Kigali — Citizens of the region will benefit a great deal from the facilities offered by the One Stop Border Posts (OSBPs) system in the East African Community Partner States, but there are still technicalties holding back full implementation. According a report by a committee set up by the East African Legislative Assembly (EALA), where the facilities are already running, there is free movement of persons and a faster flow of trade between the respective states. The report was adopted by the House during their sitting in Kigali last week. The regional legislators are now calling for the fast-tracking of all remaining works of the OSBPs to allow its implementation for further integration. During debate, at one stage Shyrose Bhanji said she was concerned with the slow implementation of the decisions of the House and these were being overlooked. "I had hoped to hear there is 100% implementation of the OSBPs. The reasons given for the delay are not good. Where is the problem Honourable Speaker? The process of getting the Bill has been costly. It is important that it is effected," she said. It was agreed that it is key for the assent of the OSBP Bill, 2013, in the Partner States to be finalized to give it legal effect in the entire region. According to release fromthe Secretariat, members were informed that Partner States are implementing the OSBP Initiatives bilaterally as they await for completion of the Assent process. At the moment, the Bill which was introduced by...

Rwanda’s push to overcome international bias over the origin of its mineral exports has been hampered by the reluctance of regional countries to implement a regional mineral certification mechanism, experts say. The certification is aimed at curbing the illicit flow of “conflict minerals,” including tin, tantalum and tungsten (the 3Ts), which are Rwanda’s principal mineral exports, and gold. Twelve member states of the International Conference on the Great Lakes Region (ICGLR) agreed to a deadline of December 2015 to put in place requirements for the mechanism. Last week, the ICGLR held a meeting in Kigali where it lobbied member states to hasten implementation of the regional certificate mechanism, in order to boost its value on the international market. “ICGLR has developed a strategy that addresses cross border smuggling and levies uniform mining procedures across the region. All countries should feel the same pressure in implementing this and they should learn from the experiences of those that have done their best to put the mechanism in place,” William Aliga, chairman of the ICGLR Regional Committee on the Regional Initiative on Natural Resources, said. Partnership Africa is working with Kenya, Zambia and Tanzania to bring them on board. “We all know that December 2015 will come and go and the member states will not all have implemented the ICGLR Mineral Certification Mechanism, and then they will have to ask for an extension,” Joanne Lebert, executive director of Partnership Africa Canada said in an interview. “If the regional certification mechanism is fully implemented,...

Multinationals operating in Kenya, Tanzania and Uganda will be among the first in Africa to feel the impact of new measures to be adopted in January to curb tax losses caused by manipulation of contracts between related companies. The three countries together with Nigeria, Ghana, Burkina Faso, Senegal, Botswana and South Africa, formed a technical group that this month led to the adoption of the Base Erosion and Profit Shifting (BEPS) action by the G20, which aims to save developing countries an estimated $150 billion in tax losses, a quarter of them in Africa. “We expect to see definite improvements in revenue collection from the deterrent effect of better legislation, treaties and enhanced guidelines and transparency initiatives we are rolling out effective from 2016,” said Alice Owuor, Kenya Revenue Authority commissioner for domestic taxes. Illicit flows No reliable data exists on the extent of tax avoidance by multinationals in Kenya. However, KRA Commissioner-General John Njiraini reported in September 2013 that an audit of 40 companies mainly in the horticulture sector had reversed losses of $80 million into profits that yielded more than $40 million in tax revenue. Conservative estimates from Global Financial Integrity (GFI), a US illicit flows watchdog, has estimated Kenya’s transfer pricing-related tax losses at $115 million annually. Ms Owuor said KRA has since been conducting audits on transfer pricing and international tax after noticing anomalies in tax records of multinationals. “We have observed a worrying trend in statistics, where corporation taxes from companies doing business in Kenya constitute...

