MOMBASA, KENYA; Kenya Revenue Authority (KRA) and Kenya Ports Authority (KPA) are engaged in a blame game over the theft of 124 containers at the Mombasa port in 2016. So far, 31 employees from the two State organisations have been charged with causing colossal losses to the exchequer by allowing the containers to leave the port without paying taxes. Early last week, State witnesses testified that retired employees' user accounts and passwords from the information and security departments at KPA were hijacked and used to release cargo without paying duty. Apparently, these accounts remained active even after the employees left the organisation. On Friday, a KRA investigation officer admitted that there could have been collusion between KRA and KPA in the theft of containers that cost the Government more than Sh106 million in unpaid customs duty. Dunstun Majanja, who doubles up as a lawyer for KRA, told Senior Resident Magistrate Francis Kyambia that there was a compromise in the KPA Simba System but could not identify who was responsible. “I can only speculate that there was a compromise at KPA and KRA,” said Mr Majanja, adding that he did not follow up how it happened. During cross-examination by defence lawyers William Mogaka, Michael Oloo, Jared Magolo, Kevin Amani, Boaz Adalla and a Mr Gitonga, Majanja admitted that KRA and KPA often shared information of containers planned for clearance from the port. Manually intervened “There was a compromise in the KPA Simba System because someone had manually intervened by inputting 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...

Lusaka – Calls for regional integration and boosting of economic growth in Africa will remain unanswered unless all countries strive to fulfil agreements to the letter unlike piece-meal legislation, a leading economist has noted.  In recent years, several African economic blocs – the Common Market for Eastern and Southern Africa (Comesa), East African Community (EAC) and Southern African Development Community (SADC) ‑ have signed and adopted various agreements relating to trade but a few, or none, have been ratified and operationalised. Key among the trade agreements that have been signed and not ratified are the Comesa Free Trade Area (FTA) and the recently signed Continental Free Trade Area (CFTA) in which 44 African countries signed various agreements during the just-ended AU Summit in Rwanda but remain to be ratified. Sindiso Ngwenya, the Comesa Secretary-General, noted that while there has been a zeal to append signatures on various trade treaties, the majority of agreements still remain on the shelves, unratified to make them fully operational and bolster intra-trade growth in the 54 member states. In an interview with The Southern Times in Lusaka, Ngwenya, the outgoing chief administrator of 25-year-old Comesa, noted that while there has been increasing zeal for countries in various groupings to sign agreements and necessitate their operationalisation, many have remained on the drawing board, incomplete because they are not ratified to the letter. Twenty-two countries out of 26 signed the COMESA-EAC-SADC Tripartite Free Trade Area (TFTA) Agreement, Botswana being the latest signatory to the agreement, after signing...

Africa’s textile industry may be caught in the crosshairs of US president Donald Trump’s global trade war. In reaction to Rwanda raising tariffs on used clothing and footwear from the US, the Trump administration says it will suspend duty-free privileges on eligible Rwandan clothing—a benefit of the African Growth and Opportunity Act (AGOA)— within 60 days. US Trade Representative’s office says a suspension rather than a termination of the benefits will “allow for continued engagement with the aim of restoring market access.” Other East African countries, including Tanzania and Uganda, have been spared a similar fate as, according to the trade office, both countries have “committed not to phase in a ban” for second-hand products. Last year, Kenya also backtracked on the 2016 decision from the East Africa community nations to ban used clothing by 2019. The move is an extension of Trump’s “America First” stance seen in the ongoing tariff battle between the US and China. But the Trump administration is being lobbied by the Secondary Materials and Recycled Textiles Association, which says a ban will lead to the loss of 40,000 US jobs and negatively impact the environment with pounds of textile waste ending up in landfills. For its part, Rwanda says the withdrawal of its AGOA benefits are “at the discretion of the United States” and has given no indication of reversing the tariff hike on used clothes from the US. The looming threat of a withdrawal of AGOA benefits is fueling pending conversations about the second-hand...

