“Political openness is crucial for EAC partner states to realize integration opportunities. “There is also a need for countries to further push progress implementation of the Common Market Protocol,” said Bernd Schmidt, Deputy Programme Manager of the German Agency for International Cooperation (GIZ) when speaking to journalists from the six EAC member states who are on a media tour. The EAC Common Market Protocol, among other things, provides for free movement of goods, people, labour, services and capital across partner states. “Economic growth requires free movement of people and goods,” he insisted. According to Schmidt, trade barriers such as tariffs should also be addressed to promote regional trade which has maintained a downward trend for over four years. He attributed the decline to EAC countries preferring to import various goods including those for the pharmaceutical industry, which are mostly from Asia, North America and Europe. Schmidt said it was high time governments in the region started supporting small local manufacturing firms. He said by supporting local firms, governments will be creating jobs as well as improving the welfare of the people. He was of the view that for the EAC integration to prosper, member states should stop creating disputes since countries were now behaving like competitors, according to media reports. Chief Executive Officer of the East African Business Council (EABC) Lilian Awinja said despite the challenges, EAC integration has facilitated movement of goods and people across the region. She linked the outcome with improvements in infrastructure, especially roads. Awinja said...

Evacuation of cargo from the Port of Mombasa is set to improve following the launch of double-stack wagons on the Standard Gauge Railway (SGR) line. Yesterday, the maiden double-stack train snaked its way from Mombasa to Nairobi’s Inland Container Depot (ICD). “KPA is proud to announce the commencement of double-stacked trains from the Port of Mombasa to the ICD Nairobi,” said Kenya Ports Authority MD Daniel Manduku yesterday. Currently, each of the eight SGR freight trains transports 108 containers from Mombasa to Nairobi. Reports by KPA indicate that container off-take from the port to the ICD has registered tremendous growth, recording 5,121 Twenty-foot Equivalent Units (TEUs) in the week ending September 19. Standard measurement The TEU is the standard measurement of the containers. Avoid fake news! Subscribe to the Standard SMS service and receive factual, verified breaking news as it happens. Text the word 'NEWS' to 22840 Yesterday Kenya Railway Corporation (KR) said the double-stack train that left Mombasa was on a pilot run. “This will double the capacity of cargo evacuated from Mombasa to the ICD. We plan to have two double-stack trains by Wednesday,” said KR Commercial Manager Julius Siele. “If the off take of containers at the ICD improves, we will launch more,” he added. And importers with cargo that has overstayed or is uncollected at the port and the ICD have 14 days to clear it or risk losing it. Kenya Revenue Authority (KRA) and KPA issued the notice to importers to collect their cargo, failing which it would be destroyed. According to an advertisement in the local dailies, KPA and KRA warned that cargo that was not...

Kenya Ports Authority (KPA) has started ferrying cargo on double-stacked trains from the Port of Mombasa to the Inland Container Depot (ICD) in Nairobi. Double-stack rail transport is a form of intermodal freight transport where railroad vehicles carry two layers of intermodal containers. EASY MOVEMENT In a statement, KPA’s Acting Managing Director Daniel Manduku said the double-stacked train operations began on Sunday. The 2.7 kilometre bridge linking the port to the Standard Gauge Railway (SGR) Mombasa terminus also started operations today, boosting business at the facility. This will ensure easier movement of bulky and heavy goods such as coils, steel cars and iron into the SGR. It is the first SGR bridge that crosses the Indian The authority will now drop the use of road trucks to feed goods from ships to the rail in what is expected to lower the cost of transport and quicken the movement of goods. The port’s Head of Corporate Affairs Bernard Osero said the move is aimed at facilitating easier movement of bulky and heavy goods. The 10 berths are currently connected to the SGR terminus via a road and the authority has been offloading goods via cranes and transporting them via trucks to the SGR line. “The SGR ensures safety, security, efficiency and timeliness. There will be no congestion. Mombasa is becoming more and more efficient and secure port for cargo transportation,” Mr Osero told Daily Nation. Imported cars destined for regions other than Mombasa, that used to be ferried out of the port...

