Kenya could triple export revenues if the newly signed continental trade agreement is fully embraced. This will bring Sh1.53 trillion in revenues from trade, with the signing of the Africa Continental Free Trade Agreement, Kenya Association of Manufacturers has said. “Local manufacturers are open to the possibilities. Our exports are more than Sh510 billion and this can be tripled,” KAM chief executive Phyllis Wakiaga told the Star. Last month, President Uhuru Kenyatta joined 43 other African heads of state to sign a new trade agreement aimed at absolving tariff and non-tariff barriers that have hindered intra-Africa trade for  years. The trade pact includes Protocol on Trade in Goods, Protocol on Trade in Services and Protocol on Dispute Settlement. Signatory states will commit to absolving tariffs on 90 per cent of goods with 10 per cent of “sensitive items” to be phased out after further deliberations. It will also address licensing rules and quotas presented in non-tariff barriers. “If we want to develop through trade as a continent this is one of the issues we must address. We must abolish tariff and non-tariff barriers that hinder successful trading between our countries,” Wakiaga said. Kenya is already a member of COMESA free trade area as well as the EAC customs union where originating goods, which certify the rules of origin, are already being traded at zero tariffs. Trade PS Chris Kiptoo earlier told the Star that the country had already removed 37 per cent of total tariffs under the EAC Common External...

Creating sufficient capacity ahead of demand at the Mombasa port and proactive investment in expansion and upgrade of roads and rail linking the facility to hinterland will grow Kenya’s economy by at least two per cent. This is according to a new report by PricewaterhouseCoopers (PwC). The report says the increase in investment in the port and landside regional transport system will also redirect global cargo flows into East and Central Africa, attracting more giant shipping lines. Currently, container ships deployed to Mombasa are smaller compared to those handled by Durban in South Africa and ports in West Africa such as Lagos-Apapa and Abidjan. The capacity of container ships to East African Coast is 2900-5000 twenty foot equivalent units (TEUs) compared with West Africa where the average container capacity is 5,500 TEUs, peaking at 13,000 TEUs, according to the PwC’s report on port development in sub-Saharan Africa. “Ports that can accommodate larger vessels generally have a higher capacity than comparable ports that can only handle smaller vessels,” PwC says in the report titled Strengthening Africa’s Gateways to Trade, launched in Nairobi  on Thursday last week. “Even if ports can accommodate larger vessels, the quality of port equipment and operations needs to be sufficient to process a sufficient number of containers to make it economical for such ships to call at a port,” the report says. Mombasa port’s capacity rose to nearly 1.7 million TEUs from 1.08 million TEUs following completion of the first phase of the Sh30 billion second container...

A report on African ports released last week by global research firm PricewaterhouseCoopers (PwC) shows that Dar es Salaam and Djibouti may overtake Mombasa port as the regional hub. The report identified Durban (South Africa), Abidjan (Cote d’Ivoire) and Mombasa as the most likely to emerge as the major hubs in Southern Africa, West Africa and East Africa, respectively based on the degree of port centrality, the amount of trade passing through a port, and the size of the hinterland. It also established that the closest rivals for these ports, due to their better operational performance, are Lagos-Apapa (Nigeria) and Tema (Ghana) as alternatives to Abidjan, and Djibouti and to a lesser extent Dar es Salaam to Mombasa. “Djibouti poses much less of a threat to Mombasa due to the latter’s larger hinterland and operational efficiencies. If it was not for the close proximity of Dar es Salaam to Mombasa, it would have been a major contender to be an East African hub. Given their close proximity, it is unlikely that both Dar es Salaam and Mombasa will both emerge as hubs,” reported PwC. “Also due to Mombasa’s better hinterland connections and larger throughput, it is more likely to fulfil the role of a hub, with Dar es Salaam being a significant regional port.” Both Tanzania and Djibouti have recently embarked on major developments on their ports in a bid to improve their operational performances and position themselves as continental hubs. In July 2017, Tanzania announced that it had received...

