NAIROBI, KENYA: Pressure is pilling on Tanzania and Burundi to ratify tax harmonisation agreement signed eight years ago to boost trade among East African Community partner states. East African Business Council noted that slow pace in ratifying the document makes it difficult for Kenya, Uganda, and Rwanda to implement the agreement which would make it attractive for businesses to expand operations in East Africa. “We have witnessed a decline in intra-trade among the Partner States as many companies shy away from expanding within the region due to the fear of double taxation, this needs not to be the case as we have a document to address all these,” said Adrian Njau, East African Business Council Trade and Policy Advisor. “The EAC business community eagerly awaits harmonisation of domestic taxes in EAC and hopes to see in harmonization removal of tax distortions that hamper efficient allocation of resources within the Community and come in the way of free movement of goods, services, labor, capital, and investments within the Community,” he added. The East African Business Working Group on domestic taxes identifies several challenges in tax harmonisation among them reluctance of Partner States to move with speed and finalize the legal framework for tax harmonisation, and fear by governments that tax harmonization may deplete revenue base especially in the case of excise. Other challenges are reluctance by stakeholders to provide data that would enable the working group and government stakeholders to quantify the actual impact of tax harmonisation, Strong lobby by some...

Financial support from Germany to the East African Community (EAC) would from now largely focus on improved trade integration of the bloc. Another key priority would be on technical cooperation, it emerged during last week’s talks between the two sides. “The cooperation will continue in many areas with more focus on implementation to achieve tangible results”, said Dr Kirsten Focken, the cluster coordinator of GIZ-EAC Programme based in Arusha. She said during a meeting to plan the next phase of development support to EAC by the European economic powerhouse that new projects have to benefit regional integration. “We have to come up with clear and smart project objectives, outputs and indicators for the next phase of cooperation,” she said. The fourth phase of the multimillion euro EAC-GIZ Support Programme comes to an end in the middle of next year. The planning process for a new phase of the programme started last September with a series of appraisal meetings by the consultants. EAC deputy secretary general (Productive and Social Sectors) Christophe Bazivamo said the long-standing German support to the bloc’s integration would continue. “Implementation of the Customs Union and continued implementation of the Common Market will remain the core areas of support and cooperation,” he told the meeting. The support in the next phase of the programme would focus on economic sectors through regional cooperation and improved trade integration. According to the EAC secretary general, Amb Liberat Mfumukeko, Germany had supported the EAC to the tune of 290 million euros in...

Few modes of transport evoke such a sense of history and romanticism as rail. The first recorded use of rail transport was around 500BC, when ancient Greeks used a rail-like system – most likely powered by humans or horses – to carry boats across where the Corinth channel currently is. In the 1400s, German miners used wooden railways that were pushed by hand or pulled by horse. After the first iron rails were introduced in England in 1767, it took less than 40 years before Richard Trevithick built the first steam locomotive, also in England. In 1830, the world’s first regular steam passenger rail service was inaugurated by the Canterbury & Whitstable Railway. Africa’s first network of railways was started in Alexandria, Egypt in 1852. By 1860, South Africa had launched its first steam train, running from Central Durban to the Point, and by 1897 a railway line between Cape Town and Bulawayo in Zimbabwe was completed. In the early part of the 20th century rail lines were being constructed across the continent, connecting cities and countries in North, East, West and Southern Africa. Today, fast-growing economies across the continent are upgrading antiquated rail infrastructure to support improved regional trade and mass local transit. However, according to the African Development Bank, the poor condition of rail infrastructure and rolling stock in many African countries is undermining the potential of rail systems to contribute to economic development. Critical priorities for rail development in East Africa Governments and rail operators are responding...

