SUCCESSFUL implementation of road projects in the East African region requires firm country commitment and prioritisation, the alignment of national and regional objectives and sufficient engagement and consultation with stakeholders. According to the Director of Infrastructure at the East African Community (EAC) Secretariat Philip Wambugu it was also important to harmonise design, construction and operational standards in the region. This is in addition to having clearly defined and coordinated roles, he said, of national and regional institutions at both implementation and operational stages. The EAC senior official said this in his keynote address to the first Africa Bitumen/Asphalt Forum 2015 in Nairobi over the weekend. The two-day forum brought together more than 120 participants from 25 countries. They are drawn from the various areas of refining, trading, shipping and consulting. The theme of the conference is, "New Frontiers in Global Bitumen Market." Road projects, Wambugu said, are hampered by challenges of insufficient resources; inadequate frameworks in terms of legislation and strong capital markets for mobilisation of funds; slow harmonisation of policies and their implementation at national levels; low levels of voluntary compliance; and insufficient automation. "One of the critical problems that the trucking industry has been having is the lack of return cargo. A truck travelling from Mombasa or Dar es Salaam drops goods in Kigali or Bujumbura but is not allowed to pick return cargo, meaning that you pay for both ways as the transporter," said Wambugu. Officiating at the opening of the meeting Kenya's Cabinet Secretary for Transport...

Lusaka- Trade proponents are arguing that the enhancement of regional integration and creation of a grand Tripartite Free Trade Area (TFTA) among the three Southern and East African economic trading blocs cannot be delayed any longer as the global market is yearning for more products from the continent while the groupings need to increase intra-trade among member countries. In recent years, the Southern African Development Community (SADC), the Common Market for Eastern and Southern Africa (COMESA) as well as the East African Community (EAC), have been seeking to join forces in fostering regional integration through trade. Commonly known as the Tripartite Free Trade Area (TFTA), the integrated market will comprise the COMESA, the EAC and SADC. The establishment of a single and enlarged market is expected to boost intra-regional trade and deepen regional integration through improved investment flows and enhanced competition. In fact, this integrated arrangement will create a combined population of some 625 million people covering half of the member states of the African Union (AU) and a Gross Domestic Product of about US$1.2 trillion. SADC, COMESA and EAC have agreed to hold the tripartite FTA summit in Egypt to kick start the process, with the gathering scheduled for the end of May 2015. Africa’s longstanding vision is to be an integrated, prosperous and united continent. This vision was supposed to come closer to reality in December last year when the largest integrated market covering 26 countries in eastern and southern Africa (the Grand FTA) was initially earmarked to...

Kenya’s exports to the East African Community have fallen, largely due to stiff competition from cheap Chinese imports and its own unfavourable tax regime. A survey by the Ministry of East African Community Affairs shows that the volume of Kenya’s exports to the EAC has declined sharply with the major challenge being unfair competition from Chinese traders and the country’s value added tax (VAT) system that has become an impediment to export business. According to the survey, competition from Chinese goods and the unfavourable tax regime account for over 25 per cent and 10 per cent of the total decline in Kenya’s exports to the EAC countries respectively. Other taxation measures such as the industrial development fee (IDF) as well as the railway development fund make Kenyan manufactured goods 5 per cent more expensive than imports from Comesa and SADC countries, according to the report seen by The EastAfrican. Electronic single window The report further says that the implementation of an electronic single window system to facilitate cross-border trade is yet to boost trade. It points out a number of obstacles in the implementation of the platform, particularly related to the understanding of the system itself, the complexity associated with compliance requirements, project support requirements and overall change management programmes. “This explains the further decline in Kenyan exports, particularly to Uganda in 2014,” says the report. “In fact, one of the biggest impediments to the implementation of the SWS was frequent system downtimes that significantly delayed the export process,” the...

Uganda, Tanzania and Burundi are yet to secure internal approvals for the Double Taxation Agreement (DTA) to operate in East Africa, five years after the deal was struck. This has left companies with cross-border investments paying tax twice on their incomes. The DTA among the EAC member states was signed on November 30, 2010, but there has been little progress in terms of fast-tracking internal approvals by member countries, including securing Cabinet or parliamentary sanctions to implement the pact. Countries must seek either Cabinet or parliamentary approval to adopt international treaties. The initial deadline was July last year, but it was extended to November 2014 after all the EAC member countries failed to meet the timelines. The agreement is expected to lower taxes and increase cross-border investments. “We expect everybody to be ready by now because that was the last deadline,” an official from Kenya’s National Treasury who did not want to be named said. Only Kenya and Rwanda are ready for the operationalisation of the agreement. Kenya’s Principal Secretary in charge of East African Affairs John Konchellah said the two countries have deposited their internal consent documents with the EAC Secretariat and dismissed fears that there is lack of commitment from their regional counterparts. “Basically there is a lot of goodwill on the integration of the EAC because it is in the interest of everybody that we go in that direction,” Mr Konchella told The EastAfrican last week. Currently, EAC governments tax income earned by investors both in the...