Kenya has blamed the delay in starting work on a key road linking the port of Mombasa to Tanga on change in design from single to dual carriage along a section of the transnational highway. The African Development Bank (AfDB), the principal financier of the 445-kilometre project, said last week Nairobi was slow in completing preliminary studies such as road designs to pave the way for construction. The road running from Malindi to Bagamoyo — formerly a key trading port in north-eastern Tanzania during colonial times – will cost an estimated $751.3 million (Sh75.93 billion). AfDB will fund about 70 per cent of the project, with the two countries covering 30 per cent of the total cost in their respective territories. Work on the mega project that is expected to take 36 months has been delayed since 2016. It was expected to start this year, but may be delayed further to next year. The connection of Mombasa to Tanga – Tanzania’s second largest port – is expected to unlock trade, tourism and shipping opportunities between the two countries, which have over the years had on-and-off trade disputes. Transport and Infrastructure secretary James Macharia said the new designs will ensure the stretch from Mtwapa to Nyali in Mombasa, including the Mtwapa Bridge, is expanded into a dual and not a single carriage as in the previous designs. “We had to change the designs to make sure we do not have a bottleneck at Nyali-Mtwapa area because the traffic there is a...

Twenty years ago, I hoped for an Africa that would draw closer and forge forward boldly, despite a bag of mixed fortunes. Rwanda had just been blighted by genocide; the ubiquitous coup d’état still reared its ugly head in West Africa; although a tentative calm prevailed in Central Africa, political tensions simmered below the surface; Zaïre was in the throes of the ‘first Congo war’; the civil war in Somalia grew in magnitude and intensity; Ethiopia began an experiment in state-led macroeconomic planning; a democratic South Africa rose from the ashes of Apartheid, a veritable validation of the OAU’s ultimate goal of political liberation for Africa. An interim period of positive change ensued, a growth fuelled by new media including the Internet, greater multiculturalism and a stronger attachment to democratic principles. In March 2018, 44 of the 55 African Union Heads of State and Government enacted the African Continental Free Trade Area agreement (CFTA) in Kigali, Rwanda at its 10th Extraordinary Session, under the able leadership of H.E. President Mahamadou Issoufou of Niger, with H.E. President Paul Kagame of Rwanda as current AU Chairperson and H.E. Moussa Faki Mahamat, Chairperson of the AU Commission. Once in force CFTA will be the largest trade zone in the world, increase intra-African trade by 52% by the year 2022, remove tariffs on 90% of goods, liberalise services and tackle other barriers to intra-African trade, such as long delays at border posts. The end of colonialism in the early 1960s created 55 African countries...

Kenya will not raise its value added tax (VAT) to match the uniform rate for the rest of the countries in the East African Community (EAC), the Treasury has said, offering relief to households and businesses. Treasury Principal Secretary Kamau Thugge on Tuesday said Kenya’s VAT on consumer goods would remain at 16 per cent despite calls to align the rate with the rest of the trading bloc’s members such as Tanzania and Uganda, which charge 18 per cent. There has been growing concern that different rates at which member countries levy domestic taxes is distorting the EAC common market. The Treasury’s decision to retain the current VAT rate has spared consumers an increase in the cost of commodities such as electricity, milk, newspapers, textbooks, fertilisers, alcohol, cigarettes, mobile phone handsets and airtime. Global institutions, including the Washington-based Institute of International Finance (IIF) had tipped the Treasury to raise VAT to 18 per cent as a way of boosting revenues and arrest fiscal deficits that have seen the State take on huge loans. Narrowing deficits The institute reckons that the increase would be in line with the Treasury’s quest to honour its commitment to the International Monetary Fund (IMF) in narrowing deficits. Kenya pledged to slash budget deficits through spending cutbacks and raise tax receipts in exchange for a six-month extension of a Sh150 billion ($1.5 billion) stand-by credit facility from the IMF that was due to expire last month. “Improving the VAT’s collection to five per cent of GDP...

