Friday, September 23, 2016 Sandler, Travis & Rosenberg Trade Report U.S. Commerce Secretary Penny Pritzker hosted Sept. 20 a roundtable in New York with East African heads of state aimed at accelerating regional integration through practical and actionable private sector driven proposals in the areas of infrastructure, agribusiness technology, and travel and tourism. The Department of Commerce indicates that the East African leaders agreed to support these proposals, which are viewed as critical steps to expanding the bilateral trade and investment relationships between their respective economies and the United States. East African countries represented at the roundtable included Ethiopia, Uganda, Rwanda and Kenya. In the area of infrastructure, for example, East African leaders and Secretary Pritzker agreed to work together to address challenges in building large-­scale infrastructure with the goal of convening an infrastructure summit with U.S. investors and companies across the infrastructure value chain focused on specific projects in the critical areas of electricity, transport and water infrastructure. According to the DOC, the roundtable built on the achievements from the CEO regional integration roundtable that Secretary Pritzker co-chaired with Rwandan President Kagame in January 2016 during her trip to Africa with members of the President’s Advisory Council on Doing Business in Africa (PAC­-DBIA). The DOC also announced this week the appointment of 23 private sector leaders to the PAC­-DBIA, which is tasked with advising the president on strengthening commercial engagement between the U.S. and Africa. Specifically, the council provides information, analysis and recommendations that address the following issues. -...

DEVELOPING countries are set to dump controversial trade agreements with the European Union en masse following the Brexit vote, leading economists have said. Up and coming nations in Africa and the Caribbean will no longer see any worth in being tied to dictatorial Brussels policies now that the UK is no longer part of the bloc. And they could be about to torpedo the EU’s roll-out of Economic Partnership Agreements (EPA), which are designed to create a free-trade zone between Europe, Africa, the Caribbean and the Pacific. That is the view of top academics Christopher Stevens and Jane Kennan, from the Overseas Development Institute, who say Brexit has given many governments an excuse to pull out of the deeply unpopular scheme. Tanzania has already ditched a proposed deal between Brussels and the East Africa Community (ECA) countries, citing the “turmoil” engulfing the EU following the Brexit vote and the skewed terms of the agreement. The country’s Foreign Affairs permanent secretary Aziz Mlima blasted: “Our experts have established that the way it has been crafted, the EPA will not benefit local industries in East Africa. Instead it will lead to their destruction as developed countries are likely to dominate the market.” And now the two trade experts have predicted that a number of other African and Caribbean countries will follow suit, because for most Commonwealth countries Britain is by far the biggest market for their exports. In an essay on the future of Britain’s trade policy post-Brexit, the pair wrote: “Although...

The proposed Economic Partnership Agreement (EPA) between the East African Community and the European Union is not ideal for the region and could stifle the infant industries if passed as it is, some European Union Members of parliament told The New Times, yesterday. The agreement, they said,  could pose a risk to regional economies as their infant industries will face unfair competition due to products from the European Union. Marie Arena, a European Parliamentarian, told The New Times that the agreement was unfair as it is and, if enforced in its current form, it could promote unfair competition in the region. She pointed out that the European Union had pushed a hard bargain in the deal largely by ‘arm twisting’ Kenya which risked to lose access to the European market. “I think this kind of agreement is unfair for the East African region. Europe is pushing a very hard satance and they have taken Kenya as a leader. Kenya is the only one that has interest in this trade agreement because they are not a least developed country. They (Kenya) need the agreement to maintain access to the European market,” she said. There were fears that if the deal is not signed by September 30, 2016, Kenya could lose its access to the European Union market as it is not grouped among Least Developed Countries like her partners in the bloc who are granted duty free access to the EU for all products, except arms and ammunition. Arena, who is...

