Water transport investors in Lake Victoria are banking on the planned construction of the Standard Gauge Railway line to Kisumu to grow. Mbita Ferry Ltd, the biggest investor in lake transport vessels in the region, is focusing on handling cargo and increasing its presence in passenger transport. The company, which began its operations in 2001, has 11 vessels operating in Kenyan waters and two vessels in Tanzania. The ferry in Kenyan waters plies routes such as Mbita Town in Homa Bay County to Luanda Kotieno in Siaya County, and other islands around Mfangano main Island. Those operating in Tanzania named MV Alestus and MV Tilapiia ply between Mwanza and Bukoba ports respectively. Mbita Ferry Managing Director James Orege said the company has been specialising in handling cargo and passengers but is eyeing heavy cargo. “We are currently strategising on how to increase our cargo handling capacity following the move by the government to extend the Standard Gauge Railway to Kisumu,” said Mr Orege. The MV Mbitta that plies the Mbita Town to Lwanda Kotieno route in Siaya County can carry up to 500 tonnes.  It charges adults Sh150 and children Sh50 to cross from the Mbita to Luanda Kotieno. The ferry can carry up to 20 motor vehicles.  A car is charged Sh930 while a lorry is charged Sh2,320. The manager said motorists who do not want to be inconvenienced by road traffic often resort to the ferry to reach their destination. “Most of our customers crossing the lake with their motor vehicles do so because it is cost-effective and save...

The cost of transporting empty containers back to designated shipping lines yards in Mombasa is watering down the gains for importers using the Standard Gauge Railway (SGR) subsidised freight rates. Currently, there are more than 400 empty containers lying at the Nairobi Inland Container Depot (ICD) awaiting transportation to yards in Mombasa, with importers bearing the costs, according to clearing and forwarding agents. The containers were railed to the ICD without being nominated to the facility. As a rule, importers have to declare in the import documents where they want their cargo to be offloaded. The The Kenya Ports Authority (KPA) General Manager, Operations and Harbour Master, William Ruto on Tuesday said the number of 20-foot containers were 289 while the 40-foot ones were 141. He however said the initial confusion that arose after goods were railed to the ICD were being addressed and the yard had been reorganised. “We have already deployed 10 people to assist in the organisation of the yard and clearing agents are now able to locate their containers,” Mr Ruto said, adding that they expected the equipment to be transported to Mombasa by Tuesday. Return of the empty containers is being complicated by the fact that the SGR trains are not able to transport the goods to the final destination, forcing the importers to use road transport for the last mile transport. However, the Kenya Railways (KR) has negotiated with shipping lines on the return of the containers to Mombasa, although the logistics have not...

Kenya Airways is staring at a possible loss of its regional market share following the planned revival of national carriers in Uganda, Tanzania and Zambia. Kenya Airways, popularly known by the code KQ, has been enjoying a big presence in these countries capitalising on lack of national airlines. Air Tanzania is welcoming a new aircraft- Bombardier Q-400, which is the third since President John Magufuli rose to power, in an effort to revive the ailing airline. The airline has also lined up three more jet aircraft, including two Bombardier C300s and one Boeing 787-8 Dreamliner to arrive in the country before the end of this year. Uganda is also in the process of reviving its national airline before the end of the year after the cabinet approved the plan. This will cut the 15 years dominance that KQ has been enjoying at Entebbe which might result in revenue loss as Uganda seeks to claw back regional routes to kick-start an ambitious global outreach. Kenya’s Transport Principal Secretary Paul Maringa, however, says the move will not affect KQ’s earnings as part of the efforts to revive the local airline are aimed at making it competitive in the regional market. “There will be increased competition obviously, but this does not mean it will affect the operations of KQ. We are banking our strength on the services that we offer, which will keep us going even in the presence of stiff competition,” said the PS. Prof Maringa said there is nothing wrong with...

