The flourishing economic cooperation between Uganda and Tanzania is gaining traction in seeking to boost trade and investment opportunities. The two countries continue to strengthen their bilateral relations to open new possibilities of doing business and expanding their GDP as well as economic performance in the regional bloc. The recently signed Uganda – Tanzania Joint Permanent Commission (JPC) Ministerial meeting is a fundamental factor in improving the ease of doing business between the two parties. During the second phase of the summit held in Kampala, Uganda both countries finalized matters concerning the energy sector signing the Memorandum of Understanding (MoU) to support the industry. The JPC is a potential platform for enhancing and consolidating bilateral cooperation frameworks between the two countries. It brings together companies and business people from both Tanzania and Uganda consisting of manufacturers, importers, exporters, clearing agents and transporters to discuss opportunities for trade between the two countries, and identifying challenges to be resolved. According to Uganda’s Ambassador to Tanzania Mr. Richard Kabonero, the signing of critical agreements covering trade, and railways between Uganda and Tanzania increased cross-border trade and reduced the cost of doing business. The gesture should be bait to lure more investors into seizing the opportunities available for business. Tanzania Communications Minister Harrison Mwakyembe praised Uganda’s relations with Tanzania which he said “continue to grow from strength to strength” as evidenced by landmark bilateral trade agreements signed recently. They have experienced healthy trade relations with historical linkages over the years. President Yoweri Museveni and...

THE East African Community (EAC) will join other regional economic communities for a Tripartite Transport and Transit Facilitation Programme (TTTFP) validation workshop for cross border road transport agreements, model laws and regulations in Eastern and Southern Africa slated for Addis Ababa, Ethiopia next week. TTTFP’s goal is to assist EAC, the Common Market for Eastern and Southern Africa(COMESA) and the Southern African Development Community (SADC) member states to harmonise road transport laws, policies, regulations, standards and systems. Funded by the European Union (EU), the programme is coordinated by a Programme Management Unit hosted by SADC Secretariat on behalf of the Tripartite. According to a statement released by the EAC Secretariat, the programme is relevant for the Agenda 2030 as it not only contributes primarily to the progressive achievement of Sustainable Development Goal number nine but also promotes progress towards the goal. This does not imply a commitment by the Member States of SADC, COMESA and EAC benefiting from this programme. The overall strategic objective is to facilitate the development of a more competitive, integrated and liberalized regional road transport market in the East and Southern African region. The project purpose is to develop and implement harmonized road transport policies, laws, regulations and standards for efficient cross border road transport and transit networks, transport and logistics services, systems and procedures in the East and Southern African region. Target participants in the workshop are experts from 21 beneficiary member states representing Ministries and Government Agencies. Fifteen other regional subsidiary organisations with a...

Traders in landlocked states in East Africa are pushing for a single customs bond guarantee scheme for the whole region amid concerns that high cost of complying with Kenyan and Tanzanian laws have raised their cost of production. While the region operates as a single customs territory, Tanzania does not recognise the Common Market for Eastern and Southern Africa (Comesa) Customs Bond Guarantee Scheme which shippers execute at the Mombasa port to move goods through Kenya, Uganda, Burundi, Rwanda and South Sudan. Tanzania is the only East Africa Community (EAC) state that does not belong to the Comesa trading bloc, having opted to integrate its market with Southern Africa Development Community countries. That means a trader who orders goods through Dar es Salam will have to execute a Tanzanian security bond then revert to either national or Comesa one after crossing the border. “Manufacturing in a landlocked country that imports nearly everything through Kenya or Tanzania is a real challenge,” said Mr Salim Somji, chairman of Burundi-based Siphar S.A, a pharmaceutical manufacturer. “When everyone is thinking of competing in the expanded EAC market, we can only think of competing in other landlocked states of the region.” Regional customs bond guarantees ensure that the government is able to recover duties and taxes from the guarantors should the goods in transit be illegally disposed of for home consumption in the country of transit. While Comesa bond is more expensive, with its value being at 0.5 per cent of goods on transit, traders...