IN SUMMARY The Netherlands assistance to Kenya has been concentrated in supporting food security programmes, governance and human rights, improvement of the business climate, environmental conservation, sanitation as well as culture and sports. Kenya will not receive financial assistance from the Netherlands beginning 2020, the European nation has said, citing “significant” economic growth in the past decade that has turned the East African state into a middle-income country. The decision, which was made public in the country’s parliament, is expected to hit hard the Dutch government’s support programmes to some of Kenya’s most needy segments of the population and key governance institutions. The Netherlands assistance to Kenya has been concentrated in supporting food security programmes, governance and human rights, improvement of the business climate, environmental conservation, sanitation as well as culture and sports. Dutch Minister for Foreign Trade and Development Co-operation, Lilianne Ploumen, told her country’s Parliament that the relationship between the Netherlands and Kenya - after 2020 – will become purely that of “trade partners” hence the decision to stop aid. Referring to Kenya as a “middle income country,” Ms Ploumen said in an 11-page statement that the Kenyan economy had grown significantly over the past decade, forcing the Dutch government to set its sights on helping other more “needy” nations. “The government wants to focus when choosing new partners in the group of countries that our aid is most needed: the Least Developed Countries. ODA (overseas development aid) is most relevant in these countries and there it can...

Agriculture Principal  Secretary, Dr.  Richard  Lesiyampe has said that South Africa is yet to lift the ban on avocados from Kenya, six years on, despite the many deliberations. In 2010, South Africa banned the export of avocado from Kenya after the produce was found to be infested with fruit fly. Lesiyampe said this dealt a big blow to Kenyan farmers noting that avocado exports to South Africa were on average earning local farmers Shs. 120 million every year. “Kenya like many developing countries, is dependent on agriculture as a source of livelihood, income and for employment creation. Kenya, for instance earns approximately Shs 10 billion in foreign exchange every year from the export of horticultural produce,” said the PS. Speaking on Tuesday 20 September during the International Phytosanitary Conference held at the KEPHIS headquarters, Nairobi, the PS observed that agriculture is key to economic growth, as well as a determinant of equity in development and fundamental in reducing poverty and hunger. “Kenyan avocados are not accepted in South Africa because of a pest, which you are all aware off known as bactrocera invadens, or the fruit fly. Further, the export of chillies from Kenya and other countries to international markets has been affected by the False Coddling Moth,” Lesiyampe said . Kenya Plant Health Inspectorate Service (KEPHIS) Managing Director, Ms. Esther Kimani said that pests make food availability in many developing countries a challenge to overcome as it compromises the quality of food for the people. Kimani called for building...

On Tuesday, U.S. Secretary of Commerce Penny Pritzker hosted the East African Heads of State roundtable in New York City. Held alongside the United Nations General Assembly meeting and the U.S.-Africa Business Forum, the roundtable brought together East African leaders to discuss business development, investment opportunities, and economic growth in their respective countries. Hailemariam Desalegn, Prime Minister of Ethiopia, Yoweri Kaguta Museveni, President of Uganda, Paul Kagame, President of Rwanda, and William Ruto, Deputy President of Kenya participated, along with multiple U.S. and African CEOs from companies doing business in the region. The roundtable built on the achievements from the CEO regional integration roundtable Secretary Pritzker co-chaired with President Kagame in January 2016 during her trip to Africa with members of the President’s Advisory Council on Doing Business in Africa (PAC-DBIA). Secretary Pritzker facilitated yesterday’s discussion aimed at accelerating regional integration through practical and actionable private sector driven proposals in the areas of travel and tourism, agribusiness technology, and infrastructure. The East African leaders agreed to support these proposals, which are critical steps to expanding the bilateral trade and investment relationships between their respective countries and with the United States. The impact of the travel and tourism sector on the economic and social development of a country can be enormous. Given this, Secretary Pritzker facilitated an agreement among the East African leaders and the U.S. Departments of Commerce and State to launch an annual rotating U.S.-East Africa Travel and Tourism Dialogue to promote East Africa as a top global travel...

