News Categories: Kenya News

EAC currencies battered, Kenyan shilling stays firm

Kampala. East African currencies, including the Ugandan and Tanzanian shillings as well as the Rwanda franc have taken a beating as they continue to weaken against the dollar. The Ugandan shilling has edged downwards by 3.6 per cent against the dollar since January while the Tanzanian shilling has edged by 1.8 per cent. The Rwanda franc has been a bit resistant only weakening by 0.9 per cent. The Uganda shilling has been the worst hit closing last Thursday at Shs3,824 against the dollar, according to Bank of Uganda. The weakening trends present a tricky situation for the region, which has been recovering from a difficult period characterised by a rapid increase in imports, relatively violent elections and slowed economic growth. This has not been helped by stagnated or reduced growth in the export sector. The Uganda shilling, according to Mr Stephen Kaboyo, the Alpha Capital managing partner, has been undermined by surging dollar demand amid low forex inflows. “Bank of Uganda’s intervention [last week] provided a short period of relief,” he said, highlighting the likelihood of continued weakening of the Uganda shilling in the weeks ahead. “Outlook indicates sustained weakening in the coming days on account of intense demand from importers and commercial banks,” he said. The Central Bank, Mr Kaboyo said, had last week only sold Shs101b worth of dollars against the targeted Shs180b after the unit lost almost Shs50 of its value in just three days. Earlier, Bank of Uganda had said it would not intervene in the...

Dongo Kundu bypass to ease transport

Transport and trade in and around the port city of Mombasa received a major boost with the opening of the first phase of the Sh11 billion Dongo Kundu bypass. The bypass will ease transport of cargo by road from the port of Mombasa and boost business between Kenya and Tanzania. Residents, too, will have an alternative to the congested Likoni channel once phases two and three of the project are complete. “There is also the Dongo Kundu special economic zone whose construction will move faster because of the completion of the road. When the zone is complete our youth will secure employment,” said the president, who was flanked by his deputy William Ruto and Mombasa Governor Hassan Joho. President Uhuru Kenyatta said the road will open up the economy of Mombasa and the entire country. He said the 10 kilometre Miritini-Mwache-Kipevu link road or phase one of the Dongo Kungu bypass was part of the thousands of kilometres of roads his government was doing. Related Content Sh11bn ocean bypass ready for use MAJOR DEVELOPMENT “There are those who said that some roads like the Mariakani- Bamba road will not be a reality but they can now see that movement has been smooth on that road and no passenger or motorist is delayed,” he said. The major infrastructure development by Kenya National Highways Authority (KeNHA) has transformed Mombasa, easing traffic and movement of people and goods. Mombasa is Kenya’s main international gateway by sea and therefore crucial to its economy. The...

Feature: Chinese-built expressway speeding up traffic to Uganda’s gateway

KAMPALA, June 15 (Xinhua) -- Bridging over a swamp fully covered with green weeds, the 1,450-meter-long Nambigirwa bridge in southern Uganda is one of the longest bridges in East Africa. The bridge is part of the Chinese company-built Kampala-Entebbe expressway that links the Ugandan capital Kampala and the country's main gateway Entebbe International Airport. The whole expressway project consists of a four-lane dual carriageway with the length of 49.56-kilometers, bridges, major interchanges, underpasses and toll plazas. The construction of the project started in 2012. China Communications Construction Company Limited (CCCC), the constructor, handed over a 4.1-kilometer-long reconstruction section on Nov. 12, 2017 and a 37.21-kilometer-long toll section on May 18, 2018. Currently, the expressway is capable of being open to traffic and is in trial operation. Funded by the concessional loan from China, the expressway is expected to alleviate problems in terms of travel time and comfort, and to enable people to do business more efficiently, according to Edward Katumba-Wamala, Ugandan Minister of State for Works. Over the years, travelers passing through the Entebbe airport have increased hugely, and the number of the travelers is likely to increase with time, Wamala told Xinhua. On the other hand, the traffic volume in Uganda has been increasing over the years and roads that were made for the traffic of the 1970s can no longer accommodate the traffic of today, he said. One of the pains people are facing when travelling to and from the airport is that at times they would miss...

