Clothing and shoe traders could face a steep tax increase on imports in new proposals that are aimed at reviving the East African Community’s ailing textile and leather sectors. The proposals to raise taxes by up to 50 per cent are included in a report that was commissioned on the two sectors by the EAC, and whose findings were presented to the region’s heads of state last week.  They seek to limit cheap imports that have undercut once vibrant local industries. “… over the years, the clothing and shoe manufacturing industries have collapsed due to the emergence of informal sector trade in used clothes and shoes (UCS) and the impact of trade liberalization,” reads a policy brief  on the report that was submitted to the EAC heads of state. East Africans spend an estimated Sh36.1 billion ($350 million) on second-hand clothes and shoes (mitumba) annually. While the report endorses an existing proposal to ban mitumba, it also proposes a 40 per cent tax on “readymade garments or $5 per kg whichever is cheaper”. This implies that importers of new clothes would also be affected. The report, authored by the EAC secretariat, proposes increasing the common external tariff (CET) on new shoes from 25 per cent to 50 per cent or $20 per pair (for leather shoes) and $5 per pair (for plastic shoes), whichever is higher. A three-year tax waiver for textiles inputs and shoe manufacturing equipment that are not available locally has been proposed as is a ban on...

East Africa’s leading tourism exhibition, the Karibu Travel and Tourism Fair (KTTF) kicked off today in Tanzania’s sprawling northern tourist city of Arusha. The KTTF 2017 is the premier East African regional tourism show and one of the top two “must visit” events of its kind in Africa with a superb, secure, and more convenient venue in a natural setting with an ideally-designed layout – the biggest and only outdoor tourism fair in Africa. Standing as the most competitive and dedicated travel market that brings the Eastern and Central African region and the world under one roof, providing overseas tour agents with an ideal platform to maximizing their networking opportunities, KTTF is taking off this Friday and will close on Sunday. Organizers said the event has attracted exhibitors who area regional in-bound tour operators and tourist boards, as well as camping and safari companies. Others are service providers for wildlife lodges and hotels, local and regional airlines, as well as supporting travel trade services providers, manufacturers, and suppliers of tourist equipment. KTTF represents a major business platform and contracting opportunity for long-established businesses in Tanzania and across East Africa, reflecting the ongoing growth in the tourism industry and in the global and domestic sphere. According to organizers, delegates and international buyers will enjoy the benefit of exclusive access on the “Trade Only Day,” which also includes a private, corporate cocktail on the first day of the event. KTTF has become “the place to meet,” for the African travel industry partners...

THE winds that waft along the Swahili coast change direction with the seasons, a boon to traders in times past. Shifts in the political winds are harder to predict. Last July a proposed trade deal between five countries of the East African Community (EAC) and the EU was thrown into disarray when Tanzania backed out at the last minute. An EAC summit, scheduled for months ago, was meant to find a way forward. Held at last on May 20th in Dar es Salaam, after many postponements, only two presidents showed up. The deal is in the doldrums. The pact is one of seven “Economic Partnership Agreements” (EPAs) the EU wants to sign with regional groups in Africa, the Caribbean and the Pacific. The first was agreed with the Caribbean in 2008; southern Africa followed suit last year. But progress in west Africa has also stalled, with Nigeria raising objections. The EPAs were promoted as a new breed of trade deal, and were supposed to bring development and regional co-operation. So far they have brought neither. Negotiations on EPAs began in 2002. Under previous conventions, the EU gave favourable market access to African, Caribbean and Pacific countries, most of them former colonies. That fell foul of World Trade Organisation rules. Hence the idea of EPAs: reciprocal deals, requiring both parties to open their markets. Two obstacles have to be surmounted. First, EPAs overlap with existing trade arrangements. The poorest countries, like Tanzania, already enjoy duty-free and quota-free access to the EU under...

