The East Africa Community registered six private equity deals in March, signalling a rising popularity with investors. The bloc said the private equity deals were mainly in infrastructure, manufacturing and real estate. Also witnessed was a diminishing interest in banks as sources of credit, as the rates charged had turned out to be expensive at above 18 per cent, compared with private equity deals which usually attract seven to eight per cent interest rate per year. Another strong point is the repayment period, which can be negotiated in case of a slowdown in business. Investors and multinational executives attending this year’s East Africa Trade and Commodity Finance Conference convened by the Global Trade Review in Nairobi said banks should rethink their traditional loan offerings to remain relevant. The forum heard that the current lending practices do not support growth but hinders uptake, forcing many businesses to rely on cheap funds from pension schemes, private equity and foreign investors. The panellists included Nakumatt Holdings financial controller Vijay Kumar, R.H Devani’s business development general manager Geoffrey Okora and UK Association of Corporate Treasurers development director James Lockyer. They warned that while traders continued to patronise local banks, the future portends a change of offering where banks have to come up with products that address direct business challenges or risk losing their core segment to incoming venture capitalists and private equity firms. Mr Okora said the prohibitive interest rates charged by local banks were fuelled by increased government borrowing which saw many banks buy...

As traders rue missed opportunities relating to Uganda choosing Tanzania over Kenya on the pipeline route, other initiatives are going on to spur intra-trade in East African. Hopefully, the recent initiative by Kenya and Uganda supported by a number of global and regional bodies to create a common platform for facilitating cross-border trade in fish and fishery products, using Busia Border point will succeed. Many times, the cumbersome and punitive inspection protocols for animal, human and plant products across the countries, which have different requirements and standards, has made it difficult for intra trade between the two countries. Uganda has a bigger supply for fish products, which on many occasions go to waste, while traders in Kenya face a huge domestic demand for fish products for local and export consumption cannot access because of stringent standards and different trade regimes within the two countries. To ease the cross border trade in fish and fish products, that will allow increased intra trade within the two countries, and by extension, export to other countries, a number of activities and facilities are to be established at the Busia border point that will provide quick inspection of human, animal and plant products health both at and behind borders. The pilot is among the several initiatives being implemented by partners in the business community as a way of increasing the level of intra trade volumes in Africa including: the EAC has developed the regional sanitary and phytosanitary standards, (SPS) the Inspectors’ guide; standard Operating Procedures;...

This year’s World Economic Forum for Africa was held at a time when there is a lot of turbulence in the global economy, with African countries facing lower commodity prices and depreciating currencies. What do you see as the role of innovation and technology in managing these challenges? If you think of the role of technology in driving growth, these are the things that look beyond the usual inputs and ensure that we keep growing. Prices for commodities have gone down and the International Monetary Fund has just lowered sub Saharan growth prospects to 3 per cent this year after steady growth for 15 years. It is time to make reforms that will allow Africa to benefit from technological transformation and to unleash its economies using digital transformation. Despite the recent growth we have seen in the service sector, the majority of African countries continue to depend on agriculture. How can digital transformation lead to structural transformation that creates jobs? African economies clearly depend on agriculture, and modernising agriculture would be a huge part of the story. Digital technology will have a large part to play in terms of knowledge sharing, and it is already making big improvements. If you look at the movement in the services sector, if you look at the productivity numbers over the past 10 years, countries all over the world have experienced a decline in services productivity. Meanwhile, Africa is moving into services but not high productivity services. I see these new technologies unleashing a...

Africa’s agriculture sector is at an inflection point and could grow significantly in the coming years with the right investments and policy actions. This was the submission of business leaders, government officials and others who gathered for the 2016 Grow Africa Investment Forum in Kigali recently. The Grow Africa partnership reported that over $500 million in new private-sector investments were implemented in 2015, bringing the total to $2.3 billion implemented out of over $10 billion committed by more than 200 African and global companies. In the past year, these investments reached around 10 million smallholder farmers and created 30,000 jobs, bringing the total number of jobs created to 88,000 since 2012. In the first quarter of 2016, almost $500 million in additional investment commitments were made, suggesting that investor interest remained strong. However, investors have substantial concerns about the enabling environment for African agriculture, according to a survey conducted by Grow Africa. Business leaders believe that better access to finance and risk management tools, infrastructure, and policy and regulatory improvements are needed – but out of over 130 company responses, almost 70 per cent reported seeing no improvement on these fronts over the past year. “Agriculture is the sector that will transform Africa. Our industrialisation will be driven by value-added processing of our agriculture products. However we need to tackle key bottlenecks like infrastructure and farmers’ access to finance and markets,” President of Kenya, Uhuru Kenyatta said. Also, the Prime Minister of Ethiopia,Hailemariam Dessalegn outlined the significant progress to date...

