One major factor that has continued to stigmatize the continent of Africa is lack of infrastructure. The African Development Bank (AFDB) reported that Africa has an infrastructure gap that would require approximately $112 billion per year over the next decade to fix. This situation explains why both intra-and extra-African trade has been negatively impacted over the years. The development of infrastructure in the transport sector including rail systems, roads, new maritime routes and ports expansion, are crucial to trade facilitation and economic growth. Now, it appears this critical issue is receiving some attention following an aggressive push from all stakeholders including multilateral agencies. Many African countries have started addressing this challenge as we have seen turnkey projects being undertaken across the region through different partnership vehicles and financial models. According to Deloitte’s Africa Construction Trends (ACT) report of 2017, 303 projects valued at $307 billion are currently ongoing in the continent with Transport and Power sectors dominating. Sub-Saharan Africa is experiencing unprecedented magnitude of infrastructural development in the transportation industry especially railways. In East Africa – Djibouti, Ethiopia, Kenya and Tanzania have launched major transportation programs linking ports expansion to modern rail systems and road networks to facilitate easy access to market. To reference a few of these key projects, under the East African Railway Master Plan, the Standard Gauge Railway (SGR) system connecting port of Mombasa to Nairobi will eventually be extended to Uganda, Rwanda, South Sudan and Ethiopia. This megaproject is currently transforming logistics in the sub-region. Ports...

Kenya has already stored 70,000 barrels of crude in Lokichar in readiness for transportation to the Port of Mombasa by specialised lorries for exportation. Principal Secretary Andrew Kamau said Kenya is now ready to export crude oil through the Early Oil Pilot Scheme (EOPS) citing the delay of Petroleum Bill 2017 as the only impediment. He said Kenya hopes to start transporting oil from Lokichar basin in Turkana to the Port of Mombasa for shipment to the international market. “We are ready to pilot, we are just waiting for the Bill because the oil is already in the tanks,” he said. Kamau said the early oil exports would be followed by commercial production and exports after the pipeline is completed in 2021. Petroleum Chief Administrative Secretary John Musonik said there is still a number of issues that need to be cleared pertaining the sharing of revenue as stipulated in the Bill. “The issues of who gets what is still a problem because right now it (the Bill) states that the national government gets 70 per cent, 20 per cent goes to the county and 10 per cent to the community. But that still needs to be defined when operationalising some of these issues,” he said. The Bill, which outlines how the revenue is shared among sharing to the national government, counties and the community surrounding the oil resource must be passed before large-scale oil production can begin. That however, is posing the greatest challenge after it was temporarily withdrawn last...

All consolidated import cargo will be fully inspected to weed out counterfeit, contraband and substandard goods, the government has announced. In a statement on Thursday, Industrialisation and Trade Cabinet Secretary Adan Mohamed said an incinerator will be installed at the Port of Mombasa to hasten destruction of counterfeit, substandard or contraband goods. Kenya Bureau of Standards (Kebs) Managing Director James Ongwae said a multisectoral team operating in all the entry points will be inspecting consolidated cargo. “This is effective from today. If we find substandard goods it is going to be destroyed. We have also commenced a 100 per cent inspection of all containers carrying used shoes and clothes. "We have already condemned two containers carrying used clothes and shoes at the port of Mombasa. All imports through Eldoret airport will undergo a 100 per cent inspection,” warned Mr Ongwae. Owners He said the team has a list of owners of some of the 163 condemned containers with goods valued at Sh250 million. Ten of the containers were on Wednesday destroyed. Kebs boss led ministry officials in destroying the substandard imported goods worth more than Sh15 million. The remaining containers are earmarked for destruction in the coming weeks. The destruction at Bamburi Cement plant is part of the government’s efforts to end importation of fake goods. “Some of the owners went underground after their containers were discovered to be substandard. But in cases where the owners are known they will be prosecuted. Most of the items were imported through a...

