THE East African Community Secretary General, Dr Richard Sezibera, has challenged the private sector to play a more active role in anti-corruption crusade saying they are seen to be facilitating the vice rather than fighting it. Dr Sezibera said in Dar es Salaam last week that he was concerned that many operators in the private sector set budgets under different names, for bribes, something which indicated that they were facilitating the vice. "We are concerned the private sector have budget lines called facilitation. This is a serious problem," he said at a meeting with Chief Executive Officers of business enterprises organised to discuss issues affecting trade and investments in the region. He said the impact of corruption on commercial interests was immense as it adds 10 per cent or more to the cost of doing business. "It is a serious problem and unless the private sector deal with this issue as an industry, we will end up at the bottom". The crusade against corruption was an area the EAC community had not made good progress, he said noting that private sector participation in the crusade against corruption is key to success. According to the United Nations, corruption adds 10 per cent or more to the cost of doing business in many parts of the world and as much as 25 per cent to the cost of public procurement. Corruption also impedes economic growth, distorts competition, and creates serious legal and reputational risks. Dr Sezibera said there were progress in improving...

During the period up to the 1970s, truckloads of copper ingots would line up in Mombasa port to deliver their cargo. A dedicated area — the “G” section — at the port would store Zambian copper awaiting export. In those years, the port “hinterland” covered reached as far as Zambia. That was then. Today, not a single kilogramme of Zambian copper is exported through Mombasa. Most of it goes through Dar es Salaam port. What happened? In those past years, it was generally accepted that Mombasa port’s absolute hinterland was geographically determined and static, covering Kenya, Uganda, Rwanda, Burundi and Eastern DRC. It has since been proved that hinterland can be influenced and changed by technology — such as the Single Window customs clearance, removal of non-tariff barriers and enhancement of physical infrastructure such as roads, rail and even port efficiency. The speed of change was slow in the past, but with the current ambitious investment in infrastructure by all regional governments, how will the network of refurbished roads, new road network, new standard gauge railway network and new ports influence supply chains? Kenya has unveiled an ambitious road construction plan — the building of an additional 10,000km of tarmacked roads in five years. Compare that to 14,000km in 50 years since independence. Two SGR corridors, Mombasa-Nairobi-Malaba and Lamu-Isiolo to Ethiopia and South Sudan, when completed, will open up new opportunities for Mombasa port. The proposed SGR master plan provides for a linkage of the Northern Corridor with a line...

Port user charges at the Dar es Salaam Port will go up by over 30 per cent should a new tariff proposal be approved by the authorities. The International Container Terminal Services (Ticts) has filed an application for higher charge on port users, raising concern that the new tariff could undermine competitiveness of the port. Ticts is applying for a 31 per cent increase in loading and unloading a 20 and 40-foot container in a ship (stevedoring) and 32 per cent increase in handling the same containers at the terminal. But some stakeholders say if accepted, shipping lines will pass the cost on to the end users. The decision whether or not to grant the application now lies with the Surface and Marine Transport Regulatory Authority (Sumatra) that has the power to determine the tariff. Currently, stevedoring charges for a 20 and 40-foot full container load (FCL) intended for domestic use stands at $71 and $107 respectively and Ticts is proposing to increase the rate to $93 and $140. The rate for handling the 20 and 40-foot domestic container now stands at $79 and $119 respectively but Ticts is proposing an increment to $104 for a 20 feet container and $157 for handling a 40-foot container. Ticts was reluctant to share more information on the new tariff plan, with the firm’s marketing manager, Mr John Masasi, referring all the queries to Sumatra. Sumatra officials were not immediately ready to comment on the matter, with its senior public relations officer, David...

