The coming together of the East African Community members to harmonize customs processes has not only made it easier for traders to do business but also drastically reduced serious transnational crimes and enhanced revenue collection. This is mainly attributed to the implementation of the Single Customs Territory. Established in 2014, the SCT has reduced the cost of doing business by eliminating duplication of processes. It has also reduced administrative costs, regulatory requirements and the risks associated with non-compliance on the transit of goods. This is because taxes are paid at the first point of entry for all the partner states. Going by the latest statistics on revenue collection from the borders, it is evident that the investment on joint Customs initiatives is bearing fruits. Most One Stop Border Posts, being one of the SCT initiative, coadministered by KRA customs and revenue agencies from the other EAC member states have registered growth in revenue. Commonly traded goods in the region include sugar, timber, unprocessed tobacco and fresh farm produce, coffee, cotton lint, teak logs/beams, construction materials, vehicle spare parts and manufactured goods. Further, the OSBP concept has increased border crossing speed and efficiency hence reducing barriers to trade and improving business competitiveness. The average time taken to clear a truck is 5-10 minutes compared to 2-3 days previously. On the Northern Corridor, the turnaround time of goods transitin from Mombasa to Kampala has been reduced from 18 days to four, and goods from Mombasa to Kigali, from 21 days to six....

Ambassador Katureebe Tayebwa Consul - General of Uganda in Mombasa said more commitment was required from all stakeholders’ especially political leaders and state bureaucrats to remove barriers to trade. TRADE Many direct and indirect trade barriers continue to hinder increased trade among East Africans which could have led to increased prosperity in the region. Ambassador Katureebe Tayebwa Consul - General of Uganda in Mombasa said more commitment was required from all stakeholders’ especially political leaders and state bureaucrats to remove barriers to trade. This was during the Third Trade and Business Facilitation Symposium 2019 organized by the Consulate of Uganda in Mombasa and Trade Mark East Africa, an institution seeking to push prosperity in the region through increased trade. Tayebwa cited that Uganda’s tea exports go to the Port of Mombasa for the tea auction and so the two countries need each other. “We need to tackle the challenges that continue to hinder the seamless movement of goods in the region. We need to create networks in the region to harness the opportunities presented as well as create a platform where we can share challenges encountered in trade," Tayebwa said. Tayebwa said trade and business facilitation will be successful when supported through transformation of the economy and investing in infrastructure.' He said the governments in the region were investing heavily in infrastructure development. “We need to increase exports from the region. No country can develop without setting up industries for exports which create jobs and bring in foreign exchange,” Tayebwa...

East African Community member states are working towards linking the regional electronic payment system to other payment solutions in Africa, to moderate trade around the continent following the launch of the African Continent Free Trade Area (AfCFTA). EAC central banks are now finding ways of transforming the system by linking it with other payment solutions in Africa to allow seamless transfer of cash across the continent at both retail and wholesale levels. Bank of Uganda’s deputy governor Dr Louis Kasekende said the move will help improve intra-Africa trade and support the growth of regional firms. At present, Kenya controls transactions in the EAPS, which allows citizens of member countries to make and receive payments in regional currencies — the Kenyan shilling, Ugandan shilling, Tanzanian shilling, Rwandan franc and Burundian franc. South Sudan is yet to join the system, which links the respective real time gross settlements (RTGS) systems of Kenya, Uganda, Tanzania, Rwanda and Burundi. The operationalisation of the EAPS was largely meant to stregnthen regional currency convertibility. Kenya’s Central Bank is working in partnership with other regional central banks to smoothen the acceptance of the EAC domestic currencies as a way of enhancing regional trade and lowering transaction costs. In other regional blocs such as the Common Market for Eastern and Southern Africa, execution of currency convertibility has been enhanced by grouping member states into clusters. These are the Southern African subgroup, Northern African subgroup, Central and Eastern African subgroup and the Indian Ocean subgroup. According to the Comesa...

