Goldensilver Exporters, a green chilli exporting company has reported in the last three months a decrease in its volumes from 10 to four tonnes a week due to the drought that affected the harvest season in December. This has in turn led to air freight companies to prioritise other produce such as flowers, which are in high supply and demand, for export cargo space. Green chilli, which takes approximately three months to mature, was affected by the poor distribution of rainfall in October to December 2017, according to the National Drought Management Authority (NDMA). This has forced Goldensilver Exporters, which trades in European countries such as Germany, UK and France, to reduce the tonnage it sends to clients. “We export green chilli every week. One client can request for up to five tonnes. When we tell them that we are not able to meet that amount, some will look for an exporter that can fill the deficit while others will find an exporter that can provide them with the whole amount. Therefore we lose a client,” said Goldensilver Exporters CEO Eric Wachira. The demand for chilli from European countries has increased by 27 per cent from 37,000 tonnes in 2012 to 45,000 tonnes in 2016. Kenya is one of the medium to large suppliers of the produce to the European Union majorly Germany, the UK and France, according to the Centre for the Promotion of Imports from Developing Countries. In a bid to cope with the deficit, Goldensilver has moved...

Kenya Railways (KR) has inked a contract with a French container transportation and shipping company seeking to grow cargo volumes for the standard gauge railway(SGR) line. The year-long deal follows a meeting between the state agency’s top officials led by KR’s Managing Director Atanas Maina and the CMA-CGM team led by its East Africa boss Thierry Bidau. Under the agreement, CMA-CGM will directly nominate huge volumes of cargo to the Inland Container Depot, Nairobi via the standard gauge railway. CMA-CGM is also expected to influence the choice of other players yet to embrace the Madaraka Freight Service. CMA–CGM is the third largest shipping firm globally, going by the number of 20-foot equivalent units (TEUs) handled, operating a fleet of 504 vessels that call at 420 ports in 160 countries. Mr Maina was accompanied by Business and Commercial Expert on Freight Team Leader James Siele, Business and Commercial Expert on Freight Sammy Gachuhi and the Business Development Manager Milly Omido. The deal is among a raft of measures taken by KR to woo shipping lines and cargo importers to use the Madaraka Freight Service to transport cargo at subsidised fees. “It is a remarkable milestone for the corporation as it is the first one involving a shipping line. Previously, contracts have been between Kenya Railways and freight forwarders including one between KR and Cargo Care International that was signed in early this year,” said Mr Maina. While freight forwarders simply act as the link between shipping lines and shippers, shipping lines have...

Kenya has moved to seal loopholes in tax evasion and importation of substandard goods by directing that all consolidated cargo be inspected at the port of origin. In a joint statement Kenya Revenue Authority (KRA) and Kenya Bureau of Standards (Kebs) said this would help establish the real value of individual cargo to be verified by Kebs-licensed inspection agencies who will then submit a copy of a product’s Certificate of Inspection (CoI) via their online portals to KRA’s Simba system ahead of shipping. The notice issued last week, also directed clearance and forwarding firms involved in consolidation of cargo into single units for packing in containers to register with Kebs by April 20. “Consolidated cargo will only be managed by registered consolidators who will liase with Kebs-licensed cargo inspectors across the world to have goods audited at the port of origin before packing into containers. “No other inspection will be conducted upon arrival but handling of clearance via our online single window,” said Kebs Managing Director Charles Ongwae. Prior to the directive only single importer goods placed in a container were inspected at source under regulations that established three types of clearance schedules — Route A, B and C — where inspecting firms issued importers with a Pre-Export Verification of Conformity (PVoC). But Kebs-KRA directive on consolidated cargo will see a Certificate of Inspection(CoI) issued confirming that all goods are checked to confirm they are of high quality and conform to health, safety and environmental standards before they are packed...

