REVENUES from custom duties could shoot up to 5trl/- per annum from the current 3.9trl/- had it not been for tax evasions by some unscrupulous importers as well as regional protocols that offer zero tariffs on some commodities, it has been observed. The Tanzania Revenue Authority (TRA) collected 3.9trl/- from custom duties in 2013/2014 and it has set a target of 4.6trl/- for the current fiscal year. The duties account for about 38 per cent of all revenues collected by the tax body. Appearing before the Parliamentary Public Accounts Committee (PAC) in Dar es Salaam on Tuesday, the TRA's Commissioner General, Mr Rished Bade, was optimistic that the duties could hit the 5trl/- mark, save for tax evasions and the protocols. The regional protocols in question are those signed among members of the East African Community (EAC) and the Southern African Development Community (SADC). Through the agreements, some commodities pass through Tanzania untaxed to those countries. "By the half of this fiscal year (December 31, 2014) we managed to collect 2trl/- which is almost the amount we collected in 2011/2012. We hope to collect the remaining amount of 2.6trl/- as per our target by the end of the financial year," Mr Bade explained to members of the committee. PAC member Esther Matiko (Special Seats- Chadema) noted with alarm that during the financial year 2011/2012, the TRA collected custom duties amounting to 2.97trl/- while at the same time there were exemptions to the tune of staggering 930bn/-. "This means that in...

The search for home-grown innovations that could cut the cost of transport in East Africa has gained momentum with the recent launch of a Sh1.4 billion ($16 million) fund targeting logistics firms. The Logistics Innovation For Trade (Lift) fund launched by Trade Mark East Africa (TMA) in November will up to the end of February be receiving proposals on how firms intend to trigger their innovation verve to boost efficiency in cross border trade. The winning proposals will get grants of between Sh18 million ($200,000) and Sh67.5 million. Targeted firms include vehicle and equipment manufacturers, agricultural produce importers, educational institutions, clearing/forwarding companies, freight tracking systems, barge operators, and shipping and financial services institutions. Civil society organisations that advocate for regulatory and structural reforms to boost competition will also compete for grants of between Sh9 million and Sh18 million. The call for proposals comes hot on the heels of a recent study that found that East Africa had the second highest freight logistics costs on the continent, accounting for 42 per cent of the total value of imports. “These costs seriously erode the marginal competitiveness of goods exported by East African countries and raise the cost of living, reducing trade, economic growth, job creation and poverty reduction,” said Nelson Karanja, communications manager at TMA. Mr Karanja said road transport accounts for 95 per cent of freight traffic in the region and this is unlikely to change much even with the standard gauge railway. “Even if rail is cheaper, unless loading and...

Turkey's moves to gain more influence in African trade is “at the point of no return” and “should go on” despite the presence of giant competitors on the continent. This was the view of economic analysts speaking ahead of President Recep Tayyip Erdogan's 12-country-African visit starting this week. Erdogan will begin the first visit of 2015 by visiting two East African states – Ethiopia and Djibouti. Turkey has increased its interest in the largely developing Sub-Saharan countries in the last decade and has had a significant impact in the Horn of Africa region. Sedat Aybar, an economist from Istanbul's Aydin University, said Turkey is at the “point of no return” in the region and its opening-up to Africa should be supported for the country to reach "the strategic place Turkey has drawn for herself as a global player in world affairs." Turkey has opened 27 more embassies in African countries since 2002, mainly in the Sub-Saharan region – a signal of its diplomatic focus – while Turkey's cooperation agency, TIKA, has nine offices in the region. The second Turkey-Africa Partnership Summit was held in Nov. 2014 in Malabo, the capital of Equatorial Guinea, six years after the first one in 2008; this period has seen Turkey become one of the largest donor countries with an aid volume nearing $1 billion, according to Aybar. The national flag-carrier, Turkish Airlines, now has flights to more than 42 destinations in 27 African countries. Between 2005 and 2013, Turkish trade with Sub-Saharan nations increased...

