Three African economic blocs will merge into a new 27-nation free-trade zone in an agreement to be signed in Cairo in June when Heads of State from the regions meet at a joint summit. The deal will combine the Common Market for Eastern and Southern Africa (Comesa), the South African Development Community (SADC), and the East African Community (EAC). This will create a free trade union capturing more than 60 per cent of the continent’s economic activity and investors will easily reach a market of 625 million consumers from South Africa to Egypt. A preliminary programme released by Mr Sindiso Ngwenya, the Comesa secretary-general and chair of a tripartite taskforce on the planned merger, indicates that the leaders of the 27 member States are expected to congregate on June 10 to sign the Free Trade Area (FTA) agreement. “The tripartite FTA popularly known as the grand Free Trade Area will be the largest economic bloc on the continent and the launching pad for the establishment of the Continental Free Trade Area (CFTA) in 2017,” Comesa said. SADC, EAC and the Comesa have since 2008 been negotiating a road map to merge into a free trade area with a GDP of about $1.2 trillion (Sh109 trillion). “The launching of the tripartite Free Trade Area is the first phase of implementing a developmental regional integration strategy that places high priority on infrastructure development, industrialisation and free movement of business persons,” Comesa said in a brief. Although African economies are growing fast, second...

KIGALI, Rwanda - President Paul Kagame has welcomed the private sector as a formal partner in realizing the objectives of the Northern Corridor Project Initiative. The Initiative is intended to mainly streamline logistics along the main trunk route between Mombasa and the East African hinterland. “I am thankful to the Heads of State who have also agreed to this and extended their invitations to the private sector federations for their participation. The participation will add value to our work and we are pleased to move forward together,” Kagame said. The Rwandan President was speaking during the 9thNorthern Corridor Infrastructure Project Summit (NCIP) in the presence of President Yoweri Museveni of Uganda, President Uhuru Kenyatta of Kenya, President Jakaya Mwisho Kikwete of Tanzania, President Salva Kiir Mayardit of South Sudan, Burundi’s Second Vice President Dr. Gervais Rufyiki, Ethiopia’s Minister of Foreign Affairs Tedros Adhanom Ghebreyesus and the East African Community Secretary General. Others in attendance were regional ministers and private sector federations representatives. Kagame said, “We are all encouraged to be more involved and to stay on the course and to focus on the desired outcomes. With political will and prompt follow through we can achieve the tangible results the people of our region need and deserve,” he said. Kagame thanked the Heads of State for their steadfast commitment to the project for infrastructure and other key issues which are also part of the broader integration objectives of the EAC. Now the crucial thing is to see how fast these objectives...

Last week, Anatoly Nahayo, a law expert, was speaking recently after launching his book titled ‘East African Community Tax Harmonisation’. He was at the East African Community headquarters in Arusha advising his listeners on the wisdom for working in tandem when it comes to regional tax issues. Partner states have been talking quietly and carefully over the issue, but it is extremely sensitive. In most cases each country is doing its own thing, especially tax incentives. Nahana said there are limited avenues to query the decision of finance ministers to exempt individual business people or companies For some time now, the World Bank and International Monetary Fund have been politely and firmly advising regional governments to dispense with tax incentives. We are told tax incentives are bad in theory and bad in practice. Mainly because they distort company investment decisions and competition between companies. We are further told that giving tax breaks to businesses to attract investments and jobs actually ends up hurting the economy. The government will lose substantial revenue, which means difficulties in funding education, infrastructure improvements and other public services. Most of the EAC countries have dangled this tax incentive sweet with varying success. However, in recent years the most suitable way has been to set up export processing zones where companies can enjoy them. Kenya likes to lure textiles manfacturers to set up shop in special zones expected to be up and running in two to three years. Tax breaks are a central part of the...

