Kenya will start transporting crude oil by road from Turkana to the port of Mombasa in coming months under the Early Oil Pilot Scheme program. Tullow Oil says the oil produced is initially being stored until all necessary consents and approvals are granted. Kenya has been looking forward to join the league of crude oil exporters with the discovery of oil at the Lokichar Basin in Turkana County. This has however delayed due to many reasons including security concerns, environmental concerns, and logistical challenges. Tullow Oil says trucking of crude oil from Lokichar to the Port of Mombasa will commence in coming months. Tullow Oil says “Discussions between local and national Government are on-going with expectations of being able commence the trucking of oil in the coming months”. For now, oil produced is being stored until all necessary consents and approvals are granted for the transfer of crude oil to Mombasa by road. Tullow Oil says they have been conducting tests on how the oil will behave in different temperatures when being transported to the refinery in Mombasa for storage and so far the results have been positive. Tullow Oil “expects comprehensive results from the extended injection and production testing at both Amosing and Ngamia to be announced in the third quarter of 2018”. The firm says the final investment decision and the construction of the pipeline will be concluded in 2018 and 2019 respectively. Tullow oil says the “upstream baseline data collection for the Environmental Social Impact Assessment has...

Dodoma — PRESIDENT John Magufuli yesterday called for unity and cooperation among East African Community (EAC) member states to maintain the region's sustainable development. Dr Magufuli said distrust and trade barriers in the EAC bloc benefit nobody, but were instead victimising the East Africans doing businesses and other socialeconomic related activities. He said massive investment in industrial and infrastructure development is vital for effective utilisation of existing natural resources to benefit the over 170 million people. Addressing the evening session of the East African Legislative Assembly (EALA) here, President Magufuli said Members of Parliament (MPs) were dutybound to improve people integration and adopt suitable laws and policies for the region. "EALA members should ensure that policies and legislations attract and promote investments ... this is your responsibility as parliamentarians to ensure that we all care for others," he said. Explaining on the shortage of industries, President Magufuli who aggressively champions industrial revolution in the country, said EAC member states have not been benefitting from their natural resources due to lack of manufacturing industries. "South Sudan, for instance, has huge quantity of minerals and oil reserves, but few exploiters are condemning the youngest African nation to endless conflicts. "....This is also the case with Tanzania ... we are the second country in Africa with largest number of livestock, yet, most of us here don't put on shoes produced from local industries," he said. He added: "We don't benefit from these raw materials and they do not help our 170 million people,"...

President John Magufuli yesterday outlined at least five issues that East Africa Legislative Assembly (Eala) members need to work on to support the development agenda of the region. The issues, according to him, include intra-regional diplomatic disputes, trade barriers and mistrust among member states. Dr Magufuli also mentioned low industrialisation and poor infrastructure as major hurdles to development in the region. Addressing Eala members who were meeting in Dodoma, President Magufuli said: "There are some disputes, which you are all aware of, that have persisted for a long time. In fact, they are playing a role in delaying the region's development. "But it is also my wish that you, as representatives of East Africans, will be discussing possible solutions to trade barriers and how to spur investment in the region. Also, don't forget also that mutual trust in the region is important in promoting peace and unity." On industries, Dr Magufuli challenged Eala members to help mobilise domestic and foreign investments in manufacturing and processing of natural resources. His emphasis also was on the need to improve electricity production, which was still low compared to demand. "The East Africa Community (EAC) has a total population of about 170 million. This is a huge market, and that is why it is important to focus on industrialisation. We cannot continue to import everything," noted the Head of State. "You have been elected at the right time. Intra-regional trade is picking up. It has now reached $5 billion from $1.8 billion in 2005....