The ability of global trade to feed the world is one of the great success stories of the past generation. More than 1 billion people faced hunger on a planet of 5.6 billion a quarter-century ago; that number has fallen to 800 million, even as the population has grown to 7.6 billion. Trade has brought much of that progress: Shippers and exporters have become better and better at getting affordable food from places of surplus to regions of scarcity. But the planet is at rising risk of choking on its good fortune. More people, less hunger In billions, 2000-2016 Population Undernourished The shipping of farm commodities by road, rail and sea—the basics of how a harvest gets from Point A to Point B—remains concentrated on increasingly vulnerable trade routes that, when disrupted, become “chokepoints” in the global food supply, suddenly raising food prices and cutting off supplies when they fail. From aging locks and dams on the Mississippi River and days-long traffic delays in the heart of Brazil to political unrest on routes serving the Black Sea, the Middle East and China, transit networks are strained from growing agricultural shipments. Agricultural goods exported worldwide Billions of tons, 1990-2016 Global farm-commodity trade volume nearly tripled from 2000 to 2016, to 1.66 billion tons, according to UN data. Nearly half of all soybeans, almost a quarter of all wheat and more than an eighth of all corn is traded internationally, according to U.S. Department of Agriculture data. Percentage of major crops exported...

President Uhuru Kenyatta has said Kenya Railways will extend promotional freight charges on the standard gauge railway (SGR) by five months from June 30. He said the lower tariff would last until the end of the year as the State woos shippers to embrace the multi-billion shilling investment. “We’re going to extend current concessionary rates from the 1st of July 2018 to December 31,” said Mr Kenyatta. Madaraka Express freight service customers have been enjoying the promotional tariff since January. The tariff was supposed to end on April 4, but towards the end of March the Kenya Railways extended it to end of June. This has seen SGR freighters pay a flat fee of Sh35,000 for a 20-foot container and Sh40,000 for a 40-foot container from Mombasa to Embakasi Inland Container Depot (ICD). The Kenya Railways has also been charging Sh25,000 to transport a 20-foot container and Sh30,000 for a 40-foot container from ICD to Mombasa. The rates, however, exclude the cost of handling cargo and returning of empty containers. Kenya railway introduced a market price of Sh64,500 for a 20-foot container and Sh84,300 for a 40-foot container in January and cut the fares following reduced traffic. The move comes in the midst of a row with freighters who have defied a government directive to transport their imports via the standard gauge railway. Under the new tariff, which took effect on May 1, domestic import container through the ICD will attract Sh2,000 and Sh3,000 for a 20-foot and 40-foot containers...

The Sh300 billion Nairobi-Mombasa expressway will now be built and owned by a private investor after the government opted out of taking a loan to build the mega highway to curb the ballooning public debt. Transport and Infrastructure Cabinet Secretary (CS) James Macharia said Tuesday the 473-kilometre road will be built using money from private investors who will then recoup back their cost by charging a toll fee. Pressure The State has come under increasing pressure to cut increasing public debt that is now threatening to cross the Sh5 trillion mark. American contractor Bechtel Executive, tapped to build the road, has been pushing Kenya to take a loan for the project, arguing the Public Private Partnership (PPP) model would cost the government Sh540 billion in the next 25 years. Mr Macharia maintained the PPP model, which will later see the infrastructure transferred to the State, was a cheaper option for taxpayers. “We do not want to take more debt if the private sector can do the job. National Treasury team through the PPP unit and their advisers have done the maths, and preference is for PPP option,” Mr Macharia said in a telephone interview. Warnings Kenya’s public debt, whose rapid build-up has triggered warnings from international agencies such as the IMF, has for the first time exceed the Sh4.5 trillion mark, reflecting the Jubilee government’s increasing appetite for loans. The debt in June 2013 was Sh1.8 trillion. Taxpayers will spend Sh870.52 billion or half of taxes on debt repayments in...

Kenya will not sign a free trade agreement that China has been negotiating with the East African Community (EAC) partner States since 2016, Trade principal secretary, Mr Chris Kiptoo has said. Mr Kiptoo Monday said the decision, which could trigger diplomatic unease between Nairobi and Beijing, is intended to protect Kenya's nascent manufacturing sector from being over-run by China's cheaper and more efficient producers. The current trade balance is skewed heavily in favour of China, and the proposed comprehensive free trade agreement (FTA) would see Chinese goods access the EAC market at more favourable tariffs. "China already accounts for 25 per cent of Kenya's import bill under the current common external tariff structure of zero per cent, 10 per cent and 25 per cent for raw materials, intermediate goods and final goods respectively. "This means that China is likely to get even a larger share of Kenya's market once we enter into a free trade arrangement," said Mr Kiptoo. China has been negotiating for the creation of a free trade agreement with EAC for the past two years. "China accounts for less than two per cent of our exports currently. An FTA with China might improve our export share but not significantly. A preferential trade agreement with China is what we prefer... an AGOA type of trade," said Mr Kiptoo. The Asian economic giant wrote to former EAC Secretary-general Richard Sezibera proposing to negotiate with the EAC partner states a comprehensive free trade agreement. China also requested to undertake a...

