The Chinese government's move to cut taxes will further open the floodgates for cheap imports into Kenya, dealing a blow to local manufacturers. The three-year programme will see corporate-income, value-added and other corporate taxes for small and medium enterprises (SMEs) reduced, with the country's Central Bank cutting the amount of reserve a bank should maintain so as to release more money for lending. The move will enable Chinese factories to produce goods at far much lower costs, giving them an edge in the global marketplace. This comes as latest statistics show that China is Kenya’s largest source of imports for machinery and transport equipment, accounting for Sh291.8 billion. It's followed by India at Sh161.2 billion, Saudi Arabia (Sh138.4 billion) and UAE (Sh126 billion). With a conducive environment back home, Chinese companies could launch a trade offensive against Kenyan companies reeling from high energy costs, punitive licensing regimes, cheap imports and high taxes. In an interview, the Kenya Association of Manufacturers (KAM) Chief Executive Phyllis Wakiaga said the trend is worrying since Kenya’s import bill increased by 20.5 per cent from 2016’s Sh1.4 trillion, to Sh1.7 trillion and Sh25.6 billion in 2017. And the last 10 months of 2018, goods worth Sh997.1 billion came compared to Sh291.8 billion worth of exports, hurting Kenya’s quest of finding a home-grown solution that promotes local manufacturing and hence more exports. KAM said continued importation of goods, even those made locally, makes no sense of the government's plan to promote Kenyan firms. KAM noted that...

The biggest irony of poultry farming business in Kenya is that even as traders are busy importing eggs from Uganda, their counterparts are exporting chicks to that country. A roaring export trade of day-old chicks is erupted on the Kenya – Uganda border with the young birds destined not only for Uganda, but also Rwanda, Burundi and Democratic Republic of Congo (DRC). The truck transporting the chicks are ferrying them through Malaba and Busia border points to importers mostly based in Jinja, Kampala, Kigali and various towns in the DRC. Most of the chick exports are coming from poultry farms in Nakuru, Uasin Gishu, Kericho, Kisumu, Kakamega and other counties, but ironically not Busia county right on the Kenya – Uganda border. Kenya Revenue Authority (KRA) officials, both in Malaba and Busia, say between 5,000 to 10,000 day-old or slightly older chicks are exported daily to these regions due to high demand in those markets. “It is true we clear these delicate cargoes daily destined for markets in Uganda, Rwanda, Burundi, and even DRC. They are delicate cargo whose clearance to cross the border cannot be delayed for long,” a senior KRA official Joseph Owino said. He said the exports of the chicks from Kenya to these destinations started sometimes in late 2017 but by the end of last year had remarkably increased. Owino confirmed that most of the exports are coming from poultry farms in various parts of the country, even from central Kenya, there is virtually none from...

Kampala. Uganda exported more goods to Kenya than any other country in the East African region in the period running between January and September 2018. Exports to the country in the period under review stood at Ush1.5 trillion compared to Ush908.7 billion in 2017. The growth was driven by increased reliance on Uganda for maize supplies in the period under review. Tanzania’s exports to Kenya stood at Ush820 billion down from Ush768 billion while Rwanda exported goods worth Ush499 billion from Ush483 billion in the period. Uganda accounted for 70.36 per cent of the nearly 419,548 tonnes of Kenya’s maize imports, an equivalent of about 4.66 million 90-kilogramme bags, in the five months leading to May, according to data from Kenya Revenue Authority. However, imports from East Africa’s largest economy to Uganda were slightly higher standing at Ush1.7 trillion, a slight decrease from Ush1.73 trillion in 2017. Uganda has in the last five years decreased its trade deficit with Kenya, which at some point had stood at more than Ush500 billion. On the whole, the value of Kenya’s imports from neighbouring countries jumped by 42.64 per cent in nine months through September amid flat growth in exports. Kenyan traders trucked in goods worth Ush2 trillion within East Africa compared to Ush1.4 trillion in the same period in 2017. This was largely due to Kenya’s reliance on her neighbours for food supplies such as maize. Data collated by the Kenya National Bureau of Statistics, indicate imports from EAC countries increased by...