Tanzania and Uganda have decided to introduce a tax of Kenyan confectionary goods, including chocolates, sweets and ice-cream. The countries claim the 25% import duty tax is related to the use of imported industrial sugar. The news follows the rejection of certificates of origin issued by the Kenya Revenue Authority (KRA). If the documents, which certify the origins of the goods and therefor determine the charge of import duties, had been accepted by the two nations, Kenya would have been guaranteed tax-free entry. This follows the rules under the East African Community (EAC) bloc, which allows locally manufactured goods to travel between Burundi, Kenya, Rwanda, Tanzania, Uganda. Kenya has been accused by authorities in Uganda and Tanzania that its manufacturers have been using imported sugar under a 10% duty remission scheme. “This is an EAC-wide remission scheme that is available to all manufacturers in the region,” stated Phyllis Wakiaga, CEO of Kenya Association of Manufacturers (KAM). “We are not supposed to pay duty when we sell in the region because our competitors in the region also rely on industrial sugar imported under the same remission scheme.” Source: Business Chief

East African countries Uganda and Tanzania are being accused of restricting trade in the East African Community (EAC) after the two recently imposed taxes on Kenyan-made confectionery products like biscuits, ice-cream, sweets,  over claims that imported industrial sugar is used to produce those goods. Certificates of origin issued by the Kenya Revenue Authority (KRA) have been rejected by the two states who have now chosen to levy 25 per cent import duty on Kenyan confectioneries, news site Business Daily reports. In the East Africa Community common market made up of Tanzania, Kenya, Uganda, Rwanda and Burundi, free movement of locally manufactured goods within the bloc is allowed. But authorities from Tanzania and Uganda have accused Kenyan manufacturers of trying to win the competition to their side by using industrial sugar imported under a 10 percent duty remission scheme as the region does not produce industrial sugar. But Kenyan manufacturers have argued that Uganda and Tanzania are only using the customs taxes to restrict trade. “This is an EAC-wide remission scheme that is available to all manufacturers in the region. “We are not supposed to pay duty when we sell in the region because our competitors in the region also rely on industrial sugar imported under the same remission scheme,” the Kenya Association of Manufacturers (KAM) chief executive Phyllis Wakiaga was quoted by the Business Daily. The KRA’s officer in charge of exports Julius Kihara also said the manufacturers should be safe from taxes as long as the trade volume falls...

The construction of a new transit shed at the Jomo Kenyatta International Airport (JKIA) is ongoing in a plan aimed at expanding the facility’s cargo handling capacity by more than 10 per cent. The expansion will take the number of transit sheds to six. The move has been triggered by the rising air cargo competition from Ethiopia and South Africa, as well as the rise in exports, especially horticulture. A report released last week by the Fresh Produce Consortium of Kenya (FPC Kenya) shows that the sales of fresh produce increased to reach Sh115 billion in 2017, from Sh101.5 billion in 2016, with flower exports contributing Sh82.24 billion, up from Sh70.83 billion the previous year. In a bid to handle the increased tonnage of horticulture, which is one the country’s major exports, the Kenya Airports Authority (KAA) is enhancing its exit and import handling capacity by 10,000sqm. “We have five transit sheds at the airport which deal with the facilitation of cargo; imports and exports at the JKIA. The additional facility, called Mitchell Cott, should be ready by September thus making them six,” said Evans Michoma, KAA Commercial Cargo Manager. “This will add the capacity of our uplifts for cargo facilitation at the airport.” Currently, the handling capacity at the airport is a million tonnes annually. This is expected to rise by 150,000 tonnes a year once the new transit shed is completed. In a week, one transit shed can handle about 800 to one million kilos in exports, according...

Expansion of the port of Mombasa over the past four years has enabled it to handle larger volumes of cargo, making the facility attractive to big global shipping lines. The Kenya Ports Authority (KPA) says the “vast improvement” in the efficiency of operations is another major reason the facility has caught the eye of larger vessels. Two weeks ago, the port received a container vessel Mv Spero, operated by Hapag-Lloyd, a German shipping company, marking the firm’s start of operations to East Africa. Hapag-Lloyd is the world’s sixth largest container carrier in terms of vessel capacity and currently, six of the top 10 container shipping lines are now calling at the port. These are Maersk, Mediterranean Shipping Company, CMA-CGM, China Ocean Shipping Company (COSCO) and Evergreen Shipping line. “The fact that more shipping lines are calling at the port is a manifestation of the confidence the global shipping and business community has in the Mombasa port,” says KPA Managing Director Catherine Mturi-Wairi. She attributed this to a raft of reforms achieved under the Mombasa Port Development Programme (MPDP). The MPDP kicked off in 2005 as part of the actualisation of a 25-year Port Master Plan that focused on capacity enhancement in the wake of growth in cargo volumes. Another component of the MPDP is application of modern technology in the port’s procedures. “Implementation of this programme has continued to increase efficiency in operations, reducing ship turnaround time from 4.9 days a few years ago to 2.5 days. Container dwell time...