Development partners have launched a US$596 million project aimed at improving operational efficiency of Dar es Salaam port. The World Bank which has approved a US$400 million loan will partner with the UK’s Department for International Development (DFID), providing a grant of US$136 million and TradeMark Africa, an organization funded by a range of development agencies in East Africa, that has made a commitment of US$60 million. CMA CGM said the project is a Tanzania Ports Authority plan which was a response to the east African nation’s Big Results Now (BRN) initiative aimed at generating capacity to cater for the impending traffic growth at the port. Phase 2, which is funded by the World Bank and DFID, aims to dredging the port and modernize berths to allow the handling of bigger vessels. Doing so will significantly increase throughput. Source: Dredging News Online

Non-Tariff Barriers are still posing a serious challenge to regional trade and integration in East Africa, a regional chief has said. Speaking at the recently concluded private sector chief executives forum in Dar es Salaam, EAC Secretary-General Richard Sezibera said they account for significant proportion of the high transportation costs in the East African Community. “Transportation costs are estimated to be 60-70 per cent higher than in the US or Europe, and 30 per cent higher than in southern Africa,” said Mr Sezibera. In March this year, a key Bill on eliminating the barriers sailed through its third reading pending assent by Heads of State. The objective of the Bill, which was moved by the council of ministers, is to provide a legal mechanism for elimination of identified NTBs in partner States. According to the East African Business Council Chairman Felix Mosha, Eala played a significant role by passing the Bill, however, a number of issues crippling trade in the bloc still remain pending. “They include fast-tracking implementation of the single customs territory so that intended benefits can be realised by removing unfair competition and encourage efficiency and competitiveness in EAC,” said Mr Mosha. Source: Daily Nation

Kenyan President Uhuru Kenyatta has urged African governments to open their borders, trade with each other and reduce dependency on foreign aid. Speaking at the Pan African Parliament in Midrand, Kenyatta told members of the house that the continent's potential could be realised only if African governments worked together and made it easier to trade with each other. "There cannot be a good reason why it is easier for us to trade with Asia, Europe and the Americas rather than our own fellow Africans. We have ended up as a source of raw materials. This must come to an end. Africa must use her resources to create jobs for our own young people." "Africa must significantly open her markets to African products to promote this ideal. That process can only be achieved if we start by opening up our borders to each other," Kenyatta said. He called for governments to significantly reduce the cost of inter-Africa trade and to forge partnerships which would take the continent into a new industrial development. Partnerships have started to emerge in East Africa. This process began in July 2000 with Kenya, Tanzania, Rwanda, Uganda and Burundi. This community undertook to establish a customs union, common market, monitoring union and a political federation. The customs union is already in place and the common market goal is gradually being achieved. "Despite our individually small economies, the integration has placed the entire region on a trajectory of growth that will fundamentally transform Africa," Kenyatta said. East African...

The East African Community Legislative Assembly recently passed a binding legislation to eliminate non-tariff barriers to trade among East African Community partner states. Known as the East African Community Elimination of Non-Tariff Barriers Act, 2015, the law is likely to contribute to increased intra-EAC trade once ratified nationally by each of the five states — Kenya, Burundi, Rwanda, Tanzania and Uganda. NTBs are partly to blame for the still limited intra-EAC trade, estimated at 13 per cent in 2013. NTBs often limit market access, changing the quantities of goods traded, or increasing the prices of goods. They come in various forms such as restrictive sanitary and environmental protection measures, import or export restrictions, price controls, arbitrary application of rules of origin and other trade-restrictive measures. Although there are no quantitative studies on the impact of NTBs in the region, the most recent Business Climate Index Survey in 2011 by the East African Business Council showed that businesses feel that NTBs have continued unabated in the EAC. Perhaps even worse, the general public seems to lack awareness of NTBs and their negative impact on their economic circumstances. The importance of the Act cannot be overstated. It provides the business community the opportunity to report NTBs and see to their final resolution through the formal channels of the EAC Secretariat, with a clearly defined elimination framework. Before that, businesses could report NTBs to their respective national monitoring committee (NMC), who would in turn report them during the regional forums of NMCs, usually...