As Africa’s ministers of Trade met in Cairo between December 12 and 13, last  year, there was a lot to celebrate. Within nine months of its coming into being on March 21, 2018 in Kigali Rwanda, the African Continental Free Trade Area has been ratified by 13 countries. Only nine more countries are needed to reach the required 22. This will enable the second ratification instrument for the Agreement to come into force, and for the free trade area to be formally launched at the next African Union Summit next month. With this imminent entry into force, priority has now rightly shifted to fast tracking implementation of the agreement so that economic operators can actually utilise the expected trade and investment opportunities. On the shelves The issue is, Africa has been good at adopting agreements and taking numerous decisions, but very bad at implementation. The African Free Trade Area should not join this lot of instruments that remain on the shelves, hardly of any value in the end. Fortunately, some work has been done to publicise the African Free Trade Area around the continent and the world. The communication and visibility strategy mounted by the African Union and its partners has been effective in mobilising and reaching out to political leaders, the media, civil society, the private sector and academia. Though many have heard about the initiative, good knowledge of the rules of the game will be important to facilitate actual utilisation of the trade and investment opportunities. Long term and executive...

According to a statement, the service expands the ocean carrier’s presence in East Africa, a growing region and key market for Maersk’s customers. The first sailing of the Musafir Express departed from Salalah on December 29, 2018, before arriving in Mogadishu on January 3, 2019. The bi-weekly service connects Somalia to the rest of the world, allowing the country to expand its trading links within Africa and across the Middle East, Europe, and the Far East. Mads Skov-Hansen, Area Managing Director for Maersk in Eastern Africa, commented: “Having listened to our customers, we are truly excited to finally add Mogadishu to our global network. “What is equally exciting is that Maersk and Safmarine, with our experienced Somali partner, can offer a broad selection of inland logistics solutions to our local and international customers.” In 2017, imports into Mogadishu grew by 12%, and container traffic is expected to rise by a further 15% during the period of 2018 to 2019. The economy of Somalia is currently undergoing accelerated growth, strongly supported by increasing import trade through its ports. Skov-Hansen also discussed the improved access to trade corridors throughout Africa: “Aside from offering customers convenience, on-time delivery and safety, the Musafir Express will allow us to add more value to customers’ business. “By connecting our customers to the growing potential and opportunities in Somalia, we help accelerate growth for their business.” Source Porttechnology

Informal cross-border trade in Sub-Saharan Africa offers a great deal of untapped potential to feed, integrate and industrialize the region, the African Development Bank (AfDB) has affirmed. According to TradeMark Africa (TMA), an organisation works closely with East African Community (EAC) institutions to increase trade by unlocking economic potential, Cross Border Trade (CBT) plays an important role in poverty reduction. TMA argues that it provides trading opportunities for a good number of people. TMA notes that in places like Rwanda, women are the most active traders along the country’s borders. In fact, EAC Partner countries recognize that women make a significant contribution towards the process of socio-economic transformation and sustainable growth. The States agree that it is impossible to implement effective programmes for the economic and social development of the Partner States without the full participation of women. A study by the United Nations Food and Agriculture Organization in 2017 found that 70% of informal traders in the Southern African Development Community (SADC) region are women. In West and Central Africa, informal cross-border trade among women represents more than 60% and generates about 40 to 60% of the Gross Domestic Product (GDP) of the countries concerned. This cross-border trade, which is driven by increasing population, growing urbanisation and agriculture, provides the foundation for a diversified and globally competitive economy. The baseline studies, which were conducted in recent years in Sub-Saharan regional economic communities have demonstrated the positive impact of informal trade at both the macro and micro levels. “Due to...