NAIROBI, April 4 (Xinhua) -- East Africa's bloc on Wednesday lauded Kenya for being one of the first countries to approve the framework establishing the African Continental Free Trade Area (AfCFTA) which will create a single market for goods and services in the continent. The Inter-Governmental Authority on Development (IGAD) said the quick approval of the bill to ratify the AfCFTA demonstrates the strong political will of the Kenyan government to strengthen inter-African linkages on trade through the elimination of trade barriers to foster a liberalized single continental market. "The IGAD Secretariat also welcomes the signature of the African Continental Free Trade Area by all Member States of IGAD - Djibouti, Ethiopia, Somalia, South Sudan, Sudan and Uganda - and will endeavor together with the African Union to work alongside its Members States to facilitate efforts to enhance free trade within its respective region and across the continent," the bloc said in a statement. All the East African countries except Burundi which did not attend the Summit on March 21 in Rwanda signed all the three protocols. Only 22 member countries were required to sign the agreement to make the AfCFTA treaty operational. According to the Africa Union, AfCFTA aims to establish a single liberalized market that will spur industrialization, infrastructural development, economic diversification and trade across the continent that is home to some 1.2 billion people. IGAD said the trade pact which requires ratification by 22 countries before entering into force seeks to increase intra-African trade by 52 percent,...

The African Union recently announced the creation of a Continental Free Trade Area in Kigali, in what has been termed a historic event. The heads of 44 African nations signed the bill establishing the Free Trade Area, immediately fast-tracking Africa’s economy by 50 years. However, there is still some more work to be done for the African trade area to be ‘modern’. Other than the fact that intra-African trade is the lowest among its ilk in the world at 11 percent (which was a reason for the creation of the Free Trade Area),  the Continental Free trade area also needs to be digitized. In a world of high-speed internet, emerging technologies and economies, digital networks and data flows, and the traditional boundaries regarding trade will no longer suffice. Ventures Africa spoke to Microsoft’s Director for Corporate Affairs in Africa Mr. Louis Otieno last week on the sidelines of the Africa CEO Forum in Abidjan, Ivory Coast. He says Africa needs to digitize its Free Trade Area to enable it to incorporate at scale. “Digital data flows is what defines the economic area as opposed to traditional boundaries,” he said. “For Africa to complete globally with the likes of China, we have to incorporate at scale. We have a billion people, which makes us a viable market today, with the youngest billion people, which makes us a viable market tomorrow.” His solution to digitizing the CFTA is for African governments to initiate policies that would make it easier for data flows...

Sugar imports in January dropped 72 per cent from last year as the regulator moved to control quantities allowed into the country. A market report by the Sugar Directorate indicates the volume of sugar imported dropped to 9,907 tonnes in the period under review from 35,170 in a similar period last year. The consignment comprised 1,900 tonnes of refined sugar while the bulk of cargo was 8,007 tonnes of industrial sugar. “Total sugar imports in February 2018 were 9,907 tonnes compared with 35,170 tonnes imported in the same period last year, a decrease of 72 per cent,” says the Sugar Directorate in a report. Last week, the directorate said it had subsequently cut the volumes of the sweetener imported to an average of 7,000 tonnes a month from previous highs of 29,000 tonnes to protect local millers who are grappling with huge volumes. “We are regulating the imports to ensure that the volumes we license in a month are manageable so that we do not affect the local millers,” said Solomon Odera, head of the Directorate. Normally, Kenya is allowed to import 350,000 tonnes annually from the Common Market for Eastern and Southern Africa (Comesa), which is spread across the year to about 30,000 tonnes monthly. The country imported over 900,000 tonnes of sugar between May and December last year as Kenya opened a duty-free window to allow traders to ship in the commodity outside Comesa. The directorate says the number of traders seeking import permit has gone down in...