BAGAMOYO, Tanzania, March 15 (Reuters) - In its heyday, Bagamayo was a gateway to the heart of Africa for colonisers, with trade goods surging in from the Indian Ocean, and timber, ivory and countless slaves exported from the east coast harbour. Then Bagamoyo, which looks out towards the island of Zanzibar, fell on lean times for more than a century. Now Tanzania plans an $11 billion project to make it the region's biggest port and an engine of Africa's boom. The Chinese-backed project would dwarf Kenya's port at Mombasa, east Africa's trade gateway some 300 km (180 miles) to the north, and include an industrial zone and rail and road links to capitalise on growth in a region hoping to exploit new oil and gas finds. "It will be the engine for economic activity not only for Bagamoyo but for the entire region," said district executive Ibrahim Matovu, speaking from offices overlooking beaches where ship-builders hammer out wooden dhows as they have for centuries. Many doubt the plan can succeed and ask if Bagamoyo is even the right location for a port, given it is just 75 km (50 miles) up the coast from Dar es Salaam and far from gas deposits off Tanzania's southern coast. Politics also plays a role. President Jakaya Kikwete comes from Bagamoyo and many see the port as his legacy project. But a groundbreaking ceremony was delayed from July and the project is unlikely to be revived during an election season that culminates in October,...

Countries in East Africa have the best environment for small and medium enterprises (SMEs) compared to other parts of the continent, an organisation has said. African Guarantee Fund (AGF), which assists small firms gain access to funding and develop capacity, said the region had made it possible for budding businesses to thrive. AGF Chief Executive Felix Bikpo said the trend put East Africa in high potential for economic growth, considering that SMEs are key drivers to the modern economy in the world. BEST IN ENTIRE CONTINENT “We have launched an award that recognises the best SMEs in the entire continent and out of the 121 entries we had, all the three winners with quality and thriving SMEs came from this region. If you look at Rwanda where the overall winner comes from, you will understand that ease of doing business and growth of better business environment rests in this part of the continent,” said Mr Bikpo. The first edition of the awards was held in Dakar, Senegal, last year, with the next set to take place in Kenya. Three winners were awarded on Friday at a ceremony held at a Nairobi hotel. The Young Entrepreneurship Award went to Village Group Ltd from Rwanda, while the Regional Development Award was won by Tabaki Freight Services International from Kenya. Sosoma Industries from Rwanda scooped the best SME of the year award that came with a token of Sh4.5 million over and above the trophy. Winners will also benefit from free auditing and...

NAIROBI: Kenya contributed the bulk of large capital infrastructure projects implemented in East Africa in 2014, followed by Uganda, Ethiopia, Tanzania and Rwanda respectively, a new study released on Tuesday reveals. According to the third edition of the annual Deloitte African Construction Trends Report 2014, transport sector accounted for 59 percent of all the projects in Kenya, representing a growth of 17 percent, while 37 percent of projects were focused on energy and power capacity development. However, the report which was launched in Nairobi notes that mega infrastructure projects in the East African region dropped significantly in 2014 as activity increased in the rest of the continent. “While there seems to have been a dip in current activity, there are a large number of significant projects in the planning phase that have not yet reached financial close and are thus not yet reflecting in the statistics of projects under construction,” Mark Smith, the Head of Infrastructure and Capital Projects at Deloitte East Africa, told journalists in Nairobi. In the East Africa region, the Chinese companies are mainly carrying out various infrastructural projects in different sectors that include energy, transport and real estate as relations between the East African nations and China soar. The most famous project in Kenya is the Thika Superhighway constructed at a cost of 330 million US dollars. The road cemented China’s construction authority in Kenya, and introduced the Chinese to the ordinary Kenyan. China is also constructing the Standard Gauge Railway whose construction has started and...

China accounted for over Sh1.8 trillion ($20 billion) worth of infrastructure development in East Africa last year, indicating the country’s growing influence in the region’s infrastructure development. New data shows that the Asian dragon’s share of the region’s Sh5.4 trillion ($60 billion) large infrastructure projects almost doubled from 19 per cent in 2013 to 31 per cent in 2014. According to the third edition of the annual Deloitte African Construction Trends Report 2014, China continues to bolster its lead in bagging mega-construction tenders in the region. “In terms of construction, China is still leading and maintains a strong foothold,” stated Mark Smith, head of infrastructure and capital projects at Deloitte East Africa. In 2013, Europe and the US accounted for 37 per cent of infrastructure construction but this share has since shrunk to 18 per cent in 2014. The report states that the number of mega-construction projects in East Africa declined by 55 per cent with the value of the same shrinking by 10 per cent, from $67 billion (Sh6 trillion) to $60 billion (Sh5.4 trillion). “Our view is that while there has been a dip in current activity, there are a large number of significant projects in the planning phase that have not yet reached financial close and are thus not yet reflecting in the statistics of projects under construction,” explained Dr Smith (pictured). In East Africa, transport projects took the bulk of the infrastructure spend accounting for 59 per cent of the projects with energy projects accounting for...