Regional manufacturers have been urged to embrace electronic trading platforms (e-commerce) to widen their market reach and become more productive and competitive. The experts said embracing such innovations will help reduce the cost of production and enhance the sector profitability. According to Dr Mukhisa Kituyi, the United Nations Conference on Trade and Development (UNCTAD) Secretary-General, e-commerce is an instrumental and innovative tool for promoting industrialisation and trade across the region. Kituyi was speaking during the ongoing EAC Manufacturing Business Summit and Exhibition in Kigali on Tuesday. The three-day summit brought together more than 500 participants, including business leaders, experts and policy-makers, to discuss mechanisms to bolster regional industrialisation. Kituyi said manufacturers should take advantage of the immense opportunities presented by e-commerce platforms to enter new markets, create awareness about their products and drive sales to improve profits. The UNCTAD official observed that the economy today is being driven by digitisation, which makes it imperative for regional manufacturers to embrace e-commerce and tap into the untapped markets. This way the sector will be able to create more jobs and foster inclusive economic growth, he added. Matthias Wachter, the in charge of the Federation of German Industries department of security and raw materials, encouraged industrial players to employ technology and e-commerce in all their processes to increase production and tap new customers. "This way, they will be able to easily penetrate markets and sell products at competitive prices," he added. Reducing cost of production Meanwhile, the business community has called on regional...

The East African Community is divided on whether to sign a key trade agreement with the European Union. ALON MWESIGWA explains how the EU-EAC Economic Partnership Agreement (EPA) would affect the region. It is midday on a Sunday and Tom Sajje organises his fishing net in Kitooro on the shores of Lake Victoria, preparing for the evening's journey to fish. "These days, we struggle to get fish; it is no longer as available as it used to be," Sajje said, referring to the dwindling fish stock in the lake. Sajje, who is clearly using archaic methods, says they have not been helped much to improve their fishing methods and their general well-being. People like Sajje have a special mention in the EU-EAC EPA trade deal. It promises "ensuring preservation and priority of particular needs of the artisanal/subsistence fishery." The EU-EAC-EPA deal would also ensure technology transfer, provide for funds, environmental protection, which would in turn grow fish stock, and elevate people like Sajje, but most importantly improve fish exports. That's not all. Once signed, it will affect everyone - from a management firm at an air-conditioned office in town to a cassava farmer in Moroto. The issue is for better or for worse. The 640-page agreement gives a glimpse of how trade will be like in the next 25 years if it is signed. In its preamble, it promises "to serve as an instrument of development... and facilitate attraction of investment, technology and the creation of employment in the EAC."...

KIGALI, May 24 (Xinhua) -- Experts attending the second high-level East African Manufacturing Business Summit and Exhibition (EAMBS) held in Rwanda's capital city Kigali said Wednesday that innovation is key for the East Africa manufacturing sector to compete globally. "We have to understand that our industries are operating in a global context, in an open globalized market place, and that is not going to change. We have to be innovative and work on our efficiencies. We should be able to produce high quality products that are competitive at international markets," said Ali Mafuruki, board chair of Trade Mark East Africa. He added that regional economies should strategically position themselves in the global business environment through producing locally made products that are price competitive. Rwanda hosts the forum from May 23 to 25, 2017 dubbed "harnessing the Manufacturing Potential for Sustainable Economic Growth". The three-day meeting includes an exhibition where investors, enterprises, researchers and academia will collectively showcase new products and services as well as exhibit the latest advances in manufacturing technology and innovation, particularly those with relevance to Small Medium Enterprises. Lilian Awinja, executive director of East African Business Council (EABC), called for innovative strategies that will raise competitiveness levels and expand the region's manufacturing and export base. "Innovations are now shaping the business environment. We need to add value to products produced in EAC. Our regional industries can now begin to raise manufacturing output and increase its share of global trade and production," she added. Mukhisa Kituyi, secretary-general of...