Cross-border traders are blaming Customs officials for harassment, high taxes, and inspection of their products by the customs authorities at the border points. According to the traders, the officials lack information on the Customs Union and the Common Market Protocol. The traders were speaking at the recently concluded 20-year anniversary celebrations of the East African Business Council in Nairobi. “Most of these officers do not understand what the Common Market Protocol entails. You will be charged taxes at the border on every product even when you try to explain that you are East African and it is not right,” said Charity Githinji, the managing director of Tandaza Tanzania Ltd. She said that although the one stop border posts have helped ease the cost and time of doing business, not all the Customs officers understand how they work. “If, for example, I am crossing the border from Tanzania to Kenya, I am subjected to checks on both sides instead of just one side,” said Ms Githinji. She cited the single tourist visa as one of the boosts for business in the region, even though only Kenya, Uganda and Rwanda have signed it. Hajjat Nakasujja, the chief executive of Aloesha Organic Natural Health Products, said there was a need to sensitise Customs officials on what free trade under the EAC entails. “New rules, regulations and agreements are passed but the information does not reach the border officials. This is where the challenge is,” said Ms Nakasujja. EABC chairman, Jim Kabeho recommended implementation of...

East Africa's largest economies, Ethiopia and Kenya, are among Africa’s top investment destinations. In its 2018 Africa Investment Index, Quantum Global Research Lab — Quantum Global’s independent research arm — ranked Ethiopia and Kenya at positions seven and nine, up from 21 and 15 respectively, the previous year. Ethiopia improved largely due to the country’s strong economic growth, averaging 8.4 per cent over the past three years. It was fuelled by significant investments in public infrastructure. This year, the World Bank estimates that Ethiopia will remain one of the fastest growing economies, but will slow down to 8.2 per cent from the 8.3 per cent forecast for 2017, as the country moves to stabilise public debt, which now exceeds 50 per cent of GDP. The index assesses a country’s business environment, liquidity, risk, growth, social capital and demographic factors to “paint a picture of the investment attractiveness of countries in the medium term.” Despite its protracted 2017 election, Kenya rode on a slight improvement in the ease of doing business, its relatively large economy and strong demographic factors to make it to the top 10 list, while Uganda slipped from position 12 to 17. “Kenya’s elections are a known factor and investors have developed an inbuilt tolerance. Kenya remains a free market economy, a transit state to the wider region,” said Aly Khan Satchu, CEO of Rich Management. The top five African investment destinations were Morocco, Egypt, Algeria, Botswana and Cote D’Ivore. Together, they attracted $12.8 billion in foreign direct...

March 21 in Kigali, Rwanda, saw African leaders launch the biggest free trade agreement since the establishment of the Geneva-based World Trade Organization 23 years ago. The African Continental Free Trade Area is a culmination of an agreement reached in 2012 and the intense negotiations of African heads of government that started in earnest in 2015. Initially the accord was to be signed by 55 member states. Only 44 signed the document after Nigeria, Africa's biggest economy, absconded. Whichever way you look at it, Rwanda's President Paul Kagame, also the African Union chairman, rightly put it: "Some horses decided to drink the water. Others have excuses and they end up dying of thirst." The new free trade area brings together an estimated 1.2 billion people with a combined gross domestic product of more than $2 trillion. The draft agreement commits countries to removing tariffs on 90 percent of goods, with 10 percent of what they referred to as "sensitive items" to be phased in later. Crucially, the covenant liberalizes services and aims to address the perpetual problem of non-tariff barriers, which have become the biggest headache in intra-African trade. Such barriers come in the form of government laws, regulations, policies, conditions, restrictions or specific requirements or prohibitions that protect domestic industries from foreign competition. Once the bottlenecks are done away with, African states look forward to a situation where there will be free movement of labor and the establishment of a single currency like the eurozone monetary union of 19...

Delta Air Lines has said it added a second non-stop route from Lagos to the United States (U.S.), with the aim of boosting trade and commerce between both nations put at $9 billion as at 2016. The airline also affirmed that the move came as Nigeria opens up greater investment opportunities, as well as to provide business travellers more opportunities to reunite with families and friends.Records have shown that the U.S. is Nigeria’s largest foreign investor and the airline carried more than 89,000 passengers between Lagos and the country in 2017, while the new strategy is expected to increase the indices. Unveiling the new commercial schedules to newsmen last week, in Lagos, alongside the Commercial Director, West and East Africa, Bobby Bryan, the company’s Senior Vice President, Europe, Middle East, Africa and India, Corneel Koster, said the Lagos to New York-JFK route is planned to connect both financial headquarters. Launched on March 25, 2018, as the first ever direct operations on the route, he disclosed that the flights depart Lagos at 11.30p.m (23:30hrs) on Tuesday, Thursday and Sunday to arrive New York-JFK at 5.30a.m (05:30hrs), while in-bound flights arrive Lagos Monday, Wednesday and Saturday. According to Koster, the new arrangement will afford customers flying to Delta’s New York-JFK hub the benefit of over 20 connections across the U.S. to destinations including Washington D.C., Baltimore and Chicago, while also complementing the existing Lagos-Atlanta route with more travel options to and from the U.S. “With the U.S. the largest foreign investor in...