Regional coffee growers, exporters and sector policy makers are turning their focus to domestic consumption, a move they say is intended to cushion them against fluctuations on the international market, which sometimes adversely affects their incomes. They were speaking Friday at the official launch of the 17th African Fine Coffee Conference and Exhibition (AFCC&E) in Kigali. The event is running under the theme, 'Specialty Coffees at the Heart of Africa', and it is focusing production and marketing of high quality coffee. The event was organised by African Fine Coffees Association (AFCA) and Rwanda's National Agricultural Export Development Board (NAEB). About 2,000 people are taking part in the event, including coffee producers, exporters, roasters, policymakers and buyers from around Africa, the Americas, Europe, among other parts of the world. Samuel Kamau, the Executive Director of African Fine Coffees Association, said: "Local consumption is our future because we have to be self-sufficient. We cannot rely on donations. It creates the first base market for our farmers, so they do not have to worry about international prices going down." "For countries like Ethiopia, the prices on the international market are normally better than those on the international market. The international market has to pay more because (international consumers) are competing with the local people". Regional countries, he observed, can tap into the African Continental Free Trade Area, a deal signed in Kigali earlier this year with view to liberalise intra-African trade. "For instance, we want Rwanda to trade with Kenya, with Uganda and...

Non-tariff barriers remain the toughest headache for Comesa member states, and must be handled to clear way for free trade in Africa. Comesa Secretary general Chilese Mpundu Kapwepwe said there are also a number of sensitive products which member countries would not prefer to have tariffs removed, hampering the process to smooth harmonization of trade laws. “Once the restrictive barriers are harmonized, it will increase intra-trade among member countries,” she said on the sidelines of the heads of customs sub-committee meeting which ends today. The Tripartite Free Trade Area which should ideally harmonise the various trade groupings, has so far been ratified by 22 of the 26 member states of Comesa, East African Community and Southern African Development Community (SADC). The tripartite FTA brings together a population of 700 million people with an estimated Gross Domestic product of well over $1.4 trillion (Sh 140.9 trillion). It is looking to leverage on working recommendations for digital trade to see progress in the TFTA and the whole Comesa region. Identification, removal and monitoring of Non-Tariff Barriers to trade by the Member States in the Tripartite Community is one of the priority areas for policy harmonisation and coordination under the Tripartite framework. The two-day meeting is part of efforts for the 22 member states to give guidance and coordinate regional and national customs procedures and specifically customs related issues. The medium term strategic plan is focused on improving customs co-operation and trade facilitation to simplify and enhance automated and digitalized customs systems. Among...

The resolve by the East African Community member states to market the region as a single investment destination was laudable, as it was widely expected that the gains of regional integration would thus trickle down to all citizens. Still, while regional integration has been the mantra of the EAC heads of state and regional policy makers, the key question is whether this dream will ever be realised, going by the persisting trade wars between the member states. Although significant milestones have been achieved with the signing and ratification of key protocols, the region still has a long way to go to attain its goal of unity. The trade wars and the seemingly lack of commitment by some partner states on the implementation of joint regional projects such as the pipeline and the crude oil refinery have sent mixed signals about the commitment to regional integration. The trade disputes are eroding the gains of the Common Market Protocol, which provides for free movement of goods, services, labour and capital within the regional bloc. The success of the Common Market is critical to the ongoing regional integration process because it will pave the way for the achievement of the monetary union and the EAC political federation. Last week, Tanzania cracked down on sugar imports from Uganda, claiming the commodity had been sneaked into Uganda from Kenya, which is entangled in a domestic sugar crisis caused by importation of large amounts of contaminated duty-free sugar. Dar imposed a 25 per cent import duty...

Parliament is in the process of ratifying an agreement to establish a tripartite free-trade area that will bring 26 African countries into a single market governed by preferential free-trade arrangements. The agreement was ratified by the select committee on trade and international relations of the National Council of Provinces on Wednesday and will be considered by the portfolio committee on trade and industry of the National Assembly in two weeks time. So far 22 countries have signed the agreement which was launched in Egypt in June 2015 with SA signing in July 2017. It will enter into force once it has been ratified by 14 member states. So far only Egypt and Uganda have ratified it. The agreement is built on the three existing trading blocs: the Common Market for Eastern and Southern Africa (Comesa), the Southern African Development Community (Sadc) and the East African Community (EAC). The countries included in the tripartite free-trade area — seen as a critical driver of regional integration on the continent — have a combined population of 626-million and a total GDP of $1.2-trillion. Once the tariff negotiations are finalised, the deal will offer exporters preferential or zero tariffs into the markets of member countries. Some countries that fall within the tripartite free-trade agreement (TFTA) such as Rwanda, Ethiopia and Tanzania, are among the fastest growing economies on the continent. Briefing the select committee department of DTI chief director Wamkele Mene said SA’s trade with TFTA countries represents 16% of its trade with the...