The quest by African countries to get subsidies on agricultural exports by developed countries removed is unlikely to be realised at the World Trade Organisation Ministerial Conference in Nairobi, after an informal session of delegates failed to close ranks on the matter. Export subsidies — including finance (credit, guarantees and insurance), food aid and state trading agencies — were seen as one of the difficult-to-negotiate areas at the December 15-18 meeting and members at the informal session in Geneva last week confirmed the sharp differences. “Three new proposals were submitted. Two were on export competition, pushed by several developed nations, and one on special safeguard measures for poor farmers made by the G-33 group, which includes India. But there was no convergence of views on these new proposals,” a WTO official in Geneva said. The European Union, Brazil and other countries tabled new proposals on export competition that included new flexibilities aimed at appeasing the United States. In the new proposals, the EU is willing to be flexible on issues like export credits and food aid disciplines in order to reach an export competition deal in Nairobi, but for Africa and other developing countries to benefit, the US now needs to make concessions on those issues as well. “Two aspects of the proposal that the US is unwilling to accept are its requirements that the maximum loan repayment for export financing for agricultural products be limited to nine months, and restrictions on the so-called monetisation of food aid,” said the...

The Kenya National Highways Authority (KeNHA) has invited bids for the upgrade of the 172-kilometre Ahero-Isebania highway that is expected to boost trade with Tanzania. The project to be funded by the African Development Bank (AfDB) and the government of Kenya will be implemented in two lots, one covering the Ahero-Kisii stretch and another covering the Kisii-Isebania section. “Interested firms must provide information indicating that they are qualified to perform the services,” the agency said, setting a December 17 deadline for submission of bids. The project traversing four counties – Migori, Kisii, Homa Bay and Kisumu – is expected to improve trade in the Lake Victoria basin. Traders in Kenya and Tanzania presently struggle on the narrow and worn road. The new highway will have special service roads at commercial centres to boost uptake of goods. “The rehabilitation of the Isebania-Kisii-Ahero section of the Tanzania-Kenya-South Sudan Corridor will facilitate cross border movement of passengers and freight, and further enhance access to regional markets,” says the environmental and social study report. “The project road condition has deteriorated over the years due to increasing transit traffic on the road. Currently, the road carriageway width measures 4-5m wide, and increasingly is becoming a major constraint for the main economic activities within the Lake Victoria basin.” The report adds that traffic accidents have increased due to the narrow and heavily potholed road condition. The project will also entail upgrading 75km of feeder roads that connect to the highway. These include the Oyugis-Kendu Bay road...

iShamba, a mobile based platform that enables small holder farmers access real time agricultural and market price information and expert advice via SMS and a call centre, won global recognition in the recently held Mobile Innovation Awards. iShamba is funded by TRAC, the TradeMark Africa’s Challenge Fund and was devised by Mediae Company, Kenya. [caption id="attachment_10865" align="alignleft" width="600"] TMA challenge fund grantee iShamba wins two innovation awards[/caption] On 6th October 2015, the Mediae Company was awarded the winner of the ‘Effective Integration of Mobile in an OmniChannel Strategy’ category to reflect the valuable contribution made by iShamba in delivering agricultural information to farmers via SMS and call centre, alongside Mediae’s existing Shamba Shape-Up program that is offered via radio, print and TV. In addition, the product’s innovation was recognised with the “Regional Award (Africa)”. iShamba is the mobile complement to Shamba Shape-Up, an “edutainment” programme created by The Mediae Company. Aimed at East Africa’s rapidly growing rural audience, the makeover-style TV show aims to give its audience the tools they need to improve their farm’s productivity and profitability. Launched in March 2015, the iShamba project aimed to assist 20,000 smallholder farmers but as of the end of September 2015 this target had been well surpassed. The market price information improves a farmer’s bargaining power by providing timely information on crop prices from 27 markets across Kenya. “If you subscribe you get market prices for a couple of crops in a couple of locations, you get weather information, and we also...

The global chairman of the Pan African Movement and Kenya minister of Justice and Constitutional Affairs, Maj Gen Kahinda Otafiire, said  African governments should eradicate trade barriers if they are to create jobs and boost investment on the continent. Maj Gen Otafiire said this at the launch of a partnership between the Pan African Movement and TAL Group in Mombasa, Kenya. African countries continue to have trade barriers restricting the movement of goods and services despite efforts to unify the continent. In East Africa, for instance, the presence of nontariff barriers has restricted trading, especially where goods have to enter markets such as Kenya and Tanzania from Uganda. “African countries need to tear down artificial borders in order for the continent to get economic freedom. We have had political freedom for a while, but economic freedom remains a dream for most African countries,” Maj Gen Otafiire said. TAL Group runs a nine-acre Makupa Transit Shade at the Port of Mombasa. In June 2015, a coalition of three regional economic communities representing 26 African countries bringing together a population of 600 million people came together to form the Tripartite Free Trade Area, aimed at boosting intra-African trade. The continent, despite being resource rich, is one of the poorest with unemployment being a big problem. Unemployment among the youth in Uganda, for instance, is at about 63 per cent. “It is not until we pull our resources together so we can develop this continent. It hurts to see Africans drowning in the...