East African Community countries and those of Central Africa are spending billions of dollars in freight costs on foreign-owned shipping firms that they would otherwise have used on their own. Between 2008 and 2012, Kenya, Tanzania, Uganda, Zambia, Malawi, Rwanda and Burundi paid $48.2 billion in freight costs, according to the Intergovernmental Standing Committee on Shipping (ISCOS). “These are colossal amounts of money. It is high time countries in East Africa explored the idea of investing in vessels,” ISCOS secretary Kenneth Mwige said, adding that apart from Ethiopia, most countries in Africa do not own ships. Kenya paid $15.6 billion in the five years of the review, followed by Zambia and Tanzania, which spent $11.2 billion and $10.5 billion respectively. “If EAC states are to grow their economies, they cannot afford to keep paying this kind of money to foreign companies. Their economies are growing and imports are increasing at an average rate of seven per cent annually, so these figures will keep rising,” said Mr Mwige. ISCOS — an initiative of Kenya, Uganda, Tanzania and Zambia — plays a key advisory role on maritime matters. According to Kenya Ports Authority statistics, the volume of cargo passing through Mombasa Port is projected to grow at between five and 10 per cent this year, that is, 27.36 million tonnes compared with the 24.875 million tonnes handled in 2014. Container traffic at the port is projected to rise from 1.012 million twenty-foot equivalent unit (teu) containers last year to 1.3 million teu...

The East African Community will next month begin talks with the African Development Bank (AfDB) over $500 million credit for the construction of Malindi–Bagamoyo highway. “The estimated project cost is $500 million. The AfDB has indicated that the project will be included in the funding programme commencing 2016,” EAC Principal Civil Engineer, Hosea Nyangweso told The EastAfrican. It is expected that construction of the 460km highway will start in 2017 to be completed over a period of 36 months. The EAC and the AfDB agreed on a grant of $5.5 million that covered the feasibility studies and detailed designs for the highway and for the Arusha-Voi road project. Malindi-Bagamoyo is one of the priority multinational roads spearheaded by the Community to boost cross-border-trade, Mr Nyangweso said. The road has not been without challenges. Among these were the full re-design of the whole of the Tanzanian section of the project and failure to resolve environmental issues around the Saadani National Park in Tanzania, which resulted in an additional design loop of almost 80km around the park. Changes in scope of the assignment for the Kenyan section to include grade separation at major intersections in Mombasa and Mtwapa added to the delay. The road is expected to boost regional integration, cross border trade and tourism as it will open up investment opportunities. It will also improve road transport between Kenya and Tanzania coastlines, particularly between Mombasa and Bagamoyo. The road will ease cargo movement from both Mombasa and Tanga ports to the...

EAC ministers have agreed to align national tourism laws to the EAC Customs Management Act. Amending of the laws will accord privately owned non-commercial vehicles registered in a member state local status on excursions to tourism sites across borders. The agreement follows a recent dispute that saw Kenya ban Tanzanian registered tourist vehicles from accessing Jomo Kenyatta International Airport, national parks and other tourist sites. Tanzania retaliated by cutting down the frequency of Kenya Airways flights from Nairobi to Dar es Salaam, Zanzibar and Kilimanjaro by more than 60 per cent. Though the standoff was resolved, the chief executive officer of the Kenya Tourism Federation, Agatha Juma, said the problem of commercial vehicles not accessing each other’s airports and tourist sites should be addressed. “If laws are to be amended, then Tanzania should first amend its current Tourism Act that bars foreign registered vehicles from its national parks,” said Ms Juma. “We are waiting for the bilateral meeting between the two countries to see what decision will be taken to resolve the issue.” Tanzania’s Tourism Act 2008 stipulates that foreign registered tour operator vehicles are not allowed entry into national parks. According to Fred Kaigwa, the Kenya Association of Tour Operators chief executive, although the two presidents directed that Tanzania’s tour vans be allowed to access JKIA, it was an unfair decision for Kenya. “Tanzania still bars our commercial vehicles from their tourist sites,” said Mr Kaigwa. Richard Rugimbana, the executive secretary of the Tourism Confederation of Tanzania, said the...