Kenya’s hopes of having neighbours sign the much-needed economic partnership agreement with the European Union now depend on how soon the bloc will lift sanctions on Burundi. At a recent Heads of State Summit in Dar es Salaam, the East African Community resolved to hold any further discussions on the agreement only if Burundi’s situation is discussed in the same forum. SANCTIONS “The heads of state noted that the remaining partner states that have not signed the EU-EAC Economic Partnership Agreement (EPA) are not in a position to do so pending clarification of issues they have identified in the agreement,” says the communique issued after the leaders met in the Tanzanian port city. “The summit also agreed that the EU sanctions on Burundi should be discussed alongside the EPA discussions.” Kenya was represented by Deputy President William Ruto who used the forum to call for removal of the non-tariff barriers he argued were killing inter-community trade. Cabinet Secretaries Phyllis Kandie (East African Affairs), Aden Mohammed (Industrialisation), also attended. TRADE PACTS But the issue here was the delayed signing of EPAs. Burundi, a member of the East African Community should essentially have signed, alongside Kenya, Rwanda, Tanzania and Uganda, the Economic Partnership Agreement with the European Union. The Economic Partnership Agreement (EPA), is a set of trade pacts that allow African countries specific privileges to export to the European Union markets without being subjected to customs. They cover trade in goods and development cooperation and covers on agriculture, fisheries and economic...

Regional manufacturers have been urged to embrace electronic trading platforms (e-commerce) to widen their market reach and become more productive and competitive. The experts said embracing such innovations will help reduce the cost of production and enhance the sector profitability. According to Dr Mukhisa Kituyi, the United Nations Conference on Trade and Development (UNCTAD) Secretary-General, e-commerce is an instrumental and innovative tool for promoting industrialisation and trade across the region. Kituyi was speaking during the ongoing EAC Manufacturing Business Summit and Exhibition in Kigali on Tuesday. The three-day summit brought together more than 500 participants,  including business leaders,  experts and policy-makers, to discuss mechanisms to bolster regional industrialisation. Kituyi said manufacturers should take advantage of the immense opportunities presented by e-commerce platforms to enter new markets, create awareness about their products and drive sales to improve profits. The UNCTAD official observed that the economy today is being driven by digitisation, which makes it imperative for regional manufacturers to embrace e-commerce and tap into the untapped markets. This way the sector will be able to create more jobs and foster inclusive economic growth, he added. Matthias Wachter, the in charge of the Federation of German Industries department of security and raw materials, encouraged industrial players to employ technology and e-commerce in all their processes to increase production and tap new customers. “This way, they will be able to easily penetrate markets and sell products at competitive prices,” he added. Reducing cost of production Meanwhile, the business community has called on regional...

Djibouti has formally opened one of four new ports designed to cement the tiny Horn of Africa nation's position as a continental hub, a statement from the ports authority said on Wednesday. Doraleh Multipurpose Port has been substantially upgraded as part of a Chinese-backed plan to establish Africa's largest free-trade zone that can handle $7 billion of goods a year. "The port of Djibouti is a gateway to one of the fastest growing regions of the world with 30,000 ships transiting the port each year," the statement said. "Located on two of the three busiest shipping routes in the world, the port provides a strategic platform for maritime activity connecting Asia, Africa, and Europe." Tiny Djibouti, with a population of 876,000, has long punched above its weight. It hosts large U.S. and French naval bases; China is also building a naval base. Djibouti also handles roughly 95 percent of the inbound trade for neighbouring Ethiopia, population 99 million. Doraleh's bulk terminal can handle 2 million tons of cargo a year, and offers space to store 100,000 tons of fertilizer, 100,000 tons of grain, and warehouses for other goods. The break bulk terminal can handle 6 million tons of cargo annually, the statement said, and there are 40,000 slots for vehicles at the RO-RO terminal. Two other ports designed to export salt and potash will open next month. Djibouti mainly handles goods from Asia, representing nearly 60 percent of traffic, the statement said. In 2015, overall traffic to Djibouti increased 20...

The region's manufacturing sector has huge potential and collective effort will be crucial for countries to exploit it, Prime Minister Anastase Murekezi has said. Murekezi was speaking at the official opening of the second East African Manufacturing and Business Summit in Kigali yesterday. He told regional policymakers, industrialists and other participants attending the summit that the East African Community has set out a target of ensuring that by 2032, the manufacturing sector will contribute 25 per cent to the bloc's GDP. Currently, manufacturing accounts for just 10 per cent of the GDP in the region. Murekezi said it is expected that by 2032 the bloc will have diversified the manufacturing base and raised the value of local content of manufactured exports to at least 40 per cent from the currently estimated value of 8 per cent. Source: All Africa