Stakeholders in the logistics sector hope the third Global Logistics Convention, taking place on August 29-30 at the Kigali International Convention Centre, can spur countries to enhance rail and water transport, embrace technology and curb political friction, among others. Local and regional freight forwarders, truckers, sector experts, and others, believe the conference comes in handy as regards finding solutions to challenges in the sector. Abhishek Sharma, TradeMark Africa’s Senior Director for Transport told Sunday Times that the whole idea has been that the logistics industry needs to come together to discuss issues jointly and improve dialogue with governments in the region. Sharma said: “The main player that invests money in logistics infrastructure is the government. But the main user of the infrastructure is the industry; the freight forwarders, and others. It is very important that when we are planning logistics, there is a constant dialogue between the government and the logistics players.” By and large, however, Sharma said that even though challenges persist in the region’s logistics sector, in the last 10 years, the status of logistics in the region has improved significantly. “The [transit] time and the cost have come down dramatically along both the northern corridor and the central corridor. On the central corridor, for Rwanda, while the average speed of truck on transit was 7 kilometers an hour it has now improved to as much as 14 kilometers an hour, he said.” The World Bank’s Logistics Performance Index – a tool created to help countries identify the...

THIRTY ninth Southern African Development Community (SADC) Summit ended yesterday, with the signing of three development cooperation programmes with the European Union (EU). The 47 million Euros deals for the period of five years are under the 11th European Development Fund (EDF). The programmes, which will be implemented by the SADC Secretariat are Support to Improving the Investment and Business Environment (SIBE), Trade Facilitation Programme (TFP) and Support to Industrialisation and Productive Sectors (SIPS). SADC Executive Secretary Dr Stergomena Tax signed the agreements on behalf of the community while EU was represented by its ambassador to Botswana and SADC Jan Sadek. According to Dr Tax, SIBE programme aims at achieving sustainable and inclusive growth and support job creation through transformation of the region into investment zone, promoting intraregional investments and Foreign Direct Investments (FDIs), with the focus on small and medium enterprises (SMEs). Trade Facilitation Progamme (TFP) will contribute to enhancing inclusive economic development in the SADC region through deepening regional economic integration. She said the SIPS programme aims at contributing to SADC industrialisation agenda, improving performance and growth of selected regional value chains and related services within the agroprocessing and pharmaceutical sectors. “The signing of the three programmes reflects an enduring partnership between SADC and EU towards enhancing SADC regional integration and social economic development, particularly at the time when SADC has committed to place industrialisation at the centre of regional integration,” Dr Tax said. According to Dr Tax, the programmes are interconnected and interdependent and collectively contribute to...

Intra-African trade remained low at 14.4 per cent in 2018, with the continental countries trading more with the Asia, according to a revew by the African Development Bank (AfDB) The Annual Development Effectiveness Review 2019, shows the activity was low against a 2015 baseline of 14.6 per cent and a target for 2018 at 17 per cent. The trade is expected to reach 25 per cent in 2025. AfDB said non-tariff barriers and a lack of political goodwill to address the challenges impede progress. It also cites poor infrastructure in roads and energy transmission lines constructed or rehabilitated to enhance cross-border trade. “Intra-Africa trade could grow by up to 15 per cent if the bilateral tariffs that are applied today in Africa are eliminated and the rules of origin kept simple and transparent,” AfDB said. The bank points to barriers that could restrain the African regional economic integration that was given a boost in March 2018 with the established African Continental Free Trade Area (AfCFTA). The AfCFTA is projected to increase intra-African trade by 52 per cent by 2022. Kenya ratified the deal. AfCFTA became operational in July after meeting the ratification threshold from other 22 countries. “By committing countries to remove tariffs on 90 per cent of goods, liberalising tariffs on services and addressing other non-tariff barriers, AfCFTA is expected to significantly increase the value of intra-Africa trade and investment,” notes the report. According to the bank, barriers such as cost of trading across borders remains high, more than...

The U.S.-China trade war and uncertainty over Brexit pose risks to Africa’s economic prospects that are “increasing by the day,” the head of the African Development Bank (AfDB) told Reuters. The trade dispute between the world’s two largest economies has roiled global markets and unnerved investors as it stretches into its second year with no end in sight. Britain, meanwhile, appears to be on course to leave the European Union on Oct. 31 without a transition deal, which economists fear could severely disrupt trade flows. Akinwumi Adesina, president of the AfDB, said the bank could review its economic growth projection for Africa - of 4% in 2019 and 4.1% in 2020 - if global external shocks accelerate. “We normally revise this depending on global external shocks that could slowdown global growth and these issues are increasing by the day,” Adesina told Reuters on the sidelines of the Southern African Development Community meeting in Tanzania’s commercial capital Dar es Salaam. “You have Brexit, you also have the recent challenges between Pakistan and India that have flared off there, plus you have the trade war between the United States and China. All these things can combine to slow global growth, with implications for African countries.” The bank chief said African nations need to boost trade with each other and add value to agricultural produce to cushion the impact of external shocks. “I think the trade war has significantly impacted economic growth prospects in China and therefore import demand from China has fallen...

