, the Council Chairman said although the six member states signed the protocol, the movement of labour especially in specialized fields has not been implementing because of the failure by member states to implement MRAs. MRA is an international pact by which two or more countries agree to recognize one another’s conformity assessments. The objective for signing an MRA is to enable professionals in one country to be recognized in all regional states, thereby easing free movement of specialized services across the region thus facilitating free movement of professionals across the EAC. Currently, professionals including veterinary doctors, accountants, architects, and engineers, among others cannot freely export their services in the region. According to Nesbitt, the challenge is that some partners have not liberalized some services sectors under the MRAs while others lack regulatory authorities to facilitate implementation of the MRAs. “Tanzania has not liberalized the architectural and veterinary services while Kenya has not liberalized the veterinary services,” said Nesbitt. To overcome such challenges, the East African Business Council wants the EAC member states to finalize the signing of all pending MRAs alongside liberalizing of professional services where MRAs have been negotiated among the member states. Furthermore, to ease the movement of professional skills in the region,...

East African Community partner states continue to introduce tariff and non-tariff barriers that are hindering intra-regional trade and putting integration at risk. Manufacturers of confectionery in Kenya, oil and fats in Uganda and a wheat and juice producer from Tanzania reported encountering tariff and non-tariff barriers that blocked them from entering regional markets. Yasin Billo, export manager of Tanzanian industrial conglomerate Bakhresa Group, said the company currently has 15 trucks stuck at the Tanzania-Kenya border because the Kenya Revenue Authority changed the rules and systems for exporting goods to the country. However, Tanzanian Commissioner for Customs and Excise Ben Usaje said Bakhresa Group believed they were being mistreated because of the continued dispute over Kenyan confectionery. Customs officials in Tanzania have blocked Kenyan confectionery products because they were allegedly manufactured using sugar that was imported at zero rate, instead of the EAC’s 100 per cent CET. Sugar dispute In 2017, Kenya faced a sugar crisis that prompted importation of sugar at a zero tariff. Under the EAC regulations, this rate should have been 100 per cent, since sugar is a sensitive product that needs protection from dumping. Mr Usaje said it is this sugar that the confectionery manufacturers are using and such products will not be allowed into the Tanzanian market unless a 25 per cent import duty is paid on them. Mr Usaje added that Kenyan confectionery will not enjoy duty free rates in the Tanzanian market until the EAC forms another committee that declares their processes legitimate. An...

The Kenya Revenue Authority (KRA) has caused jitters with its efforts to monitor flow of imports across East Africa, threatening roll-out of a shared cargo tracking technology meant to curb dumping of goods in the region. Traders from landlocked states, upset with what they see as KRA’s “big brother attitude”, are slowly gravitating towards Tanzania which has resisted the anti-dumping technology since it was broached a decade ago. “It doesn’t feel right that KRA keeps tracking your consignment beyond the Kenyan border,” Ms Jennifer Mwijukye chief executive of Unifreight Group, a Uganda-based clearing and forwarding firm, said in Kampala on Tuesday. Ms Mwijukye, one of the private sector architects of the single customs territory, maintains that tax agencies in Kenya, Rwanda And Uganda have been charging higher fees for regional tracking system “instead of tracking cargo within the national borders. “Kenya should have its seal untagged at the exit border post as long as the importer declared and paid all the taxes (demanded by country of destination) at the port of Mombasa.” So far, the Regional Electronic Cargo Tracking System (RECTS), funded by Trade Mark East Africa through a grant from the UK’s Department for International Development, has integrated transit cargo tracking platforms for Kenya, Uganda and Rwanda. The aim is to also bring Tanzania and Burundi on board. The connected national revenue agencies are able to monitor goods, from the time it is tagged at the Port of Mombasa to the final destination. According to KRA’s customs commissioner Julius...