NAIROBI — Cooperation between countries and the private sector will be key to the successful implementation of the Paris Agreement on climate change in African nations, panelists at Africa Climate Week held at the United Nations Office at Nairobi said. Africa is the most vulnerable continent to the impacts of climate change but accounts for the smallest share of global greenhouse gas emissions. In the face of climate change, the continent is threatened with extreme temperatures, droughts, and flash floods, which work to heighten food insecurity, experts say. The majority of African nations have signed and ratified the Paris Agreement. Under the agreement, countries have crafted Nationally Determined Contributions plans, which outline their strategies for cutting emissions and adapting to the impacts of climate change. The international community is expected to finalize the guidelines for how countries will implement the agreement at the end of this year at COP24, hosted in Poland. Article 6 of the agreement encourages cooperation in order for countries to achieve these strategic plans. During Africa Climate Week, various stakeholders, including African government representatives and the private sector met to discuss how they will go about integrating cooperation into these plans. This included ensuring strong policy frameworks and cooperation within African regions. “Carbon market mechanisms are the mechanisms for cooperation. They are the mechanisms for doing things together between countries, between businesses, between businesses and the government,” said Tomasz Chruszczow, COP24 special envoy for climate change, during the conversations. “This is the way to do more with less. This...

Fostering international development has long been viewed as central to the moral, humanitarian, strategic and security interests of the United States. In particular, there is one area where the United States has been a leader in development assistance — providing trade preferences to African countries, most of which are low-income countries. This has been achieved through the African Growth and Opportunity Act (AGOA), which was initially passed by U.S. Congress in 2000 and signed into law by President Bill Clinton. The legislation was deliberately renewed by both Presidents George W. Bush and Barack Obama. AGOA demonstrates the power of U.S. trade policy to bring about significant change in Africa through measures that, while trivial from the American perspective, can have a sizeable impact in Africa. Specifically, AGOA allows for eligible African countries to export a long list of goods to the United States without paying the import tariffs that most countries must pay and without being subject to import quota restrictions. The beauty of AGOA lies in the fact that it costs the U.S. very little to implement in terms of lost tariff revenue and lost market share. In fact, it’s fair to say that the implementation of AGOA has had zero impact on the U.S. economy, and close to zero in terms of American tariff revenues. At the same time, however, AGOA has resulted in an increase in exports in some key products that have been massive when measured by African standards. For example, apparel exports, which have historically...

TradeMark Africa (TMA) and the Northern Corridor Transit and Transport Coordination Authority (NCTTCA) yesterday signed a financing agreement worth US$ 1.05 million.TMA will disburse the money to the NCTTFA secretariat over a 3-year period (2018 – 2021). Funding will enable the agency to collect and analyse data related to transport of goods and persons along the transport corridor, therefore informing decision making The Northern Corridor is East Africa’s main transport corridor that begins at the port of Mombasa with two routes; one through Uganda to South Sudan and other through Uganda, to Rwanda, Burundi to DR Congo. NCTTCA member countries include Kenya, Uganda, Rwanda, Burundi, South Sudan and Democratic republic of Congo. NCTTCA oversees the corridor monitoring framework known as Northern Corridor Transport Observatory, which is a performance monitoring tool that informs interventions geared towards reducing costs and delays of transportation and other related logistic a, challenges. With the new financing, the Authority will improve monitoring of the Northern Corridor performance with regards to movement of people and goods. It will adopt modern technologies, including mobile based and online systems, to enhance its capability to monitor trade and transport flows, bottlenecks and impact of interventions. Data collected will support evidence-based advocacy and decision making. This initiative will complement monitoring the implementation of the Mombasa Port Charter. TradeMark was represented by Country Director for Kenya, Ahmed Farah, while NCTTCA was represented by Ag. Executive Secretary Fred Tumwebaze. NCTTCA collects data from over 20 stakeholders in all the member countries with the...

NAIROBI, KENYA: President Uhuru Kenyatta kicked off the program for his five-day visit to the UK by presiding over the opening ceremony of the London Stock Exchange. Speaking after the ceremony, President Kenyatta urged UK investors to increase their investments in Kenya. The UK is a leading investor in Kenya with at least 220 British companies operating in Kenya running business valued at more than 2.7 Sterling Pounds. President Kenyatta, who was joined by the Secretary State for International Development (DfID) Penny Mordaunt and the Chairman of the London Stock Exchange Group Donald Brydon, said Kenya is open for business and offers the best investment opportunity in Africa. “Kenya has just recorded the best improvement in ease of doing business. We are inviting more UK companies to invest in Kenya,” said the President. “Kenya is the third most competitive country in Africa with a liberalised economy.” He said the business environment in Kenya is supported by a strong telecommunication network, a reformed regulatory framework and an efficient aviation network. The President said London is a strong partner for Kenya’s economy and this was evident when Kenya’s sovereign bond was oversubscribed by more than 7 times a few months. “The United Kingdom continues to be a valuable economic partner in Kenya’s socio-economic policies,” said the President. The President, who was accompanied by Trade and Industry CS Adan Mohamed and Foreign Affairs CS Monica Juma said the London Stock Exchange and the Nairobi Securities Exchange have entered into an agreement for dual...