Kenya has has warned it will block the entry of Tanzanian goods into the country after Dar es Salaam’s refusal to allow duty-free entry of Kenyan-made confectionery, juice, ice cream and chewing gum. Tanzanian authorities have been given up to the end of the month to visit the Kenyan firms to find out if imported industrial sugar is being used in the products at the centre of the trade spat which remains unresolved since March. Dar slapped a 25 per cent import duty on Kenyan firms in confectionery business, citing use of imported zero-rated industrial sugar in the goods. “Tanzania Verification Mission to visit Kenya on use of duty free sugar imports on confectioneries to be completed in two weeks (May 31, 2018). "Failure to adhere will result in implementation of retaliatory measures,” said the report of a presidential roundtable. “All manufacturers (have been) requested to comply and co-operate with the Tanzania Verification Mission.” Rejected certificates Tanzania rejected certificates of origin issued by the Kenya Revenue Authority (KRA) and opted to levy 25 per cent import duty on Kenyan confectioneries. Acceptance of the certificate — a document showing where a product has originated from and is used to determine duty for imported goods — guaranteed the entry of Kenyan goods tax-free passage to Uganda and Tanzania. The East Africa Community common market made up of Tanzania, Kenya, Uganda, Rwanda and Burundi allows free movement of locally manufactured goods within the bloc. Tanzania and Uganda revenue bodies have however accused Kenyan...

Chief justices from the East African Community member states want to be officially involved in the activities of the bloc so they can help coordinate legal affairs and strengthen administration of justice in the region. The chief justices said they are ready to offer legal solutions to “the controversies standing in the way of integration process.” They said that the treaty which established the EAC envisaged judiciary cooperation but felt short of giving proper elaboration on the engagements. COLLABORATION The CJs resolved to revive the East African Community Chief Justices Forum (EACJF) to enable them engage with other arms of regional governments and the regional integration body. The chief justices were in Nairobi for a consultative forum on enhancing regional collaboration in the administration of justice. Those in attendance were David Maraga (Kenya), Ibrahim Juma (Tanzania), Bart Katureebe (Uganda), Omar Makungu (Zanzibar), Chan Madut (South Sudan) and Sam Rugege (Rwanda). Somalia Chief Justice Ibrahim Suleiman attended as an observer. East African Chief Justices Forum President Emmanuel Ugirashebuja was also present. They said EACJF, where the President of East African Court of Justice will also sit, will also help enhance judiciaries' contribution to regional and national development, protection of rule of law and promotion of East Africa citizens’ well-being. STRATEGIES “We urge EAC partner states to include the EACJF as an official actor in the EAC processes particularly on the administration of justice, make the EACJF engagements part of the calendar of EAC activities, and provide for regular and structured direct...

About 70 per cent of cargo imports may in a couple of months be declared on a centralised electronic tax system in a renewed bid to nab tax cheats at major border entry points. Treasury Principal Secretary Kamau Thugge says the lion’s share of the additional Sh4.3 billion to the taxman in the supplementary budget in April will be invested in enhancing its capacity to scan, carry out surveillance and track goods at the port of entry and those in transit. The KRA is looking to install more scanners at the Port of Mombasa and major airports to catch tax cheats and cut revenue leaks to unscrupulous traders. Presently, only about 40 per cent of the imports into the country are scanned through the modern centralised system, the PS said. “Some of the areas that have been covered is the rollout of customs management system to deal with concealment, under-invoicing and undervaluation of imports,” Dr Thugge said. “The aim is to increase the percentage of imports that are scanned from 40 per cent to 70 per cent shortly. (We are also targeting) regional electronic tracking system to avoid diversion of goods to Uganda and South Sudan.” The Scanner Integration Project, which is part of the ongoing rollout of Integrated Customs Management System (iCMS), connects all scanners at ports of entry to the Central Scanner Command and Control Centre at Times Tower, the KRA headquarters. The installation started last October, helping the customs officials at the command centre to monitor and...