Regional inflation rates could spike in the medium term following the sustained rebound of the price of crude oil in the international market, where it has risen from a low of $29 early this year to the current $47 per barrel. Rwanda recorded a rise in its April inflation rate to 4.6 per cent, up from 4.1 per cent a month earlier, which it blamed on rising energy and transport costs. Kenya, Tanzania and Uganda have also recorded an increase in fuel prices in the past month. The three countries saw their inflation drop in April, with Kenya’s year-on-year inflation dropping to 5.27 per cent in April, from 6.45 per cent a month earlier. Uganda’s inflation dropped to 5.1 per cent in April from 6.2 per cent in March, while Tanzania saw its April inflation decrease to 5.1 per cent from 5.4 per cent a month earlier. Rwanda’s central bank (BNR) said the country’s inflation levels experienced pressure as a result of increased transport prices after the recovery in global oil prices. Rwanda’s monthly inflation rate rose by 0.8 per cent in April, while its food prices rose by 5.6 per cent. The annual inflation rate for housing, water, electricity, gas and other fuels increased by 3.9 per cent while that for transport rose by 7.6 per cent. Last week, Rwanda’s Ministry of Trade and Industry announced an increase in the petrol pump price from Rwf826 ($1.05) to Rwf860 ($1.09) per litre, making it the highest in the region. “The...

As a Kenyan, I am happy to hear that Rwanda is not walking away from Northern Corridor SGR, but working on a plan that will concurrently rely on its good relations with both Kenya and Tanzania to advance not only its interests but also the collective interests of the whole region through the railroads. However, I would urge the Rwandan government to broadcast this position much more loudly to the world. The reason is because media outlets from various parts of the world, based on the earlier misreporting on the topic, are spreading all sorts of innuendo about the impact of the decision by Rwanda to use the Tanzanian route on the existing cordial relations among the members of the East African Community. In conclusion, I would like to take this opportunity to urge the peoples of East Africa not to lose sight of the vision and mission that led to the creation of the East African Community that is currently powering the economic renaissance of the region. Let us hold hands and march forward together in unity and fraternity. We stand to gain more from collaboratively confronting our problems than from working separately. Who knows? In the future, we could evolve into a super state out of our collaboration. We could come up with something really ingenious with which to represent ourselves to the world—something like “The United Republic of Swahili Speakers”. Imagine how incredibly beautiful that would be. We would have everything within our borders—oil, coal, diamonds, great...

The chairman of the Private Sector Federation (PSF), Benjamin Gasamagera, has encouraged Rwandan traders to look for business partnership with Tanzanians and increase competitiveness. He said this on Friday during the first Tanzania Rwanda Trade Forum (TRTF) in Kigali. “We will provide ground not only for partnerships but also possible business opportunities for both our private sector operators, facilitate joint venture opportunities and exchange relevant business information and intelligence,” Gasamagera said. “In a forum such as TRTF, we are reminded to take advantage of the region as a single market for trade and investments,” he said. Gasamagera explained that information sharing will help in managing businesses much easier with a common goal. He added that the volume of exports between the two countries will increase and conducive environments for trade will be improved. Valentine Rugwabiza, the Minister of East African Community (MINEAC), said that the two countries will continue to work very actively to remove any trade barriers. “We need to work together to become global players and shift from being domestic players. As government, we stand ready to avail any facilitation for your businesses,” said Rugwabiza. The TRTF was held under the theme: ‘Strengthening Bilateral and Trade Investment Opportunities.’ it attracted key business players from Tanzania and Rwanda’s private sectors, as well as policy-makers from both governments. Since John Magufuli was inaugurated as president last November, Rwanda and Tanzania have made significant steps to improve bilateral relations. At a recent press conference in Kigali, president Kagame was asked about...

