International trade has grown rapidly in recent years, thanks to the progressive reduction of tariffs and quotas through multilateral trade liberalisation. More trade means more goods crossing borders and having to comply with Customs formalities. Businesses suffer both direct border-related costs, such as expenses related to supplying information and documents to the relevant authority, and indirect costs, such as those arising from procedural delays, lost business opportunities and lack of predictability in the regulations. Surveys aimed at calculating these costs suggest that they may range from 2 per cent to 15 per cent of the value of traded goods in developed countries and upto between 30 per cent and 42 per cent in production costs in developing countries. Inefficient border procedures cost governments in terms of lost revenue, smuggling and difficulties in implementing trade policy, for instance because of difficulties in determining the origin of products or in collecting accurate statistics. With increasing integration of economies around the world, facilitating the smooth flow of trade becomes a pressing requirement for governments and businesses. Efficient information systems and procedures can significantly reduce the time taken to move goods, reduce costs and improve business. In Kenya, trade facilitation is carried out by a number of institutions. The roles of the trade facilitating agencies range from revenue collection, provision of services for cargo movement and ensuring that goods conform to the set standards and health regulations, efficiency and enhance the overall economic performance of a country. The overall objective of the Kenya Electronic...

The gap between exports and imports widened in the year to May as Kenya bought more goods from abroad to further expose the local currency. According to newly released Treasury data, the gap — also called the current account deficit — increased by 22.7 per cent to Sh623.2 billion (or $5.99 billion). This amounted to an actual expansion of the deficit by Sh115.4 billion (or $1.11 billion). The deficit has eroded the value of the shilling, which has fallen a notch lower every month this year, meaning it is 13.5 per cent weaker compared to the beginning of the year. This happened as the current account deficit progressively deteriorated. “The current account deficit worsened by 22.7 per cent to $5.992 billion in the year to May 2015 from a deficit of $4.882 billion in the year to May 2014,” said the Treasury. It added that as “a share to GDP, current account deficit amounted to 9.8 per cent from 8.9 per cent over the same period”. The export-import gap was caused by falling export values affecting crops such as tea, re-exports and manufactured goods. The data shows value of exported tea fell by 4.6 per cent or Sh5.3 billion ($51 million) in the period to stand at Sh110.4 billion. The value of manufactured goods also slumped by 22 per cent or Sh15.5 billion ($149 million) in the same period to hit Sh54.9 billion ($528 million). The value of chemicals and related products that were exported also fell by Sh3.6 billion...

KENYA is ready to host the World Trade Organisation's Ministerial Conference and there are no difference in government over the meeting. Foreign Affairs and International Trade Cabinet Secretary Amina Mohammed has reassured that all is set for the four-day conference from December 15 to 18. Kenya has set up the National Negotiations Committee to help Kenya
reach trade deals during the December conference, said Mohammed, who has been
chosen the chair of the meeting, branded MC10 Nairobi
2015. She said the negotiations are expected to end negotiations before
November, paving way for a common position with increasing global market access for agricultural produce a key priority. As of last year, intra trade among EU nations stood at 60 per cent, in Asia
its 40 per cent and the Americas is 20 per cent while in Africa it is a mere 6 per cent. Priority for Kenya during the conference is
ensuring that Kenya gets wider market access for its agricultural
produce such as tea, coffee, and horticulture. Kenya will also be pushing for liberalisation of
services which will allow for the free movement of professionals
across borders. Mohammed said her ministry is leading the preparations and all logistics are in place. "There are no differences between my ministry and any other. This is an important meeting for Kenya to host and we are prepared," she said. She added the meeting was important for Kenya's trade and tourism and should be supported by everyone who wants to see progress in the growth and development of the country. "My ministry has...