On August 13, Rwanda tea made by Kitabi Tea Company – a tea factory located in Nyamagabe District – fetched the highest price ever recorded at the Weekly Mombasa Tea Auction, outshining lots from other countries. It sold at a record $6.06 (Rwf5,300) per kilogramme. It was followed by tea from Gisovu Tea Factory, another Rwandan brand, which sold at $5.97 per kilogramme.  These are the highest prices ever realised at the Mombasa Tea Auction since 1956 when the East African Tea Trade Association (EATTA) was established, according to the National Agricultural Exports Development Board (NAEB). The achievement has fuelled optimism for greater fortunes among tea growers, exporters and government alike. Jean Damascène Gasarabwe, Director-General of Kitabi Tea Company, a subsidiary of Rwanda Mountain Tea, said that the factory sold 5,408 kilogrammes (over 5.4 tonnes) at ($6.06 ) a kilogramme) at the auction. It is the second time Kitabi’s tea has been sold at higher price than any other tea from all countries participating in that auction as it was also holding the previous record of $5.66 a kilogramme, as NAEB indicates. The achievement, Gasarabwe said, was realised thanks to considerable efforts invested along the entire tea value chain from tea growing by farmers, plucking, to processing, and better management. The factory, he observed, works with 5,000 farmers. Last year, it produced and traded over 2,500 tonnes of processed tea, and targets to produce and sell 3,000 tonnes this year. “It is like a student who has emerged the best...

Rwandans travelling to Uganda have resorted to going through Tanzania as uncertainty shrouds the opening of the common border at Gatuna, six months after Kigali blockaded it and advised its citizens against crossing into the neighbouring country. GRUELLING JOURNEY Now, travellers use the Rusumo route in the southeast, cross into Tanzania and proceed to Kampala, a gruelling 12-hour journey. The journey through the direct route via the Gatuna border post is four hours shorter. There is no direct bus to Kampala through Rusumo. Passengers catch buses to the Tanzania side from which they board others to Kampala. Matunda Bus operates services to Rusumo. Some travellers who spoke to The EastAfrican said they have had to endure the detour due to business interests and families in Uganda, defying the advisory by Kigali that they risk being arrested, detained and tortured by Ugandan security agents. Olivier Nduhungirehe, State Minister for EAC Affairs told The EastAfrican that if there were people still travelling to Uganda it was “up to them.” “What we know is that we discouraged them from going there because of their security. We cannot prevent them from going. We strongly advise them not to go to Uganda,” he said. BORDER TRADE AFFECTED The EastAfrican toured the border area at Gatuna this week and found the informal cross-border trade dead. Trade in foodstuff is now one way, with Ugandans allowed to cross into Rwanda to buy or sell goods. Forex shops are, however, still thriving due to a large number of Ugandans and tourists who cross...

A raft of measures that the taxman, the Uganda Revenue Authority (URA) has undertaken to raise domestic revenue as a percentage of GDP over the years continues to bear sweet fruits, elevating the country’s tax to GDP ratio. Whereas URA was charged with collecting a net revenue target of sh16.4 trillion, the financial year closed with sh16.6 trillion generated, registering a growth rate of 14.95% or, in real terms, an addition of sh2.16 trillion to the treasury in comparison to the 2017/18, according to Doris Akol, the URA Commissioner General. “The performance was 101.58% which, in real terms, meant a surplus of sh258.8b above the target and the highest target that URA has registered over its 28-year period” she told reporters at the annual press briefing recently. UGANDA AND EAC Uganda’s average net revenue collections growth over the past 5-year period was at 15.72%. “The tax to GDP ratio has increased from 12.84% in the 2014/15 to 15.11% in the 2018/19 above the National Development Plan (NDP 2) target of 14.90%,” says Akol. This growth elevated Uganda’s tax to GDP ratio, with URA currently 3rd in the EAC bloc. In the 2018/19, we recorded a tax to GDP ratio of 15.1%. Kenya, at 16.5% generates more revenue domestically, followed by Rwanda (15.2%), Uganda (15.1%), Tanzania (13.2%) and Burundi (13.4%), says Akol. “By the end of this 2019/20FY, we expect to be at 16% but you can’t compare us too much with others because their economies are not the same as...