The East African Community (EAC), a natural and critical trading block for East African nations, has painstakingly been built from the scratch since its collapse in the 1970s. Originally founded in 1967, it crashed 10 years later thanks largely to jingoistic politicians, who failed to see the great economic potential in it, but were rather obsessed with pursuit of short-term political goals. Very unfortunately, despite the billions of shillings that trade within the community generates for its citizens, governments are behaving as if that is not important. The challenge is that trade numbers rarely feature in the political debates or even popular discourse. EAC, with a GDP of $159.5 billion (Sh15 trillion) and 149 million people in 2014, has been feeding small traders, farmers, industrialists and the hospitality sector for years. Trade among member states, dominated by Kenya, Uganda and Tanzania stood at $5.63 billion (Sh500 billion) in 2014 after falling from $5.8 billion in 2013. Indeed, for all the six countries, the three are the most important trading partners. But that is not what has been headlining news of late. Instead, things seemed to unravel at the Kenya-Tanzania where locals protested the arrest of informal traders ferrying goods from Dar es Salaam. Incidentally, this came days after Kenyan tour van drivers blocked their Tanzanian colleagues from accessing the Kenyan — on grounds that Tanzanian authorities had treated them in a similar manner.  President John Magufuli has pursued policies that do not promote robust commercial exchange across national borders –...

NAIROBI, Aug. 6 (Xinhua) -- The United Nations Economic Commission for Africa (UNECA) on Monday urged the East African Community (EAC) to liberalize trade in professional services in order to spur growth of the manufacturing sector. Stephen Karingi, the Director of Capacity Development Division at UNECA, told Xinhua in Nairobi that the region's manufacturing sector is not as competitive as it should be due to relatively high cost of services including in the insurance, legal, logistic and finance sectors. "There is empirical evidence that efficiency gains occurs when markets are opened up. The EAC will further its industrialization agenda if it can access cheaper services from a liberalized market," Karingi said on the sidelines of the Fifth Common Market for Eastern and Southern Africa (COMESA) Annual Research Forum. EAC member states includes Kenya, Uganda, Tanzania, Rwanda, Burundi and South Sudan. Karingi called for the partners of the trading bloc to amend their national laws so that they permit free movement of professionals across the region. He said that the region has already signed the EAC Common Market Protocol which calls for free movement of capital and labor but implementation has not been completed. Karingi said that for every manufactured good, there is an element of services input which must be procured at a competitive cost in order for merchandise to compete regionally and globally. He noted that the EAC is one of the most integrated regions in the continent. He observed that intra-EAC trade has been increasing primarily because Uganda...

On JULY 6 this year Nigeria’s eminent public servant, Africa’s regional integration doyen and scholar-diplomat Professor Adebayo Adedeji was buried at his home in Asuwaju Court, Ijebu Ode, in Nigeria’s south-western Ogun state. The memorial service took place at the Cathedral Church in Ijebu Ode, which I attended. Adedeji was born on 21 December 1930 in Ijebu Ode and died on 25 April this year at the age of 87. On 7 July 2018, the UN Economic Commission for Africa (Uneca) hosted a symposium in Lagos to honour the life and extraordinary work that Adedeji had done during his tenure as executive secretary of Uneca between 1975 and 1991. I was privileged to have known Adedeji during my critical years of completing a doctorate in international relations with the University of Witwatersrand, which focused on Africa’s regional integration efforts. I also co-edited a book which was dedicated to Adedeji in 2016 titled Region-Building in Africa. He was instrumental in key policy documents including the harmonisation of regional policies that guided Africa, such as the 1980 Lagos Plan of Action (LPA), the Abuja Treaty of 1991, and outlining the need for a fully integrated internationally competitive regional economic community prioritising infrastructure, trade and services, as well as an airspace-driven liberalised market strategy for the free movement of people, goods, and services. Adedeji also called for Africa’s five sub-regions to harmonise their policies - through the Yamoussoukro Declaration of 2000 - with a view to fully liberalising Africa’s airspace market by 2002....