The construction of a road linking the port of Mombasa and Burundi is now complete, with the road expected to cut distance to the landlocked country by 358 kilometres. Transport Cabinet Secretary James Macharia said the 1,545 kilometre road links the port through Holili, Singida-Kobero border and finally to Bujumbura. The road will reduce the distance from Mombasa to Bujumbura through the Northern corridor by 358 kilometres. “That will enhance Mombasa port’s accessibility in the region,” said Mr Macharia during a Kenya Ports Authority (KPA) stakeholders’ luncheon in Nairobi. “To ease traffic flow between the port of Mombasa and the hinterland, also construction of a dual carriage way between Mombasa and Mariakani is ongoing and will be completed in 2020. The government plans to eventually extend the dualing of the highway to Malaba via Nairobi,” added the CS. A feasibility study on the Mombasa-Bujumbura route kicked off in 2014. According to the East African Community website, the road is one of the two transit corridors that facilitate import and export activities in the region, with the northern corridor (1,700km long) commencing from the port of Mombasa and serves Kenya, Uganda, Rwanda, Burundi and Eastern DRC. “The central corridor (1,300km) begins at the port of Dar es Salaam and serves Tanzania, Zambia, Rwanda, Burundi, Uganda and Eastern DRC,” said the website. Last week, KPA managing director Daniel Manduku told stakeholders in Nairobi that between January and June, the port of Mombasa handled 4.6 million tonnes of transit cargo, up from 4.3...

The East African Community has kicked off the process of forming a political federation by appointing a 12-member Committee of Experts to draft a regional constitution. This is in line with a directive by the region’s heads of state to the Council of Ministers, asking it to begin drafting laws that will pave the way for the achievement of the last pillar of East African integration. Julius Maganda, Uganda's EAC Minister and chairperson of the EAC Council of Ministers, said each partner state has appointed two members to the CoE to conduct research, consultations and eventually draft the East African Community Constitution by 2021. The CoE is chaired by Uganda’s Benjamin Odoki and has three years to complete the drafting of the laws. The draft will be reviewed over a year before it is submitted to the Heads of State Summit for signing. It is expected to be promulgated by 2023. According to Mr Maganda, the Council prefers a confederation to a federation initially, so as to allow the partner states to harmonise their systems before surrendering to a federation. The difference between a confederation and a federation is that membership of a confederation is voluntary. One president under one constitution When the political federation comes into force, under one president, partner states’ constitutions will become subordinate to the regional Constitution. Currently, the Treaty for the establishment of the EAC is subordinate to the partner states’ Constitutions. Source The East Africa

Michael Porter would argue that every nation has a comparative advantage — its capabilities and resources position it to deliver certain goods or services to an advantage over others. Kenya has a great wealth of resources to tap from — rich flora and fauna, arable land, minerals and an educated and highly adaptable workforce on which manufacturing and services thrive. The plethora of resources creates endless possibilities for Kenya and probably explains why we have a diversified economy. It also means there are numerous options from an international trade perspective. Vision 2030 sets out the aspiration for the country — a newly industrialising, middle-income country providing high quality of life to its citizens. To achieve this vision, Kenya needs to take a different development path. Historically, Kenya is known for tea, coffee, flowers and runners. Singapore, on their part, appreciated their limited natural resources and opted for services — shipping, tourism and financial services to mention a few. They did not have the expertise so they created an attractive environment under Lee Kuan Yew. In essence, they built a vibrant economy through imported skilled workers. Today, Singapore is an industrialised society with over 3,000 multinational corporations accounting for more than 75 per cent of its manufacturing output and direct export sales. The Port of Singapore is the world’s second busiest after Shanghai. Singapore is now the 15th largest trading partner of the US and receives over 10 million tourists a year. Kenya and Singapore were apparently at par at independence....

Kenyan exports to the region are likely to continue attracting high tariffs as East African Community member states go slow on the proposed review of the Common External Tariff. According to some countries, the review is not top on their agenda. Instead, Rwanda, Uganda, Tanzania and Burundi have turned their attention to the promise of lower tariffs proposed under the nascent African Continental Free Trade Area (AfCFTA). Tanzania Revenue Authority (TRA) Commissioner for Customs and Excise Ben Usaje said EAC countries were struggling with their own domestic fiscal demands, and that was why they were shelving the long-awaited review of the Common External Tariff (CET). He said besides the other four EAC member states, Kenya, the region’s biggest economy and which has been pushing for a review of the tariff, was also grappling with its own challenges, including implementation of the recently passed value added tax (VAT) regulations. “Since the countries participated in the AfCFTA trade negotiations, they have not shown any enthusiasm for the community's CET. Again, they are also struggling with their domestic tax regulation issues. Tanzania will be watching closely to see if the other EAC members will rejuvenate the CET review talks and then we will act,” said Mr Usaje. Kenya has been on the frontline in lobbying other EAC countries, especially Tanzania, to speed up the tariff’s review process. In 2005, when EAC countries adopted a Customs Union, they committed to the current CET. The CET comprises a triple band structure where raw materials and capital goods traded among EAC countries do not...