For millions of ordinary travellers, inter-African travel is still too often a nightmare. Be it border hassles, lack of road or air routes linking key cities, or the frustrations of being refused entry to a country because of visas, the end result is to curtail the free movement of people, viewed by the African Development Bank as one of the pillars of regional integration. That freedom of movement is inextricably tied to the Bank’s vision to create the next global market in Africa. As the Africa Economic Conference opens in the Rwandan capital Kigali, the theme this year:  Regional and Continental Integration for Africa’s development,” also aligns with another major Bank priority - placing infrastructure development at the centre of Africa’s regional integration efforts. Host nation Rwanda has taken bold leadership steps to champion regional integration, announcing at the beginning of this year an entry visa on arrival for travelers from all African countries. The third edition of the Bank’s Visa Openess Index, to be launched on day two of the meeting, will be an important opportunity to measure which countries are making improvements that support free movement of people across Africa. “The Index has helped raise awareness and drive visa policy reforms across the continent to ease movement of people, unlocking opportunities for intra-African tourism, trade and investment.  In so doing, the Bank is directly contributing to the objectives of the AU initiative for a Single African passport,” Gabriel Negatu, Bank Director General, East Africa Regional Development and Business Delivery...

Energy infrastructure like transportation – the skeleton for the development of any other kind of infrastructure – is the bloodstream that pumps energy into different enterprises for economic development. This premise relies on energy being tradable and interdependable whereby one country can rely on the energy infrastructure of another. Furthermore, the stability and growth of a country’s energy infrastructure and regulatory landscape is the magnet that attracts investments without which countries find themselves limited by stunted socio-economic growth. Investment in electricity is a discreet national economic goal, which is worth prioritising not only for industrialisation aimed at boosting economic development but also as a vital contributor for technological advancement in any country. Unlike other public sector assets, like roads, water supply and clean air that everyone benefits from, energy infrastructure ceases to be a public good when it is being demanded and consumed individually. In this modern smarter world, customers are able to view their usage of electricity through mobile devices, the internet, special remote home sensors and monitors. On the supply side, utilities do the same through meter data management systems. Enhanced through technology applications, the supply of energy becomes a product that is exportable to neighbouring countries. It is when the energy supplied to other countries (as in the case of Uganda with Tanzania and South Sudan) that the revenue generated and accrued from the energy exported becomes indirectly a public good – but only if the state effectively recapitalises it in further investments. The energy sector is...

Africa’s integration is no longer a matter of choice. Against an international backdrop of changing political and economic priorities, Africa must plot a new course for its industrialisation and economic development, using the momentum of regional integration. For Africa, a vast continent of over 1.2 billion people, integration has considerable potential not only for promoting robust and equitable economic growth through markets, but also for reducing conflict and enhancing trade liberalisation. Development economists, policymakers, African and non-African researchers are meeting in Kigali, Rwanda this week to discuss the shape and future of continental integration at the 13th African Economic Conference (AEC). Convened on the theme, “Regional and Continental Integration for Africa’s Development”, the three-day event will explore proposals for enhancing the broad and inclusive integration of African economies. The build-up to the conference began in March 2018, when 44 African countries committed to the launch of a common market for Africa - the African Continental Free Trade Area (AfCFTA). This followed the launch of an African Common Passport in July 2016. The African Continental Free Trade Agreement seeks to bring Africa into the global trade environment as one continent rather than as individual countries. Recent research by the African Development Bank shows that intra-African trade is the lowest of all global regions at approximately 15%, compared to 54% in the North American Free Trade Area, 70% within the European Union and 60% in Asia. The Organization of African Unity and its successor, the African Union, have championed continental cooperation since...

Rwanda is hosting the African Economic Conference. The three day conference is expected to cover an array of issues aimed at unlocking the bottleneck to full regional integration. Speakers at the conference are drawn from the academia, government, private sector, development partners among others. Denis Karera, Vice Chairperson for the East Africa Business council spoke to CNBC Africa on key lessons the rest of Africa can learn from the East African Community integration process. Source South Africa