Egyptian private-equity company Qalaa Holdings SAE is investing $70 million to accelerate the movement of rail cargo carried from East Africa’s busiest port, as it faces competition from a new Chinese-backed link. Qalaa controls Rift Valley Railways Ltd., the operator of a railway built almost a century ago running from Kenya’s Mombasa port to neighboring Uganda. It covers a portion of the same route as a new rail line under construction from Mombasa, designed to speed up freight-transit times, cut transport costs and boost mining and agricultural exports. It isn’t yet clear who will operate the second railway. Qalaa “is investing heavily in a new subsidiary, which will complement RVR by handling cargo at the port of Mombasa in Kenya,” Karim Sadek, managing director of the company’s transportation division, said in an interview from Nairobi. In neighboring South Sudan, Qalaa, through its Nile Logistics arm, plans to acquire additional handling equipment for its river-transport and marine-port businesses, he said. Its service, operating a fleet of barges between the north and south of the oil-producing nation, was disrupted in December 2013 when a power struggle in the ruling party sparked civil war. Tens of thousands of people have died and almost 2 million others have been driven from their homes as the violence continues, according to the United Nations. About 1.5 million people are receiving food aid, less than a quarter of those in need, amid funding shortages and due to bad roads, which are inaccessible in the wet season, according...

The realisation of a large regional economic bloc with a combined population of more than 141.1 million people, land area of 1.82 million square kilometres and a combined Gross Domestic Product of $99.8 billion, bears great strategic and geopolitical significance and prospects of a renewed and reinvigorated East African Community (EAC). The EAC aims at deepening economic, social and political integration and enhance the region’s competitiveness through enhanced value chain, trade and investments. To achieve such goals, the EAC countries established a Customs Union in 2005 and a Common Market in 2010 which provides “four Freedoms” namely, free movement of goods, labour, services and capital, to significantly boost trade and investments and make the region more productive and prosperous. EAC Partner States also qualify for duty-free access to the US market under the African Growth and Opportunity Act (AGOA), as well as European Union (EU), and the Common market of Eastern & Southern Africa (COMESA). Reforms and a growing participation in global trade has helped the EAC region to grow. It has been the second fastest growing economic bloc in the world in recent years with an average growth of 5.8% in 2012 (behind ASEAN at 6.1%) which is the best rate of growth in the Sub-Saharan Africa region. Tanzania, Uganda and Rwanda showed a robust annual growth of over 7% from 2002 to 2012, and the total FDI inflow in the EAC region has almost tripled from $1.3 billion in 2005 to $3.8 billion in 2012. All countries in...

The East African Community (EAC) has been advised to set a target for intra-EAC trade growth for this year of 15% by promptly eliminating Non-Tariff Barriers (NTBs). Peter Kiguta, the Director General Customs and Trade at the EAC Secretariat was speaking at the 16th EAC Regional Forum on NTBs held recently. He suggested the Chairpersons and Co-Chairpersons of National Monitoring Committees (NMCs) to exchange their contacts in order to redress NTBs when reported instead of waiting for the Regional Meetings. He said the share of the intra-EAC has continued to decrease over the years recording less than 12% growth in 2013 compared to 2008 when it recorded 12% growth. “This calls for measures to be put in place to redress the decline which include elimination of NTBs affecting Intra-EAC trade as the EAC Partner States were trading with the rest of the at 88% compared to the European Union which was trading at 2% and Asia at 40%,” Kiguta said. Kiguta underscored that this scenario has led to loss of revenue which is needed to finance infrastructure and other socio-economic projects and the exportation of jobs. He further informed the meeting that the 30th Meeting of the Council had adopted the draft NTBs Bill and forwarded it to the East African Legislative Assembly for enactment into the law, it is expected that to complement the work of National Monitoring Committees and the EAC Regional Forum on elimination of NTBs. Kiguta further said that the implementation of the one stop Border...

Following the signing of the Monitory Union Protocol on November 30, 2013 in Kampala Uganda, by the five EAC Heads of State, the Council of Ministers has many times discussed how to implement this signed protocol. Arguments have been tabled some saying that the 10-year roadmap should guide the implementation process others preferring to have macro-economic issues among EAC Partner States to be converged first. Why Financial Market integration? The very first motive for Financial Market integration is one that explains the origins of monies in human societies: the demand for a means of exchange of goods and services that breaks the double coincidence of wants constraint of the barter system. In this regard, two or more countries willing to promote bilateral trade could initiate monetary integration in order to reduce uncertainties on the bilateral exchange rate of their currencies, and secure settlements among cross-borders commercial partners. More often, as in the case of the EAMU, monetary integration is a part of a more global aim, regional economic and political integration. Therefore, from the simple motive of trade promotion, to the high vision of a single political area, monetary integration may take various forms; a clearing arrangement, a payments union (this form reinforces the clearing arrangement with medium-term credit facility for balance settlements), a reserve pooling arrangement, and subsequently a complete monetary union. It is important to note that all EAC Partner States share a clear mind that a Monetary Union will ease cross border business and help in advancing...