Kenya Railways will next month hold a conference drawing together logistics experts and stakeholders in an attempt to address challenges facing the standard gauge railway freight train operations. Managing director Atanas Maina said the conference will seek to get views from players on how to address the problems. He said Kenya Railways (KR) is standardising operations with two key agencies involved in the clearance and handling of goods – the Kenya Ports Authority (KPA) and Kenya Revenue Authority (KRA). “We want to agree on all the standards of service and our combined operation processes,” the MD said, adding that they are already getting feedback from all players on how they will improve their services. The Kenya International Freight and Warehousing Association (Kifwa) Nairobi branch chairman William Ojonyo said they welcome the conference, noting that they have in the past called for dialogue over contentious issues related to the cargo trains. “We have always maintained that we want the project to work but there are some issues that must be addressed,” he said. The conference comes in the wake of teething problems in streamlining operations of the freight trains that started hauling goods from Mombasa port to the Nairobi Inland Container Depot (ICD) at Embakasi, Nairobi, in February. There have however been challenges in how goods are loaded on trains, especially regarding those that had not been designated for offloading at the ICD. The most serious challenge has emanated from returning empty containers to designated yards in the port city. Once...

China’s massive build programme to recreate trade routes stretching from Asia to Africa and Europe is gaining momentum. Since President Xi Jinping’s flagship Belt and Road project was announced about five years ago, it gave impetus to billions of dollars of Chinese investment — some of which were already in the pipeline for several years — to build railways, roads, ports and power plants. The programme isn’t without controversy: debt risk is rising, an influx of Chinese workers has fueled tension with locals, and there are worries about China’s dominance in the region. And not all of the projects have succeeded. “It’s been a mixed bag so far,” said Mr Michael Kugelman, a senior associate for South Asia at the Woodrow Wilson Center in Washington. “There have certainly been success stories, and there will be more of them too, but there have also been setbacks.” With many projects in various stages of developments, measuring the success and potential benefits can be tricky. Here’s a list of projects that analysts who track China’s Belt and Road investments say will provide the most economic impact to countries by unlocking trade routes: MYANMAR’S KYAUKPYU PIPELINE The US$1.5 billion (S$1.97 billion) oil pipeline that runs from Kyaukpyu to Kunming began operations last year, allowing crude supplies from the Middle East and Africa to reach China faster as shipments no longer need to be transported through the Straits of Malacca and the South China Sea. The pipeline is designed to carry 22 million tons of...

Kenya plans to start transporting crude oil from Turkana to the Port of Mombasa next month for export. Petroleum Secretary John Munyes says the government has already addressed security and logistical challenges that marred the first attempt last July to start exports under the Early Oil Pilot Scheme. Munyes has further said the construction of a crude oil pipeline from Lokichar to Lamu will start in the fourth quarter of this year. Last year, Kenya was hoping to join the league of crude oil exporters in the world, by trucking crude oil from Lokichar basin in Turkana to the Port of Mombasa for shipment to the international market. However, the plans jointly by the government and Tullow Oil flopped due to poor road network, security concerns and lack of a law on revenue sharing. Kenya plans to transport by road between 2,000 to 4,000 liters of the crude oil to the Changamwe storage facilities. CS Munyes has said the early oil pilot scheme will start in the next one month. Tullow Oil already has 70,000 barrels of crude stored in Lokichar in readiness for transportation to the Port of Mombasa by specialized lorries and has decried the delays in kick-starting the export programme. Early oil exports would be followed by commercial production and exports after the pipeline is completed in the year 2021. Munyes has also said the government will soon invite tenders for the exploration of crude oil and natural gas in Samburu County. French oil giant total SA...

Forty-four African leaders gathered in Kigali last month and signed a continental free-trade agreement (FTA). By so doing, they laid the foundation stone for the creation of an enormous free-trade area that will likely facilitate regional integration and inspire economic growth across the continent. Although I support this leap of faith, I am not too sure that the negotiations leading up to this treaty have exhausted all points of friction. Implementing the treaty will certainly require some nurturing of relationships and massive support from citizens of every African country. This is so because the FTA is a product of pronouncements from top leadership without details that matter in such agreements. This process first started in October 2008, when the East African Community (EAC), Southern African Development Community, and the Common Market for Eastern and Southern Africa (Comesa) held a summit that birthed the African Free Trade Zone (AFTZ). In 2012, it was extended to the Economic Community of West African States (Ecowas), the Economic Community of Central African States (ECCAS) and the Arab Maghreb Union (AMU). MASSIVE MARKET In June 2015, at the African Union summit in South Africa, negotiations started to create a Continental Free Trade Area (CFTA) with all 55 African Union states by 2017. A continental free-trade policy means there will be no restrictions on imports from, or exports to, any African country except for South Africa or Nigeria unless they accede at some point in the future. Nevertheless, even without these two giant states, FTA members...

