The East African Community has developed an ambitious industrialisation policy to promote the manufacturing sector, which is expected to account for 25 per cent of the regional GDP — up from 10 per cent — by 2032. Anchored in value addition and product diversification, the policy shift is expected to ease the dependence on agriculture and increase the value of manufactured exports to at least 40 per cent, up from the current eight per cent. “The EAC industrialisation strategy and its action plan must guide all our policy actions and deliver results,” said Rwandan Prime Minister Anastase Makuza, during the Second East African Manufacturing Business Summit in Kigali. Over the period, 2006 remains the best performing year, when manufacturing sector growth peaked of 8.2 per cent before crumbling to a low of 1.4 per cent in 2012 and recovering in 2015 to 5.7 per cent. In 2016, its growth shrank to 4.7 per cent. Competition Of note is that while the growth of manufacturing in the EAC is higher than the sub-Sahara Africa average of 4.3 per cent, it is significantly lower than that of the West African economic bloc that stands at 8.7 per cent and Ethiopia whose sector is expanding at a rate of 9.6 per cent. “The growth of the EAC manufacturing sector is not sufficient to create structural transformation or to reach ambitious industrialisation targets,” said Ruth Pollak, research and industrial policy advisor at the United Nations Industrial Development Organisation. Ms Pollak added that although the...

The government is expected to increase spending to 32.945tri/- from the current 29.5tri/-, to finance implementation of flagship infrastructural projects aimed at enabling Tanzania to make optimal use of its strategic position as a transport hub in the region. The 2017/18 budget is aimed at financing the second year of the ambitious Five- Year Development Plan II (2016/17 - 2020/21) which is geared towards heavy investments in infrastructure to transform the nation from an agricultural economy to an industry based economy. Key development projects with significant multiplier effects to the economy as outlined in the plan include construction of the standard gauge railway (SGR) to link the Dar es Salaam Port with Mwanza on Lake Victoria and Kigoma on Lake Tanganyika, as well as neighbouring Rwanda and Burundi. The government is funding construction of the first phase of the line, about 207km from Dar es Salaam to Morogoro which will be constructed by a Turkish Company Yapı Merkezi and Portugal’s Mota-Engil under a turnkey contract at a cost of 1.2bn US dollars. The government has also lined Mchuchuma Coal Mining and Liganga Iron Ore Mining, a 3bn US dollar project which includes construction of a 600MW coal-fired power station and an iron plant expected to make Tanzania the third largest African producer of iron ore and generate 32,000 jobs. Other flagship projects include revamping of the national carrier, Air Tanzania Company Limited, to boost tourism and air transport sectors. The government purchased two bombardier aircrafts for the national carrier last...

The East African Community secretariat on Tuesday took the ongoing competition for design of the new symbols of the regional bloc to the University of Rwanda’s College of Arts and Social Sciences (CASS) in Huye District. The symbols that need to be changed are the emblem and logo of the six-nation bloc. The competition follows a decision taken last year by the Sectoral Council of Ministers responsible for EAC affairs to adopt the bloc’s brand architecture strategy and directed the secretariat to involve the region’s youth in developing this new brand. According to Richard Owora, head of corporate communication and public affairs at the EAC Secretariat, the EAC brand architecture strategy proposes activities that include: re-designing a new emblem and logo, developing a common unique identifier for all EAC organs and institutions; developing one main EAC corporate colour and one secondary colour; and developing a single visual identity emblem for the Community. Regional youth or students aged 18 to 35 are partaking in the competition in which the first prize is $25,000. The second and third prizes are $5,000 and 2,500, respectively. “EAC does not have clearly defined brand architecture for its organs and institutions and this has created a gap that has led to the inconsistent design of new logos for the institutions,” Owora said. “There is also lack of a visual connection between the current three main organs; the EAC Secretariat, the East African Legislative Assembly, and the East African Court of Justice, and the eight other institutions.”...