The local private sector has for the past many years complained about the numerous non-tariff barriers (NTB) along the Central Corridor, saying this was affecting their businesses and competitiveness. However, with the recent commitnent by the governments of Rwanda and the Republic of Tanzania to renew and to strengthen bilateral and economic ties, the situation is expected to improve. The Central Corridor is key to Rwanda as it covers a shorter distance to the sea port of Dar es Sallam compared to Mombasa port on the Northern Corridor. The route has hitherto been chanracterised by many NTBs, forcing Rwandan businesses to opt for the Mombasa route. The central corridor has been characterised by unharmonised trade policies, numerous checkpoints along the route, congestion at Dar es Salaam port, and theft, among others. However, as the two governments move to foster trade relations, experts are optimistic the move could turn around trade between the two countries. Experts say the development opens doors for trade partnerships and accelerated investments between the two countries. Francois Kanimba, the Minister for Trade and Industry, said that improving business and bilateral ties between Rwanda and Tanzania will increase trade flow, boosting Rwanda’s exports to Tanzania. “Indeed, this is a milestone in scaling up the campaign on trade development, trade facilitation and investment promotion,” Kanimba said. He reiterated government commitment toward strengthening relations and creating a conducive business environment to further improve trade between the two countries. The minister argued that Rwanda and Tanzania have been important trading...

Regional governments have been urged to make policies that support small-and-medium enterprises (SMEs) in the East African community (EAC) to spur the bloc’s growth, as well as bridge skills gap through knowledge transfer. Nathan Irumba, the Southern and Eastern African Trade, Information and Negotiations Institute (SEATINI) regional executive director, said this is important for EAC to promote such regulations, arguing that some EAC countries are pursuing policies that hinder business growth, especially for SMEs. Irumba was speaking during a regional meeting to discuss ways on how EAC can attract more investments that was held in Kampala last week. The two-day forum, held under the theme’ “Making investment work for the people of East African Community”, attracted regional business leaders, government officials, SME sector players, and other stakeholders from across the region. It called for investment friendly policies, and urged EAC governments to only sign trade deals that support sustainable development and improve lives of East Africans. Addressing participants, Irumba said EAC private sector and citizens have not benefitted much from foreign direct investments (FDIs) into the region, arguing that “we don’t understand the models that shape them”. He said it is important to understand what drives FDIs, especially where trade deals are involved if the EAC bloc is to benefit from investments that come into the region. His remarks were echoed by Uganda’s representative at the East African Legislative Assembly (EALA), Fred Mukasa Mbidde, who argued that most FDIs come with ‘strings attached’. “Foreign firms sometimes invest in our countries...

The EAC Secretary General, Hon, Amb Liberat Mfumukeko, yesterday afternoon took Oath of Allegiance as an Ex-Officio of the Assembly as the 6th Meeting of the 4th Session commenced in Arusha, Tanzania. Hon, Amb Liberat Mfumukeko was sworn in by the Clerk to the Assembly in a brief ceremony witnessed by the Speaker and Members of EALA in line with the Rule 5 of the Rules and Procedures of the Assembly. The Rule 5(4) of the Rules of Procedure say in part that: “No Member can sit or participate in the proceedings of the House until the Oath or Affirmation of Allegiance to the Treaty is taken”. Rule 5(5) specifically states that “when a Member first attends to take his or her seat other than at the first sitting of a new House, he or she shall be brought to the table by two Members and presented by them to the Speaker who shall then administer the Oath or Affirmation of Allegiance”.  Hon Mfumukeko was ushered in to the House by EALA Members, Hon Isabelle Ndahayo and Hon Hafsa Mossi.  Hon,Amb Mfumukeko was appointed during the February 2016 Summit of EAC Heads of State to replace Hon, Amb Dr Richard Sezibera. Prior to the appointment as Secretary General, Hon. Mfumukeko was the Deputy Secretary General, Finance and Administration at the EAC. Hon,Amb Liberat Mfumukeko has over twenty one years’ work experience in both private and public sector.  Prior to joining the EAC, Hon Amb Mfumukeko was the Director General of the Burundi...