The EAC Monetary Institute Bill, 2017 and the EAC Statistics Bureau Bill, 2017, are two key pieces of draft legislations on agenda as the East Africa Legislative Assembly (EALA) moves its sitting to Dodoma, Tanzania starting today, Monday. The regional House’s first ever sitting in Tanzania’s designate capital – which starts today Monday and ends on April 28 – is to be presided over by Speaker, Martin Ngoga, with Tanzanian President Dr John Pombe Joseph Magufuli expected to address the Assembly at a special sitting sometime next week. The two pieces of legislation are critical in the eventual set up of the East African Monetary Union (EAMU), the East African Community’s third pillar of integration preceding the ultimate phase – the EAC Political Federation. Partner States negotiated a Protocol for establishment of the EAMU which was signed by regional leaders in November 2013. The EAMU protocol provides for the establishment of four support institutions: the East African Monetary Institute – a precursor to the East African Central Bank – which was supposed to be set up by December 2015 but never happened, and the East African Statistics Bureau (2018), among others. In March, when MP Dr Pierre Celestin Rwigema (Rwanda) asked the Council of Ministers to inform the House about the status of implementation of the third and fourth pillars of the integration during the last sitting in Arusha, Tanzania, Dr Ali Kirunda Kivejinja, Chairperson of the Council of Ministers, said the EAC Secretariat – the executive organ of the...

Some 73 companies are on track for expedited payment of refunds and reduced customs security checks after they enrolled in an East African Community (EAC) programme to promote regulatory compliance, enhance trade and improve border security. The firms will reap other benefits of the programme, named Authorised Economic Operators (AEO), including automatic passing of their declarations and will undergo no physical examination of goods except where risks are high, among others. The incentives apply to multinationals as well as small and medium enterprises (SMEs) that have joined the programme. 73 companies Among private sector organisations to benefit from the AEO programme are Mitchel Cotts Freight, Mzuri Sweets Ltd and Umoja Rubber. "Seventy three companies have so far been enrolled in the programme since it was introduced over three years ago. The EAC targets to enrol over 500 companies in the next five years," said Duncan Karari, Communications Manager at German international development organisation GIZ which provides technical support for the initiative. GIZ is also supporting the EAC integration process and its development goals.Mr Karari said the programme is headed for roll-out. Regional customs The AEO initiative -- launched to reform regional customs services -- targets more than 500 companies, indicating that over 400 more are expected to join in due course. Under the scheme, firms involved in international trade are scrutinised and certified as AEO. The programme is open to all players including clearing agents, revenue authorities and standards bodies. The programme is expected to reduce the cost of doing...

African development hinges on a maddening paradox: its greatest asset—the sheer size and diversity of its landscape—is also the greatest barrier to its development. Landlocked countries are cut off from ports, and the difficulty of moving goods from country to country weighs down intra-continental trade (only 15% of African trade is within Africa. (African Development Bank, 2017) African consumers bear the brunt of these difficulties. [1]. Costs are driven up by a host of factors: tariffs, border delays, corruption. But the biggest challenge is that no streamlined transport route exists between West and East Africa – only a decaying and underdeveloped road and rail system which pushes up costs and drags down efficiency. Several ambitious schemes have been proposed to link Africa’s east and west coasts, some of which are closer to full realization than others. Most notable in this respect is a plan to expand the existing Trans-African Highway 5 (TAH5) into a true cross-continental road and rail link, the early stages of which China has helped bring to fruition where Western consortiums failed. Likewise, Chinese investment in African infrastructure through Beijing’s ambitious Belt and Road Initiative (BRI) may help create expanded sub-regional linkages, particularly in East Africa, that could help facilitate the emergence of an eventual, true East-West link in the long term. However, in the short-to-mid-term, the obstacles to a truly robust set of East-West transport links are formidable, and it is unlikely that China’s involvement will be a panacea. Long March to the Red Sea Portions...