Although China highly spoke of its first African built railway from Tanzania to Zambia during the Cold War heydays, it is a rare occasion for China to link a railroad to a grand design, such as “the Belt & Road Initiative” proposed by President Xi Jin- ping in 2013. Recently, after the completion of the railroad from Nairobi, the capital city of Kenya, to its key port city Mombasa, a three-part documentary produced by Xinhua News Agency in a title of “My Railway, My Story” made its debut on Kenyan television on 29th and 30th May respectively and on Chinese international television New China TV. The major public state broadcaster in Kenya, the Kenya Broadcasting Corporation also showed the two parts "Bridges" and "Stations" documentary which revolve around the 79 bridges and many stations along the 480-km long railroad with stories of people who were dedicated to its construction during prime time slots. Kenyan observers lauded the initial two part documentary which aired and showcased spectacular Chinese workmanship in the construction of Standard Gauge Railway. For sure, the legacy of the railway line would live on, as the SGR is set to transform the country's socio-economic bearing for many years to come. However, the question that comes into focus in the many minds of many and the subject of this article is why did China invested 3billion US$ into the huge East African rail-network and how does the world perceived the railroad in East Africa within the backdrop of Chinese-initiated...

The EAC Mining Bill that was moved by Mr Chris Opoka- Okumu (Uganda) hopes to provide a legal framework for the regulation of mining operations in the East African Community (EAC). It seeks to implement the EAC Vision 2050 and specifically to operationalise Article 114(2) (c ) (iv) of the EAC Treaty that calls for harmonisation of mining regulations to ensure environmentally friendly and sound mining practices. The Bill further provides for a transparent and accountable mechanism for reporting mining and mineral related activities in the region. It is aimed at ultimately reducing differences in the operating environment for the sector. It sailed through after the first reading and sent to a committee for necessary actions. It is apparent that by seeking to harmonize mineral and mining laws and policies, stems from acknowledgement of the great potential that mineral resources have in contributing to poverty alleviation and to national and regional economic development. This comes at a time when the mineral-rate eastern African country is attracting foreign explorers. The region is considered to have a great potential of minerals, ranging from oil, natural gas, titanium, and gold, among others. Analysts, however, warn that lack of a comprehensive policy on mining could deny regional economies a chance to enjoy the proceeds of the business. The EAC Vision 2050 lays out a broad perspective in which the region optimizes the utilisation of its resources to accelerate productivity and the social wellbeing of its people. It portrays a future East Africa with rising...

A new World Bank report released today called for increased private sector investment in Africa’s under-developed electricity transmission infrastructure, a vital ingredient for reaching Africa’s energy goals. Africa lags the rest of the world when it comes to electricity, with just 35 percent of the population with access to power and a generation capacity of only 100 GW. Those who do have power typically consume relatively little, face frequent outages and pay high prices. Transmission infrastructure is a crucial middle part of the electricity value chain. Alongside generation and distribution, improving and increasing transmission infrastructure is key to closing the access gap. So far, transmission in Africa has been financed from public sources and new models of financing involving the private sector have received insufficient attention from policymakers or financiers. The ‘Linking up: Public-Private Partnerships in Power Transmission in Africa’ report examines private sector-led investments in transmission globally and how this approach is applicable in sub-Saharan Africa.  The private sector has participated successfully in transmission networks in many countries in Latin America and Asia, and this approach could be replicated. “Private finance has supported the expansion of electricity transmission infrastructure in many regions of the world and the same can happen in Africa.  To attract private sector investment, however, governments need to adopt policies supportive of this strategy and establish the right business, regulatory and legal environment to sustain investor interest,” said Riccardo Puliti, Senior Director and head of Energy and Extractives Industries at the World Bank. Estimates of annual...