The World Trade Organisation’s Goods Council has approved a request from the US for the extension of the waiver of the Africa Growth and Opportunity Act (Agoa). The waiver means that goods from African countries will continue to have free access to the US market and are exempt from the most favoured nation and non-discrimination provisions under the WTO’s General Agreement on Tariffs and Trade. The US enacted legislation in June 2015 extending the Agoa programme for 10 years, or until 30 September 2025.  The waiver will run until the expiry of the programme. It is estimated that with the approval, trade under Agoa in the East African countries will bring in $100 million in new investment to the region, which will create about 10,000 jobs in the period through to 2019. Imports of goods under Agoa provisions totalled $11.8 billion in 2014. Over 91 per cent of US imports from Agoa-eligible countries entered the US duty-free under the Generalised System of Preferences (GSP), or other zero-tariff provisions, it added. According to Nelson Ndirangu, director of economic affairs and international trade at Kenya’s Ministry of Foreign Affairs and International Trade, the waiver had to be approved because it is inconsistent with the most favoured nation obligation. “Programmes such as the GSP, under which developed countries grant preferential tariff rates to developing country products, require a waiver by WTO because they accord some countries more favourable tariff treatment,” said Mr Ndirangu. Agoa enables about 6,500 commodities from sub-Saharan African countries to enter...

In a bid to transform Bangamoyo, Tanzania into a regional trade and logistics hub, the Tanzanian government has secured investments totalling $10 billion to build a mega-port, according to Tuscor Lloyds. The project has received around $10.7 billion in finance from China and Oman, which will be used to develop port facilities in order to boost Bagamoyo’s capacity to 20 million TEU. As well as seeing an increase in export growth over the next 25 years, Jakaya Kilwete, President of Tanzania, is keen to see the country embark on an industrial revolution. The port plans to welcome mega-ships with around 8,000 TEU capacity in two to three years, but wider project completion may take anything up to 10 years. The region also hopes to compete with Mombasa and Dar es Salaam, which are said to be among the key ports along the East African coast. Mombasa Port is currently the most efficient entry to the East African region according to the 2015 East Africa Logistics Performance Survey, a title which Tanzania is keen to take. Kenya has invested in plans for a second container terminal at Mombasa, valued at $274 million. And just along the coast, Lamu Port embarked on a massive infrastructure project in May, 2015, involving construction at the port, as well as a power plant and railway links. Source: Port Technology

East African states have made considerable efforts in recent years to reduce the cost of doing business and boost intra-regional trade. There have been investments in large infrastructure projects, such as the expansion of ports and construction of highways; the introduction of one-stop border posts; and measures to ease the movement of goods and people across borders. But despite these efforts, the cost of doing business across the East African Community (EAC) remains high.

 Nairobi-headquartered TradeMark Africa (TMA) was established in 2010 with US$560m funding from a range of development agencies with the aim of improving trade in the region. TMA works with EAC institutions, national governments, and business and civil society organisations. How we made it in Africa spoke to TMA chief executive Frank Matsaert about the progress made in reducing trade costs, how to stop corruption, and the significance of informal traders. Below are edited excerpts. Businesses often complain about high transport costs in East Africa. Are things getting any better? The transport costs in East Africa are on average still about 60% higher than in the US and Europe. Landlocked countries like Rwanda, Uganda, South Sudan and DRC can’t export much because the costs are just so high. The high trade cost is holding back these economies. We aim to solve these challenges through initiatives that increase physical access to markets, enhance the trade environment, and improve business competitiveness. One of our targets is to increase trade by 10% by the end of next year and we are...