East African member states have been advised to make critical assessment of single income tax rates. A law expert, Anatoly Nahayo said recently in Dar es Salaam after launching his book titled “East African Community Tax Harmonisation.” He said the move will ease allocation of capital shares within EAC member states especially mobile capital. “Member states should find ways to agree in this matter. Otherwise, it will be difficult to shift to a common market effectively,” he said. Elaborating, he said, currently, ministers of finance in the member states have been given power to exempt tax and no one has to judge. He also said the EAC member states should debate on tax harmonisation and put in place laws that will govern it. He said there are many challenges that need to be addressed so as to create fairness particularly in employment around the bloc whereby workers move from one country to another in search of a job. There are double charges recorded to the workers moving from one country to the other especially rates charged on pensions and charged in general. Nahaya explained that if checked, all workers moving to another country within the bloc will be charged the same tax rates. Nahana further said there is no democracy to protest the decision of finance ministers to exempt individual businessmen or company. “It’s high time our local experts addressed national issues in the EAC. Currently, there is no tax harmonisation in the regional bloc,” he said. On April 9,...

Tanzania Ports Authority (TPA) stakeholders have hailed the authority for its decision to strengthen partnership with them, saying it will improve ports’ services. Speaking during TPA stakeholders’ meeting in Dar es Salaam recently, they said the move is commendable and should be maintained for the benefit of both parties and the country at large. Chairperson for the National Steering Committee, Electronic-Single Window System, Otieno Igogo told journalists that strong partnership between the two parties will help make Tanzania’s ports especially the one in Dar es Salaam more competitive. “We are happy about this... we hope that this renewed partnership will be sustainable,” he said, promising to continue support TPA. For his part, Spokesperson for Tanzania Trucks Owners Association (TATOA), Elias Lukumay said the private sector has a lot to offer in today’s business environment, “we have a great role to play as private sector and TPA’s stakeholders... this is why closer working relations with TPA are crucial.” Lukumay said addressing challenges facing the port and improving services should be the ultimate goal of both TPA and its stakeholders. Tanzania Shipping Agency Association Chairman, Emmanuel Malya said the global shipping industry is changing fast and therefore closer partnership with TPA can help utilise such changes for the benefit of the country. “We can learn about new technologies in the industry and how we can benefit through such partnerships,” Malya said, advising TPA to make sure that it becomes the best and biggest port service provider in East and Central Africa as...

The impact of the deadly Ebola virus has fallen mainly on three African countries but tourism has taken a hit across the continent, tourism chiefs say. About 56 million people visited Africa in 2014, a two-percent rise from the previous year, according to UNWTO figures. However, growth lagged behind that in Europe, Asia and the Americas. And the increase was also down on the robust 4.8 percent gain a year earlier. "Africa has done well in spite of suffering from the Ebola symptoms which were associated unfairly" with Africa as a whole, UN World Tourism Organization (UNWTO) head Taleb Rifai said at the Berlin tourism fair (ITB) on Friday. Africa needed support, especially after the Ebola crisis, he said, adding: "It was very unfair the generalisation that happened." Marie France Adieme-N'Dja, of Ivory Coast's tourism office, said Ebola had created panic. "We have operators who have had cancelled bookings because of the fear of Ebola. However, in Ivory Coast there has not been a single case," she said. Showing off its nine national parks and 550 kilometres of sunny beaches, the Ivorian tourist office is one of many African stands at the ITB trying to woo back visitors as the epidemic appears to have been brought under control. Almost 24,000 people have been infected with the Ebola virus since December 2013, almost all in Liberia, Guinea and Sierra Leone, and 9807 of them have died, according to the WHO. The countries at the centre of the epidemic are forecast to...