Four Kenyan one-stop border posts are nearing completion and will officially be commissioned by April, setting the stage for faster clearance of goods and travellers. According to Moses Orwa, the project manager of the Lunga Lunga post, the post is almost complete while senior communications manager at Trade Mark East Africa Nelson Karanja said operations at the Holili post in Taita Taveta would start soon. Malaba and Busia will be completed by July and end of the year, respectively. “One-stop border posts envisage a scenario where all exit and entry formalities are handled at one location – in the country of destination, an initiative that will save time and cut down on costs,” said EAC principal secretary John Konchellah. The time taken to clear trucks at the Lunga Lunga border post is expected to reduce by more than 48 hours. It sometimes takes more than two days for a truck to cross the border but once the facility is complete, trucks will take between 20 to 30 minutes or a maximum of two hours during peak time. Currently, clearance of a bus with an average of 60 passengers takes more than two hours but with the new system, the time taken could fall to 45 minutes, according to Kenya Revenue Authority officials at the border. “Effective border management can turn around the economy of an area because it is a catalyst to development. Residents of this area should also know that they are key to the success of the border...

A senior official of African Union (AU) said Tuesday the long-awaited tripartite free trade area between three regional blocs is expected to be launched in May in Cairo, Egypt. To boost intra-Africa trade, AU heads of state in January 2012 decided to establish the continental free trade area (CFTA) by 2017 between the Common Market for Eastern and Southern Africa (COMESA), the East African Community (EAC), and the Southern African Development Community (SADC). In a press briefing in the framework of the 24th AU summit at the AU headquarters in Ethiopia's capital Addis Ababa, Fatima Haram Acyl, AU Commissioner for Trade and Industry, said the tripartite free trade area is something to be encouraged as a roadmap for the continental free trade area in Africa. "This is something to be encouraged because as a roadmap for the continental free trade area, this is the first point that was noted by the member states, by the heads of states. We are very happy that it will advance and we are launching this tripartite FTA in May of 2015 in Cairo," she said. With 26 countries, 625 million people, and 1.2 trillion U.S. dollar gross domestic products (GDP), the three regional blocs said earlier they would be completing the tripartite free trade area in December of 2014, recalled the commissioner. "I just want to say that 26 member countries as I say 625 million people and 1.2 trillion of GDP. So, it is very important for Africa and that's why actually, we...

The buying and selling of goods and services between businesses in neighbouring EAC Partner States with the seller being in one Partner State and the buyer in the other, for example a company or an individual business person in Rwanda selling to a company in Burundi. Cross Border Trade (CBT) plays an important role in poverty reduction as it provides trading opportunities for a good number of people, for example women, are the most active traders along Rwanda's borders. The EAC Partner States are recognizant that women make a significant contribution towards the process of socio-economic transformation and sustainable growth and that it is impossible to implement effective programmes for the economic and social development of the Partner States without the full participation of women. Studies that were conducted indicate that 74% of informal cross-border trade is conducted by women and for the majority it is their only source of income. In addition, women trade predominately in lower value, low profit products. Gender patterns in the composition of traded goods have been noticed: women sell mainly foodstuffs, for example, manioc flour, tomatoes, corn, onions, fish etc alongside a few other specific products like palm oil, while men sell a wider variety of products, often with a higher value like secondhand clothing, beer, household items and other fastmoving consumable goods. However, some cross border women traders across the region do not use available formal systems/structures for most of their transactions most of them do not really understand the benefits gained through...

Leadership in public service requires not only intellect but also empathy. Empathy is fundamental to good governance considering that we mostly elect our leaders on notions of trust and empathy. However, one of the major debates in the region is the issue of leaders clinging onto power. It is not just the presidents, look at members of parliament and other office bearers. It is, therefore, my wish that fellow East Africans could embrace our region’s integration a little faster than it otherwise appears to take for us to witness true democratic governance and register improved quality of life for all citizens. The roadmap to attainment of our regional integration is making headway. The Common Market Protocol and the Customs Union are at a very tangible stage. Soon, the Monetary Union which will see East Africa as a block adopt and use a Single Currency by 2024 or even earlier than that. It is vital to note that the East African Monetary Union Protocol once in force will give birth to the EAC Central Bank as a monitoring and regulatory institution though partner states will maintain their Central Banks. With the EAC vision, a prosperous, competitive, secure and politically united East Africa, coupled with the line mission of widening and deepening economic, political, social and cultural integration in order to improve the quality of life of the people of East Africa through increased competitiveness, value added production, trade and investment. It is evident the earlier we fully up our support and...

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...