East African Community (EAC) partner states made significant progress in furthering regional integration during 2014. The EAC Secretary General, Dr. Richard Sezibera said, the EAC made rapid strides by ratifying and implementing several protocols and agreements. “The Single Customs Protocol has been properly implemented in the northern and southern corridors,” he told a news conference at the EAC’s Arusha headquarters last week. The northern corridor runs from the Kenyan port city of Mombasa to Ugandan capital Kampala, before continuing on to Rwandan capital Kigali. The southern corridor runs from the Tanzanian port city of Dar es Salaam to Burundian capital Bujumbura and Kigali. Briefing the media on the EAC’s achievements in 2014 and the way forward, Dr. Dr.Sezibera said the partner states had introduced a ‘single window’ at the two ports, which are the two main entry and exit points to the region. He said member states had also introduced an electronic cargo tracking system. “All documentation and transactions regarding the movement of goods are done at one point in order to reduce business costs and time spent,” he said. “By implementing the Single Customs Protocol, roadblocks and other non-tariff barriers have been reduced significantly within the entire EAC region,” he said. The Secretary General said during the 2014/15 financial year, member states have invested in major road and rail projects. Dr. Sezibera said, “While Tanzania, Rwanda and Burundi are investing in central railway corridor projects, which will also connect the region to the Democratic Republic of Congo (DRC), Kenya...

ARCHITECTS in Tanzania will today decide on whether or not to open the local market for other players in the East African Community (EAC), through the Common Market Protocol's Mutual Recognition Agreement (MRA). Tanzania is the only country in the region that is yet to ink the agreement. Four of the EAC member states namely Kenya, Rwanda, Uganda and Burundi signed the MRA way back in 2011 and thus allowing architects in those countries to practise their profession within the four countries, without subjecting them to further examination. Speaking at a news conference in Dar es Salaam yesterday, the President of Architects' Association of Tanzania (AAT), Architect Mbaraka Igangula, said members of the professional body will vote to decide if the country should sign the pact or not. When the EAC Common Market Protocol was introduced in June, 2010, it emerged that the architectural work was not among the professions the country opened to other EAC members. Tanzania did not ink the agreement then and promised to sign later. Asked on whether the AAT had conducted any study to ascertain whether the local players would lose or gain through the arrangement, he admitted that there was no research that was conducted regarding the matter. "There is no study which has been conducted but there are still fears among local architects that if we open our boarders we will lose the market to our counterparts in the region." "There will be a seminar in Morogoro tomorrow (today) in which experts from...

New machine readable East African Passports that will also allow holders to travel around the world, will be unveiled next November and start to be issued to citizens of Tanzania, Kenya, Uganda, Rwanda and Burundi shortly after. The new state-of-the-art electronic EA travel documents are to be officially launched by the five Heads of State during their forthcoming summit in Arusha on 30, November 2015, according to the Secretary General of the East African Community (EAC), Dr Richard Sezibera. The now fully upgraded new EAC passports have been made to fully comply with International Civil Aviation Organization (ICAO) standards, which means they can easily replace national passports among the residents of the five East African countries. The ICAO standardises and publishes Doc 9303, Machine Readable Travel Documents, which form the basis for the technical standard for machine-readable passports worldwide. Textual form is written as strings of alphanumeric characters, printed in a manner suitable for optical character recognition. Previous details of the applicant for the EAC passport are to be legible through computers while the signatures and holders' photographs will be acquired and digitally stored in both regional and international database. The old model of the EA passports introduced nearly a decade ago by Tanzania, Kenya and Uganda before the joining of the Rwanda and Burundi to the EAC four years ago, has the holder data typewritten or hand written on it. The old travel document being phased out now was meant to simply ease border crossings within the three member...