Kuria to present new Bill that seeks to ban raw coffee export

Gatundu South MP Moses Kuria has said he will present a bill that seeks to ban the export of unprocessed coffee to boost farmers’ earnings. Kenya’s coffee accounts for about 1 per cent of the annual global output, but the top quality Arabica beans are sought after by global roasters who use them to blend with other varieties. Raw coffee beans, which are Kenya’s fifth biggest source of hard currency, are usually sold at a weekly auction in Nairobi or directly to buyers abroad who then roast, package and sell them at a hefty premium. Coffee exports earned $214 million (Sh21.4 billion) in the year to March. Kuria said some countries are importing raw Kenyan coffee, processing it and re-exporting it back to Kenya for sale at the expense of farmers who “do not reap maximum benefits from their produce”. He said his new bill will prohibit the export of raw coffee in any form. “I am introducing a bill in the National Assembly to provide that coffee be exported only in processed form having been roasted, milled, packed and branded, clearly labelled with a ‘Made in Kenya’ inscription,” Kuria said in a letter to the Speaker yesterday. There was no immediate comment from the Ministry of Agriculture or coffee exporters. Kenya’s coffee output peaked at 129,000 tonnes in 1988-89, but has since dropped steadily due to poor management and global price swings. Farmers have switched crops or sold their land. Kenya’s harvest fell 12 per cent in the 2016-17...

Help for Singapore firms to enter East Africa

Enterprise Singapore (ESG) opened a centre in Kenya yesterday - its third in Africa - to help Singapore companies enter the region and boost trade and investment between both markets. The centre in the capital Nairobi will serve as a regional hub for East Africa and complement ESG's outlets in Johannesburg, South Africa, and Accra, Ghana. ESG assistant chief executive Yew Sung Pei said: "Today, over 60 Singapore companies operate in Africa across more than 50 countries. Interest from Singapore companies is growing. "Our (Nairobi) office will identify opportunities for Singapore companies, broaden our networks and strengthen the Singapore brand in the fast-growing region." ESG has identified several growth sectors in East Africa where Singapore firms can contribute, including fintech, e-commerce, logistics, light manufacturing and urban solutions and energy. The official opening coincided with a state visit to Kenya and Rwanda by Deputy Prime Minister Tharman Shanmugaratnam, who is also Coordinating Minister for Economic and Social Policies, and Dr Koh Poh Koon, Senior Minister of State for Trade and Industry. The delegation is being accompanied by 20 Singapore firms on a business mission organised by ESG and the Singapore Business Federation. East Africa is the fastest-growing region in the continent and accounts for 22 per cent of Sub-Saharan Africa's total gross domestic product. It grew 5.9 per cent last year to $467.6 billion. The region is home to some of the fastest-growing economies in Africa, including Ethiopia, Kenya, Rwanda, Tanzania and Uganda. Singapore's economic ties with the region have been...

Kenya Africa exports slide continues to new eight-year low

Kenya’s exports to key markets in Africa fell to an eight-year low in the first four months of the year, official statistics show, continuing a trend that has been reflected in annual data over the years. Latest data by the Central Bank of Kenya (CBK) show earnings from the continent were about Sh71.44 billion, a 4.5 per cent drop compared to the same period in 2017 and the lowest since 2010. Reduced trade between Kenya and the rest of Africa is in keeping with a trend observed in the 12 months to December 2017. Kenyan factories have been losing their market share in Africa despite the country being a member of the six-nation East African Community (EAC) and 19-member Common Market for Eastern and Southern Africa (Comesa) partly due to import substitution amid dwindling industrial competitiveness. Export orders from neighbouring Uganda, the country’s largest market in Africa, for example fell by 5.69 per cent in the period to Sh20.41 billion, maintaining a flat trend witnessed in recent years. “We don’t get our VAT refund on time, we don’t get export incentives and that’s why our trade within the region has been reducing,” Kenya Association of Manufacturers (KAM) vice chairman Sachen Gudka said in an interview late April. “The government should address competitiveness because when you look at Kenya in terms of global benchmarks, cost levels are at least 10 per cent higher.” Kenya’s exports to Africa, however, accounted for 33.74 per cent of her total exports, which stood at Sh211.71...

Parliament starts ratification of 26-country African free-trade area

Parliament has begun the ratification process of the Tripartite Free Trade Area (TFTA) agreement, which will create an integrated market between 26 African countries. Parliament’s trade and industry committee was briefed on the agreement on Wednesday by Department of Trade and Industry chief director Wamkele Mene, who said ratification by SA would send a strong signal of its commitment to regional integration. SA is also engaged in negotiations on the Continental Africa Free Trade Area and the department’s director-general, Lionel October, told the committee that it was now ready to sign it. SA signed the TFTA agreement in July 2017. It will enter into force once it has been ratified by 14 member states. So far only Egypt, Uganda and Kenya have ratified it. The TFTA will include members of the Southern African Development Community (Sadc), the Common Market for Eastern and Southern African States (Comesa) and the East African Community. These countries have a combined gross domestic product of $1.2-trillion and a combined population of about 626-million people. Some TFTA countries, such as Rwanda, Ethiopa and Tanzania, are among the fastest-growing economies on the continent. SA’s trade with TFTA countries represents about 16% of its total trade with the world. In 2017 SA’s total trade with TFTA countries amounted to $27.6bn. "SA will build on its current share of the African market and have access to a larger, more integrated and growing regional market. This has the potential to stimulate industrial development, investment and job creation," Mene said. He...