THE Secretary General of the East African Community (EAC), Libérat Mfumukeko, has stressed on the need for EAC member states to work closely in order to improve road safety and transport infrastructure in the bloc. In his condolence message to Kenyan President Uhuru Kenyatta following the aftermath of the Kericho bus tragedy that occurred last Wednesday, the Burundian diplomat described the accident as a yet another call to all EAC partner states to continue to work together in curbing the scourge of road accidents. “We have lost too many lives in the recent past; this, therefore calls for an urgent need for member states to continue to work together improving transport infrastructure,” he observed. In the same vein, the secretary general commiserated with the families that lost their loved ones in last Wednesday’s tragic road accident at Fort Ternan in Kericho, which 56 people perished. “On behalf of the EAC and on my own behalf, I convey my heartfelt condolences to your Excellency, and through you to: the bereaved families, relatives and friends of the passengers, the government and the people of Kenya,” condoled the EAC secretary general. According to estimates by TradeMark Africa (TMA), road fatalities are said to reduce the economic output of EAC countries by about $115.6 million per year assuming average productivity per person lost to a road traffic fatality. The people lost would more than likely have long lives resulting in an estimated $5 billion worth of lifetime productivity from each year’s cohort of road...

Windhoek – Ports in Southern Africa are not upfront with their terminal handling charges, which makes the ease of doing business in the region difficult and the hidden cost thereof ridiculously expensive, says Ed Richardson, Freight and Trade Weekly correspondent. Richardson said while a growing number of ports in the Southern African Development Community (SADC) region is open to negotiation on charges, some simply do not respond to requests for information and information seekers have to rely on the World Bank for available data. This, he said, is due to the heavy competition experienced by the different transport corridors where there is no harmonisation of tariffs or political will to unify trading across borders. He stressed that ports that have invested in certain routes for over 100 years and have depots there would never advise a customer to go through another port. There are huge variations in terminal handling costs in the six ports in SADC countries, namely Namibia (Walvis Bay), Mozambique (Maputo, Nacala and Beira), South Africa (Durban) and Tanzania (Dar es Salaam). According to figures provided, the Walvis Bay port is unusually expensive, with double or three times higher tariffs, followed by Maputo and Durban, while the Dar es Salaam, Maputo, Nacala and Beira’s costs, which are the lowest, are on average similar. For example, for handling 20 feet cargo in transit, the Walvis Bay port charges US$216.88, while Maputo and Durban would handle the same cargo for US$148 and US$123, respectively. This is in stark contrast to...

After 20 years of bitter conflict, the border between Eritrea and Ethiopia is officially open for business and merchants are trading freely across the former war zone. Where soldiers stared each other down as recently as six months ago, a relaxed army presence now watches horse-drawn carts and buses full of visitors, as trade and tourism crosses the border of Africa’s longest-running conflict. Business booms between former rivals Merchants in the disputed territories once fought over between Eritrea and Ethiopia are now enjoying the benefits of open trade and a huge spike in the movement of people. For two decades, little more than soldiers, refugees and rebel fighters moved across the closed border between the two countries. However, now goods and people are free to cross the border, filling merchant shelves with goods that were previously out of reach. More importantly, the peace deal between Eritrea and Ethiopia has transformed a barren war zone into a border bustling with activity and potential customers for merchants to sell their product to. There are some early concerns developing from the open border, though. The business boom is accompanied by a surge in the number of Eritrean refugees crossing the border into Ethiopia in a bid to escape the repressive regime of Isaias Afwerki. There are also problems for Ethipiopian traders dealing with their new Eritrean partners, who have to deal with the unstable value of the Eritrean nakfa and unregulated exchange rates. While both governments have said they hope renewed trade will boost their economies,...

A push by Tanzania and Uganda to have their own tea auction could destabilise incomes, coming at a time that production and prices in the region have been falling. Last week, Tanzania said it was planning its own tea auction in Dar es Salaam. Uganda had in March this year, said it was planning to market its own tea directly to buyers as it sought better prices, effectively pulling out of the Mombasa auction, the second largest in the world, after Colombo. Kampala has since rescinded the decision. Kenyan tea industry players, however, believe that the two countries’ push for another auction outside Mombasa, which serves the region, with offerings from at least 10 countries as far afield as Madagascar, Zimbabwe and the Democratic Republic of Congo, is infeasible due to low volumes from those two markets. Uganda’s concerns emanate from what it says is loss of identity of its tea once it enters the Mombasa auction, as it is labelled as Kenyan. “Once our tea is exported through Mombasa, it loses identity because it lacks the proper packaging. This means it inherits Kenya as the origin in the export market, losing its identity to the advantage of Kenya,” said Othieno Odoi a, senior planner in charge of trade at Uganda’s National Planning Authority. Mr Odoi added that the country is yet to complete the feasibility study that would determine whether the market would be viable for a Kampala auction. “We are also tied down by some challenges, including transportation....