AS Tanzania, Burundi, Kenya, Uganda and Rwanda head towards a joint monetary union, experts are of the view that it is high time the East African Community member states drop their individual procurement acts and adopt a single procedure. The view was among the considerations raised during the ongoing eighth East African Procurement Forum here, hosted by the Public Procurement Regulatory Authority (PPRA) and officially opened by Vice-President, Dr Mohamed Gharib Bilal. “Our community has already gone through the first three stages of integration including the Customs Union, Common Market Protocol and the ongoing monetary union process; but in order to make this effective, there is an important component left; the harmonisation of procurement procedures and Acts,” said the PPRA Chief Executive Officer, Dr Laurent Shirima. Dr Shirima explained that before the end of the three-day session, the meeting would have deliberated on a number of issues and policies towards the proposed harmonisation of procurement acts and procedures within the East African- Community. He reiterated that public institutions around East Africa and other procurement entities still need proper supervision to ensure adherence to authorised purchasing regulations. Vice-President Dr Bilal said unlike the industrialised world, the penetration of imports in East Africa is significantly high and the nature of goods and services that public sectors in the region consume are mostly imported. “If you analyse our budgets, you will find that public administration, education, health and social services make up of over 70 per cent of the public expenditures in each...

East Africa is emerging as a trade hub to rival sub-Saharan Africa’s two heavyweight states of South Africa and Nigeria, according to analysis by Barclays published on Thursday. However the UK bank identifies five “sleeping giants” that present significant new opportunities for foreign companies; Ethiopia, the Democratic Republic of Congo, Mozambique, Tanzania and Ghana. This quintet which are “playing catch-up after significant political and economic upheaval . . . are increasingly attractive to foreign firms and international investors with an eye on long-term returns from fast-growing markets,” Barclays said in its inaugural Africa Trade Index. Matt Tuck, head of global corporate banking at Barclays, said the five were open to international trade and had rapidly growing populations that are likely to reach 325m in total by 2020, comparable to that of the US. Moreover, any repeat of the 7.3 per cent compound annual economic growth they have experienced over the past five years would lead to a significant rise in household spending. Most are relatively unreliant on commodity exports by African standards, shielding them from some of the storms currently battering emerging markets. “The core underlying fundamentals are getting better and with more stable government it does represent an opportunity for growth,” said Mr Tuck. “It’s a much more encouraging outlook than in the past.” Overall, Barclays found South Africa and Nigeria offered the best opportunities for foreign companies, in terms of unmet demand, the absence of major barriers to cross-border trade and their connectivity with other African countries. While South Africa is the...

Major infrastructural projects in Mombasa West have sparked a rush for property in the area, leading to a sharp increase in land prices. The Mombasa-Miritini Road, as well as the Airport and Port Reitz roads, are being expanded into dual carriageways to rid them of perennial traffic jams. The Sh23 billion projects are expected to be completed in three years. Similarly, the construction of the Sh327 billion standard gauge railway, has contributed to an appreciation of land prices in the area. The prospect of these areas developing has seen a lot of activity involving land transactions, resulting in the doubling, or even tripling, of land prices over the past two years, according to surveyors. The national Chairman of the Institution of Surveyors of Kenya (ISK), Mr Paul Wambua, says the trend will climax when the projects are completed. "Infrastructure is a key component in land use since it opens up areas as we saw happen with the expansion of Thika Road, and the same thing is expected in Mombasa West," he says. While the price of an acre in Port Reitz has doubled to Sh80 million in just two years, an eighth of an acre that was going for Sh1 million in Changamwe is now going for between Sh1.5 million and Sh2 million, Mr Wambua says. "We expect that, as the pattern for change in land use moves from residential to commercial, banks will relocate there, storage yards will be set up and light industrial and commercial activities will take...

The first-ever East African manufacturing business summit closed yesterday in Kampala with participants urging partner states to recommit themselves to the customs union and avoid protectionism in order to allow for free trade and fair competition to prevail in the region. Speaking at the two-day summit, Dr Mukisa Kituyi, the secretary general of United Nations Conference on Trade and Development (UNCTAD), said the current hullabaloo in Kenya over Ugandan sugar exports is a symptom of an inefficient EAC customs union authority. "If there was an efficient and properly working customs union authority there would be no notion of exporting from Uganda to Kenya because you would not call that exporting," he said. Early last month, presidents Uhuru Kenyatta and Yoweri Museveni reportedly struck a deal allowing Ugandan surplus sugar to access the Kenyan market. Although the deal also reportedly allows Kenyan dairy products to access the Ugandan market, the development was received with hostility by Kenyan opposition politicians lead by ex-prime minister Raila Odinga. Odinga, who lost the presidential election to Kenyatta, insists that the deal, whose details have not been made public, will make Kenyan sugar uncompetitive, and he has since been rallying farmers to reject it. Kenya and Uganda have since around 2010 had a longstanding conflict over sugar, culminating into a ban of Ugandan sugar exports in December 2012. The ban was based on allegations that Uganda was abusing EAC customs union benefits by importing tariff-free sugar from outside the region and repacking it for export to...