Arusha. Regional integration and development within the East African Community (EAC) is being undermined by a failure of member states to cooperate on key issues. Speaking in Arusha, Tanzania, Bernd Schmidt, the Deputy Programme Manager GIZ, said political openness among member states was required if integration is to be deepened, suggesting that the envisaged single currency and political confederation cannot be achieved if the successes of the Customs Union are not safeguarded and the Common Market is not pushed any further. The retricted movement of goods, services and persons including the right of establishment and the right of residence were cited as key issues hindering the acceleration of economic growth and development for the people in the region. “Trade within the EAC region has been declining for over four years now. This is a new reality for the community. You might get the impression that some East African leaders together with their administrations are happier to import be it soap, sugar, biscuits, or pharmaceuticals from Asia, North America or Europe than to support existing small firms from within the region; firms that create more of the desperately needed jobs and wellbeing among let me say brothers and sisters,” he said. Mr Schmidt who was speaking to journalists from across the EAC on a media tour of various key EAC projects urged member states to work for the greater common good than advancing selfish interests. The journalists supported by the EAC Secretariat, in collaboration with the GiZ and the East African Business...

Container off-take from the Port of Mombasa to the Inland Container Depot, Nairobi by the Standard Gauge Railway (SGR) has registered tremen­dous growth recording 5,121 Twenty Foot Equivalent Units (TEUs) in the week ended 19 September 2018. The SGR freight service currently doing an average of eight trains per day ac­counted for 44.67 percent of the total 11,462 TEUs lift­ed by both rail and road transport. A total of 6,341 TEUs were evacuated by the road trans­port which registered a de­cline of 3,281 TEUs com­pared to the previous week. Empty containers re­ceived by road registered 12,586 TEUs up from 10,366 TEUs recorded in the pre­vious week while only 511 TEUs (empty) were deliv­ered out of the port by the same mode of transport. During the week under review, 10 vessels docked at the Container Terminals registering a ship average working time of 1.77 days as the import container dwell time recorded 4.11 days. The ships discharged 15,487 TEUs (full and emp­ty)” and loaded another 15,008 TEUs. A spot check on the imports population break­down at the terminals re­vealed that 4,723 TEUs were destined to the local market while another 4,373 were transit bound. Uganda maintained her leading position in the tran­sit market accounting for 3510 TEUs an equivalent of 38.58 per cent followed by Tanzania which accounted for 338 TEUs. Other transit destina­tions included Democratic Republic of Congo (DRC) which accounted for 223 TEUs, South Sudan with 186 TEUs and Rwanda with 93 TEUs. Burundi and Somalia recorded 12 TEUs...

Tanzania maintains it will not allow duty-free access of Kenyan confectionery products and manufacturers must pay a 25 per cent levy. The country’s Commissioner for Customs and Excise Ben Usaje said Kenyan manufacturers enjoy the use of zero-rated industrial sugar in the production of juice, ice cream, chewing gum, sweets and other confectionary products. He said a team set up by East Africa Community to look into the matter did not arrive at a conclusive position leaving Tanzania no option but to maintain the tax. “We will continue slapping the products with 25 per cent duty until maybe when another study is done,” said Usaje. He said the team failed to answer the question on whether the Kenyan exports were being manufactured through the use of zero-rated industrial sugar. Usaje said the EAC team also failed to take a clear position on whether the products qualify for free entry into Tanzania market. “The team of experts left us in dilemma on what they had gone to test,” said Usaje. He was speaking on Tuesday at Tanzania Revenue Authority headquarters in Dar es Salaam. The EAC team reported that products manufactured using industrial sugar when transferred to the EAC qualify for preferential tariff treatment provided they meet the criteria set under the Rules of Origin and any other set conditions. The team said Kenya should provide a position to the EAC partner states on the quality of sugar imported into Kenya. It also recommended the Kenya Sugar Directorate put tighter controls...