In March 2018, African heads of State gathered in Kigali to launch an initiative that will increase the level of intra African trade. The United Nations Economic Commission for Africa (UNECA) points out that the African Continental Free Trade Area (AfCFTA) is a move in the right direction for the continent, as it will cover a market of 1.2 billion people and a gross domestic product (GDP) of $2.5 trillion, across all 55 member States of the African Union. In terms of numbers of participating countries, AfCFTA will be the world’s largest free trade area since the formation of the World Trade Organisation. Considering that informal cross border trade (ICBT) is a source of income to about 43 per cent of Africa’s population, boosting informal cross border trade on the continent is an integral part of achieving sustainable development. Further, small and medium-sized enterprises account for around 80 per cent of the region’s businesses. UNECA also indicates that women are estimated to account for around 70 per cent of informal cross border traders in Africa and are exposed to challenges such as harassment, violence, confiscation of goods and even imprisonment. By and large, ICBT is largely practised by the officially unemployed and micro, small, and medium-sized enterprises, and is therefore also important for strategies of inclusion. An example of an intervention that is worth mentioning is one by TradeMark Africa (TMA) in a project in Rwanda aimed at increasing the economic power of women in informal cross-border trade. The project...

Fourth G20 Summit that saw over 55 heads of delegation attend came to close on Friday after a two-day meeting on the sidelines of IMF and the World Bank annual meetings with Argentine Minister of Treasury Nicolás Dujovne underscoring the progress made by member states. “We have discussed the outlook of the global economy, which remains positive, while global growth projections remain steady. However, the expansion has become less even across economies, and some of the downside risks that were discussed earlier in the year are starting to materialize,” Dujovne held. Dujovne said that monetary policy was normalizing in advanced economies while emerging ones were experiencing rigid financial conditions while other markets were experiencing market instabilities. The representatives from the G20 agreed to cooperate so as to sustain global financial stability. He said, “We agreed that international trade is an important engine of growth, and we need to resolve tensions which can negatively affect market sentiment and increase financial volatility.” 20 finance ministers, 17 central bank governors and 10 heads of international organizations attended the occasion in Bali, Indonesia which was chaired by Nicolás Dujovne, Argentine Minister of Finance and Verónica Rappoport, Second Vice-president of the Argentine Central Bank. IMF managing director Christine Lagarde and Jim Yong Kim, President of the World Bank Group also attended the conference where discussions on threats to global economy, trade tensions and financial susceptibilities took place. Before the close on Friday, discussions around developing infrastructure as an asset class took place to promote private...

After decades of unabated downturn, rail transport is steadily bouncing back, thanks to technological innovation, a shift in management approaches and effects of climate change. This has seen increased sensitisation on environmental issues. But in Africa, this renaissance has encountered some bottlenecks, owing to inadequate government commitment in some countries. The African Development Bank (AfDB), in its 2015 report titled Rail Infrastructure in Africa: Financing Policy Options, said Africa is experiencing an unprecedented economic recovery, with strong growth projections over the next three to four decades. According to the report, the growth was driven by a fast-growing demographic and large-scale urbanisation. The operation of new mines, gas and oil fields, as well as the increase in intra-regional and international trade, were additional growth factors. Notably, the transport sector can accelerate and intensify trade in Africa. Rail transport, in particular, as a result of its energy efficiency, reduced greenhouse gas emissions and lower cost per tonen kilometre, is expected to play an increasingly important role in the conveyance of freight over long distances. In comparison to other means of transportation, railways are particularly useful in mass transit systems for both inter-city and urban settings. Investment But even as Africa becomes more and more attractive as a destination for infrastructure financing in many sectors such as energy, telecoms and transportation, investment in railways is still small compared with other sectors. This calls for more institutional reforms and more mature financial markets to up-scale the implementation of new approaches to infrastructure finance commonly...