Uhuru to open first phase of Sh11 billion Dongo Kundu bypass

President Uhuru Kenyatta is slated to officially open the first phase of the Sh11 billion Dongo Kundu bypass to decongest Mombasa which has been bedevilled by huge traffic snarl-ups affecting movement of people and goods. Mombasa is Kenya’s main international gateway by sea and crucial to the country’s economy. The Port of Mombasa is also used by most of neighbouring land-locked countries to import goods. Deputy President William Ruto announced during his recent tour of the coast that ended Thursday that Mr Kenyatta will open the 10-kilometre bypass Thursday. He said the government was building the Mombasa-Mariakani Road that would ease traffic along the busy Nairobi highway. “And this Thursday, the President will be here to open the Southern Bypass road, which has already been completed and we will continue putting up roads here, as you are aware Dongo Kundu will go up to Kwale County. “All this is done to ensure that Mombasa is among counties being developed by our government,” said Mr Ruto. Opened last week The Kenya National Highways Authority (KeNHA), headed by Director-General Peter Mundinia, opened the bypass to the public last week. Plans are underway to build the second and third phases of the bypass to connect the North and South coast. KeNHA Assistant Director of Corporate Communication Charles Njogu said the bypass is expected to decongest the Mombasa-Nairobi highway. The work started in July 2016. The road runs from Mombasa port’s second container terminal to Nairobi highway at Bonje, near Mazeras. “This is a...

Kenya inks deal with Singapore to eliminate double taxation

NAIROBI, June 12 (Xinhua) -- Kenya on Tuesday signed an agreement with Singapore to phase out double taxation and attract investments from the Southeast Asian country in key sectors like agro-processing and financial services. Henry Rotich, the Cabinet Secretary for National Treasury and Planning, said the elimination of double taxation will promote trade between the two countries alongside sharing of expertise required to hasten economic growth. "The main objective of eliminating double taxation is to create a conducive environment for investments and trade in goods and services between Kenya and Singapore," said Rotich. "Other benefits include facilitation in tax administration through sharing of information by tax authorities of the two countries, hence checking tax evasion," he added. Rotich said that Kenya is keen to tap into Singapore's expertise in policy and regulatory reforms as well as human resources development that catapulted it to middle income status within a short period. Currently, the balance of trade between Kenya and Singapore is in favor of the latter and represents a deficit of an estimated 51 million U.S. dollars. According to Rotich, Kenya's exports to Singapore that includes tea, fruits, nuts and vegetables stood at 30 million dollars while imports from the country that included synthetic fibers and polymers stood at 50 million dollars in 2017. He said the signing of an agreement on promotion of investments between Kenya and Singapore will help address the yawning trade deficit. "The agreement is also designed to encourage investor confidence by setting high standards of investor...

Kenya Railways set to build cargo facilities along SGR

Kenya Railways Corporation (KRC) has announced plans to partner with the private sector to build more cargo storage facilities along the Mombasa-Nairobi standard gauge rail (SGR) line. The move is aimed at easing pressure on the Sh23 billion inland container depot (ICD) at Embakasi that was launched by President Uhuru Kenyatta last December. “We are going to partner with the private sector to build more cargo storage facilities along the Nairobi-Mombasa SGR line to improve port evacuation and ease congestion at the ICD in Embakasi,” said Kenya Railways Managing-Director Atanas Maina. Mr Maina, who was speaking to ‘Shipping and Logistics’ in an interview, said feasibility studies to ascertain the cost of the project are ongoing and will take two months. Once the study is done, he said, the project will start as soon as funds are available. Works on the high speed line, he said, will take about three years to complete. “I cannot be able to tell you the total amount of money we require to implement this project at the moment. All I know is that the amount involved is quite huge and it’s the reason we are partnering with the private sector,” he said. Currently, the ICD has capacity to handle 450,000 TEUs per year, up from its original design of 180,000 TEUs. It receives four trains daily carrying 108 containers each, ferrying a total of 432 container units daily to the ICD since April 1. There are plans to increase the trains to five from May...