Regional tea exports at the Mombasa Auction have increased, according to the East African Tea Export Auctions report released last week. All the five East Africa member states including Kenya, Uganda, Rwanda, Burundi, Tanzania and Mozambique registered an increase in exports at the Tea Auction held between April 9 and April 10. The increase, the report says, was occasioned by growth in demand and a rise in crop production. According to the report more than 7.4 million kilogramme bags were sold up from 6.4 million bags sold around the same time last year. This indicates an increase of 8.2 per cent. The five East African member states including Mozambique participated in the auction out of the 10 countries listed at the auction. The other countries, including DR Congo, Malawi, Madagascar and Ethiopia registered no trade. George William Ssekitooleko, the Uganda Tea Association executive secretary, said last week the rains have facilitated growth in crop yield across the region. However, despite an increase in supply prices increased to $1.6 (Shs5,808) up from $1.3 (Shs4,700) per kilogramme. Ignatius Byarugaba, the Uganda Tea Development Agency chief executive officer, said last week prices have been stable in the last three-years and a slight increase would be good news to the market. According to the report Kenya exported 5.7 million kilogrammes bags compared to 5.4 million it exported last year. Uganda, the region's second largest exporter sold 839,824 kilogramme bags up from 747,003 kilogrammes bags exported in the same month last year. EA tea exports...

The Standard Gauge Railway freight service received a major boost after the largest container shipping line ran two full block trains from Mombasa to Nairobi Inland Container Depot. This was the first time the SGR freight train was carrying cargo exclusive to a shipping line. The whole consignment belongs to clients who had nominated the Nairobi ICD as their final destination. The two trains, with 108 exclusive Maersk Cargo each, left Mombasa at 2:00pm and 4:00pm respectively, destined for Nairobi. Kenya Railways business, commercial and operations team leader James Siele said the cargo was being offloaded straight from the ship and loaded directly on SGR freight trains. “This saves time and we expect the first train to reach Nairobi before the ship sets sail from the port,” said Siele. He said Kenya Railways is now transporting daily freights and plans to increase to five trains. “We are now doing four trains that transport 432 containers daily. Next month we will increase to five trains,” he said. KPA general manager operations Captain William Ruto said the offloading of cargo straight from the ship to the SGR train shows improved efficiency in cargo handling. “The containers are being offloaded directly from the ship and loaded straight on the cargo train in what has proved to be advantageous in terms of saving time and cost,” said Ruto. He said KPA, working with KRC and Kenya Railways to ensure smooth flow of cargo. The national assembly committee on transport will follow up on the...

African governments need to recognise ports as facilitators of trade and growth instead of focusing on extracting revenue from them according to a new report from PricewaterhouseCoopers (PwC). PwC asserted that contrastingly to China, in sub-Saharan Africa (SSA) “the business case for port expansion is often only defined once capacity is already constrained and thus many ports operate under severe pressure while investment decisions are being made”. This continual lag, which often lasts years, reduces competiveness and takes no account of the resulting reduced trade impact on African economies, it added. A 25% improvement in port performance in SSA could increase GDP in the region by 2%, its analysis found. Growing congestion in many African ports means that the continent runs the risk of sacrificing further growth through a lack of investment in port terminal infrastructure, it noted. Access to effective ports and interconnecting infrastructure would lead to reduced costs and improved overall freight logistics efficiency and reliability according to the ‘Big 4’ auditor. According to its estimates, US$2.2bn per annum could be saved in logistics costs if the average throughput at the major ports in SSA doubled. Andrew Shaw, PwC Africa transport and logistics leader, said: “The global transportation and logistics industry can no longer afford to ignore developments in Africa. “Efficient ports can make countries and regions more competitive and thus improve their growth prospects,” he added. “The reliability and efficiency of each port terminal, including minimising delay to shippers, is critical to enhancing future trade facilitation.” The report observed that currently...