Shippers have started embracing the Through Bill of Lading (TBL) freight model to import goods into the country, which is expected to increase cargo being transported via the Standard Gauge Railway trains. Last week, Maersk Line delivered a freight train loaded with 108 TBL containers to the Nairobi Inland Container Depot (ICD) in a move expected to resolve the issue of returning empty containers. For goods to be delivered to a destination, the importer has to state the port they want their cargo offloaded. In the TBL, the point of destination is the ICD and not Mombasa port as is the practice currently with the merchant haulage model. The TBL model will ease the burden of repatriating empty containers which are required to be returned to designated yards in Mombasa. When freight trains started operating in January, the Kenya Railways and Kenya Ports Authority (KPA) railed containers meant for offloading at the port to the ICD, complicating logistics for importers who had to hire trucks to transport empty containers to Mombasa, incurring additional costs. But with the TBL, importers will now return the containers to the ICD. Maersk Line Eastern Africa Managing Director Mads Skov-Hansen said the direct link between Mombasa port and the ICD in Nairobi offers alternative solutions to transport cargo to trade partners in key inland markets. “Moving goods shipped by Maersk Line to Mombasa onward through inland corridors in a timely and efficient manner is crucial to our customers. Solutions to transport massive cargo volumes quickly,...

The government must take concrete measures to ensure the country retains its dominance as the regional powerhouse. This requires that operations of all ministries, departments and agencies measure up to global standards. Mombasa port, Kenya’s gateway for exports and imports, is the starting point. The days of running ‘business as usual’ are gone because Tanzania is keen on taking away trade from hinterland countries that used to pass via Mombasa port. Uganda and Rwanda have already demonstrated their willingness to reduce their dependence on Kenya. Indeed, Rwanda has decided to build a railway line that will link it to the Tanzanian standard gauge rail line from Dar-es-Salaam Port. Burundi is already in the Tanzanian orbit as most of its imports and exports pass through Dar ports. Tanzania has also demonstrated its readiness to erect tariff and non-tariff barriers to contain Kenya outside its borders such as giving rebates to cargo owners and truckers. But, perhaps, the biggest move that Mombasa needs to make is ensure it retains the maritime trade between the DRC and the outside world. This is because the Congolese population is huge and the country is poised to grow its economy faster once it stabilises its politics. It also has all the mineral wealth the world needs. Container ships Another key area that Mombasa port needs to address urgently is the time it takes to off-load and load container ships. This will require the cooperation of all stakeholders at the port including those who make money as...

Tanzania’s President Dr John Pombe Magufuli on Tuesday emphasised the need and urgency for the East African Community to work harder, in unity, to fast-track the development of the six-member bloc. Magufuli was addressing a special sitting of the East African Legislative Assembly (EALA) in the Tanzanian capital, Dodoma. Speaking in Kiswahili, he urged the Assembly to strive to remove “as early as possible” barriers to trade, movement of people, and others afflicting the region. He said: “Our sole responsibility is to bring development to the people we lead. It is important we understand that the East African Community is for the citizens and not the leaders”. Industry, transport and energy sectors The Tanzanian President put emphasis on lawmakers attaching importance to the sectors of industry, transport and energy, among others, as key drivers of the bloc’s development. Asking them what would be the use of having abundant resources such as minerals, and others, that do not really benefit EAC citizens, Magufuli told regional lawmakers that the lack of an enhanced industry sector costs the region a lot. By exporting raw materials, he said, the region is only enriching others while it’s poor get poorer, a situation that no rational leader in the region should tolerate and urged EALA members to leave no stone unturned in their quest to protect and advance the region’s industrial sector. “If we don’t protect our own industries we shall just remain escorts. A market of 170 million is a big market. If we have...