As Kenya prepares to host the Tenth World Trade Organisation Ministerial Conference in December, United Nations Conference on Trade and Development (UNCTAD) Secretary General Mukhisa Kituyi is urging African states categorised as least developed countries (LDC) to rethink their status because it stymies economic integration. The LDC status presents a trade barrier for countries that are not listed as least developed. Speaking to People Daily in Nairobi, Dr Kituyi noted with concern that economic partnership within the East African Community (EAC) bloc appears to be discriminating and could be punishing Kenya by denying it equal market access on the global platform because other partner states in the economic block are listed as LDCs. This is despite the fact that the principle of the EAC common market should be that of equal market access among partners. “Africa must understand why graduating from LDCs is made hostile, and why people are happy in being called poor,” Mukhisa said, adding that it is all about market access and resources. “We should not punish upward mobility but reward,” he said. Mukhisa said by not being listed as an LDC, Kenya must not be penalised but have similar market access in global trade and influence trade negotiations. To come up with the LDC statuses, every three years the UN Economic and Social Council evaluates countries based on three criteria: average household income, based on the country’s gross national income; human health, nutrition, average level of school achieved, and literacy rates (called “human assets”); and economic...

PRELIMINARY designs on the planned relocation of the Kipevu oil terminal in Mombasa are being finalised to pave way for the tendering process, Kenya Ports Authority managing director Gichiri Ndua has said. Danish consultancy firm Niras is overseeing the relocation of the oil terminal, which will expand the country’s petroleum handling and storage capacity by almost 400 per cent. “We have engaged a consultant who is finalising the designs in regard to the planned relocation of the Kipevu oil terminal,” Ndua said. KPA principal communication officer Hajj Masemo said the project is part of the Mombasa port infrastructure development. “Everything is on course. Once we internalise the designs, we move to tendering and construction which is expected to commence by end of this year,” said Masemo on phone. Last year, Kenya imported petroleum products worth Sh292.6 billion up from Sh252.7 billion the previous year, according to the Kenya Economic Survey 2015. KPA is set to move the Kipevu terminal to a new site on the southern side of the port, opposite the current container terminal. The relocation is expected to cost $120 million (Sh12.5 billion). The preliminary design will cost $1.7 million (Sh176 million). The new terminal, expected to be complete in 2018, will allow four large tankers of up to 150,000 tonnes to berth at the same time. Kenya currently has two oil terminals – Kipevu situated on the mainland Port Reitz which can accommodate a single vessel of up to 100,000 tonnes at a time and the Shimanzi...

When I last wrote on this space arguing that Kenyans are ready for mature politics, doubting Thomases thought it was funny yet this is just beginning to unfold today, courtesy of the controversial sugar deal 17 months to the elections. I doubt whether they still doubt. The brouhaha over sugar was godsend for Kenya's democratic maturity. One reason I mentioned in my last article regarding why Kenyans are likely to witness issue-based politics is because they are fed-up with politics of promises and rhetoric, which is why the Opposition's move to expose potential corruption is a good sell to prospective voters. The deal is a good political issue for politicians and the electorate to explore their level of maturity as Kenyans approach the 2017 elections. The other reason is the fact that the Jubilee administration has created a business-friendly environment that has seen Kenya emerge as a leading investment destination in East Africa and, increasingly, as a gateway to Africa. This is why Jubilee has premised the sugar deal with Uganda on the need to trade with friendly neighbours to fulfil the East African Protocol that allows countries in the EAC to export surplus products to meet production deficits elsewhere or those that have deficits to import so as to meet their production requirements under the rule of free and fair trade. Kenyans should be made aware that the balance of trade between Kenya and Uganda is in favour of Kenya, a reality that would make Uganda uncomfortable at a...