National seed review teams from seven Common Market for Eastern and Southern Africa (Comesa) member states have launched harmonised national seed laws. The teams from Kenya, Uganda, Rwanda, Burundi, Zimbabwe, Zambia and Malawi meeting in Nairobi backed the new laws meant to improve the movement of seeds across the region. Agriculture Cabinet Secretary Willy Bett described the move as a historic opportunity to collectively reflect on how best to plan and mitigate risks that face the agriculture sector in the region. Historically, the regulatory environment surrounding seed production and certification has made it costly to do business in this sector, discouraging private sector companies from investing in innovation and expanded production.  The new laws are expected to bring about consistency in seed certification. Source: Standard Digital

East African Community member states are divided on whether to implement the ban on importation of used clothes and leather products, amid concerns that individual countries’ interests are overriding regional policies. Burundi, Uganda, Kenya, Rwanda and Tanzania agreed in 2016 to ban the importation of secondhand clothes and leather products and restrict the use of old vehicles in the region by 2018, in order to boost their industrialisation programmes. But one year on, Kenya has signalled that it will not respect the 2018 deadline on the grounds that it lacks the capacity to meet both the domestic and export demand for textiles. Criticism The decision has sparked criticism, with Dr Mukhisa Kituyi, Secretary-General of the United Nations Conference on Trade and Development, the UN body dealing with trade, investment and development, saying it is ill-advised. The Secondary Materials and Recycled Textiles Association (Smart), a US industry association representing used clothing businesses, filed a petition with the USTR on March 21, saying the ban was undesirable. The US imported more than $1 billions worth of textiles and apparel from sub-Saharan Africa under Agoa in 2015, according to available data. Bowing to pressure Observers say that Kenya is bowing to pressure by lobbyists who petitioned the US Trade Representative (USTR) to cancel the Africa Growth and Opportunity Act (Agoa) pact with East African states for proposing to ban the importation of used clothes, a multimillion-dollar business. In its petition, Smart called for an out-of-cycle review on Kenya, Rwanda, Tanzania and Uganda’s eligibility...

Regional industries are struggling to remain afloat amid an onslaught from imports of finished goods. The manufacturing sector growth has remained depressed at an average of 4.7 per cent annually in recent years, and its contribution to GDP has continued to shrink to less than 10 per cent in the East African Community countries, save for Tanzania. Industrialists attribute this to the region’s exportation of raw materials and importation of finished goods, a trend that is suffocating local companies. Many have scaled down their operations and others have closed shop. About 70 per cent of the leather produced in the region is exported as raw, wet blue and crust, while tanneries continue to operate at less than 40 per cent of capacity due to lack of a reliable supply of raw materials. In the pharmaceutical industry, East African manufacturers account for only 30 per cent of the market share, with imports commanding 70 per cent. Scaled down business Over the past five years, a number of regional companies — Eveready East Africa, Sameer, Kuguru Foods — have shut down their operations. Although the region has identified strategic industries such as chemicals, plastics and paints, automotive, agro-food, pharmaceuticals and cosmetics, cotton, textile and apparel and leather and footwear as key to the growth of manufacturing, regional companies account for only about 20 per cent of the products on the market. “We are importing stuff we can produce,” said Ali Mufuruki, Infotech Investment Group chairman and chief executive officer. “We need to...

Public debt in most sub-Sahara Africa will continue to balloon as governments borrow to finance infrastructure projects unless private sector investments increase, experts have warned. In East Africa, governments are on a borrowing spree to finance key infrastructure projects in transport, energy, water and sanitation. But a new report by the World Bank says that only increased participation by private investors in these projects will help countries close the infrastructure financing deficit. Estimates by the World Bank show that sub-Sahara Africa requires about $100 billion annually to invest in infrastructure projects in order to accelerate economic growth by as much as 2.6 percentage points per year. But the continent is only able to mobilise half of this financing through borrowing, bilateral agreements, domestic revenues, development financial institutions and public-private partnerships, leaving a massive deficit. However, governments can close this gap by creating an environment that allows for private investors to pump resources into projects. Financing complexities Currently, private participation in infrastructure projects in Africa is extremely low, largely due to limited public sector capability, insufficient political will, policy uncertainty and a weak regulatory environment. Private investors have also shunned the continent due to financing complexities attributable to narrow financial markets, higher actual and provisional risks, longer project durations, significant cost overruns and currency mismatches. While countries like Brazil and Turkey have managed to attract $433 billion and $124 billion in private capital respectively, sub-Sahara has only managed to mobilise $77 billion over the past decade. “Many transformational projects have enormous...