Kenyan farmers stand to earn more if the government scraps the Mombasa tea auction and replace it with a blending and packaging facility that exports finished products to the international market. Already Dubai, which does not produce any tea, has established the Dubai Tea Trading Centre (DTTC), which has become an important intermediary between production and consumption. The facility combines warehousing, blending and packaging to provide the most complete and convenient solution for traders looking to maintain a stock capable of meeting the requirements of importers in the Middle East and the international market. Domiciled at the Dubai Multi Commodities Centre (DMCC), a free trade zone, the facility currently processes teas from 13 different countries. According to Sunitha Murthy, customer relations manager at DTTC, at a fee, the multipurpose infrastructure offers the importers of teas from different countries limited free storage for limited periods, access to a tea blending unit, tea bag and loose tea packing facilities, tea tasting and in-house expertise and networking opportunities. “Our members include tea producers, exporters, regional importers and international merchants, all attracted by our exclusive range of services, industrial clustering and the broad opportunities of our dynamic trade ecosystem and community,” she told People Daily. While Sunitha did not give the volume of raw tea imported from Kenya to the facility by different traders for blending because of customer confidentiality, she acknowledged that most of the tea at the facility is sourced from Kenya, India and Sri Lanka. Last year, over five million kilogrammes...

The East African Community (EAC) stands to benefit from the recently unveiled African free trade area if it consolidates its internal market, according to the East African Business Council (EABC). “Failure to remove trade impediments means that our bloc will remain weakened,” EABC executive director Lillian Awinja said last week. She told regional press that the African Continental Free Trade Area (CFTA) unveiled in Kigali last week could pull some EAC states into the new pact at the expense of their trade relations. “This means the benefits going elsewhere...to the rest of African market instead of our internal market,” she said on the sidelines of a regional workshop on trade between EAC and the outside world. CFTA was launched by leaders of the African Union (AU) member states in Kigali on March 21, and the continental body hopes that it will be the world’s largest single market with a cumulative GDP of $3.4 trillion. Leaders from some 44 African countries out of 55 signed up for the trade deal while more others committed to the deal through assenting to the Kigali Declaration. The milestone agreement is seen as a key part of AU’s long-term development plan, Agenda 2063, which calls for easing of trade and travel across the continent. The pact came in the wake of advanced talks on a tripartite trade area comprising the EAC, Common Market for Eastern and Southern Africa (Comesa) and South African Development Community (Sadc), constituting more than 60 per cent of Africa’s GDP and...

A free trade agreement across Africa is "great in principle," Matthew Parks, parliamentary deputy co-ordinator for the Congress of South African Trade Unions (COSATU), told CNBC via telephone Tuesday. COSATU represents more than 2 million workers in South Africa. Attending a summit in Kigali, Rwanda, last week, South Africa's President Cyril Ramaphosa did not immediately sign the African Union's proposed free trade agreement. The agreement posits a free trade area between its 55 member states. Safeguarding jobs and cheap Chinese goods flooding the market are hurdles the South African government must clear before it signs up to a pan-African free trade agreement, the country's largest trade union group told CNBC. A free trade agreement across Africa is "great in principle," Matthew Parks, parliamentary deputy co-ordinator for the Congress of South African Trade Unions (COSATU), told CNBC via telephone Tuesday. COSATU represents more than 2 million workers in South Africa. But, "we need to see some kind of plan," he added. Attending a summit in Kigali, Rwanda, last week, South Africa's President Cyril Ramaphosa did not immediately sign the African Union's proposed free trade agreement, which posits a free trade area between its 55 member states. Ramaphosa instead signed the Kigali Declaration, a precursor to the deal. "We are part of this process of opening up Africa for trade. All that is holding us back from signing the actual agreement is our own consultation process," Ramaphosa was quoted as saying by South African broadcaster eNCA. Forty-four African nations signed on to...