Africa’s immense economic potential, increasing integration into global markets, expanding infrastructure, and demographic boom provide a remarkable opportunity to enhance U.S. trade and investment ties across the continent.  African countries are tackling economic challenges by diversifying their economies, streamlining regional and global economic cooperation, and innovating to overcome barriers to trade and investment.  The United States is committed to being a partner in these efforts, including through initiatives such as the Doing Business in Africa Campaign, Power Africa, and Trade Africa.  Taking into account these and other efforts, at the 2014 U.S.-Africa Business Forum (USABF) co-hosted by the U.S. Department of Commerce (Commerce) and Bloomberg Philanthropies, $33 billion in commitments, including $14 billion in private sector deals and commitments, were made to support economic growth across Africa.  Over the last two years, Commerce has tracked nearly $15 billion in additional private sector deals reached between U.S. and African partners, and from 2008 to 2015 U.S. direct investment in Africa rose from $37 billion to $64 billion on a historic-cost basis - an increase of more than 70 percent.  That’s more than double the total global official development assistance that went to Africa in 2015.  ‎Today’s U.S.-Africa Business Forum builds upon the partnerships created in 2014 with new commitments to mobilize an additional $9.1 billion in trade and investment to support the development of Africa’s consumer goods, construction, energy, healthcare, manufacturing, telecommunications, and transportation sectors. The U.S. Government has Expanded its Presence and Economic Engagement in Africa Since 2008, Commerce has doubled...

MPs yesterday put aside their political differences to ratify a trade agreement that will allow Kenyan traders free access to the European market. In a special parliamentary sitting, the lawmakers unanimously voted for the ratification of the Economic Partnership Agreement (EPA) between the European Union and the East African Community (EAC). This decision offers a ray of hope to Kenyan traders, especially those exporting flowers, fruits, fish and livestock products to the 28-member market. The decision to hold a special sitting to ratify the agreement is said to have been pushed by the Executive, which has been burning the mid-night oil to have the agreement ratified ahead of the October 1, deadline. Now Kenya has until September 30, to rally its four EAC peers Uganda, Tanzania, Rwanda and Burundi to sign the deal, or risk having its exports to the EU slapped with punitive taxes of up to 22 per cent. Kenya being the only middle-income economy in the region has found itself isolated, fighting alone for the ratification of the trade deal that has a huge bearing on the country’s employment and economy. Other countries do not stand to lose anything considering they automatically qualify given their position as least developed countries. However, the Kenyan Government was challenged to put in place necessary environment for traders to take advantage of the agreement including in the areas of leather, cement, horticulture, livestock and meat. Emurua Dikirr MP, Yohana Ng’eno said there was need for the East African states to speak...

The Government has announced plans to partner with the private sector to build a six-lane highway from Mombasa to Nairobi are at an advanced stage. Transport Cabinet Secretary James Macharia said the project is bankable and that private sector players will be invited to express interest in the mega project. Speaking at a Nairobi hotel during the Nairobi Business Stakeholders luncheon hosted by the Kenya Ports Authority (KPA), the CS said the six-lane road and the Standard Gauge Railway (SGR) will link Nairobi with the Port of Mombasa, and ease traffic flow besides shortening the time taken for cargo to reach Nairobi and the region. Mr Macharia said the project is part of the Government’s initiatives to expand road infrastructure to complement the upgrading of the railway line to SGR and the expansion of the Port of Mombasa and Lamu Port. “The port cannot be seen in isolation – it should be seen as an integral part of infrastructure development,” said the Cabinet Secretary. He added that to improve access to the Second Container Terminal at the Port of Mombasa and to avoid the congestion at Changamwe area, a new road was being built from Port Reitz to the Second Container Terminal. “The road is a 10.5 km dual carriageway and is expected to be completed by 18th May, 2018 at a cost of Sh11 billion,” he said. Macharia outlined the need to build special economic zones and inland container terminals to take advantage of the new infrastructure network. Transport...

Transhipment traffic dropped by 9.5 per cent in the six months to June raising concerns on the future of the segment which has set Mombasa port aside as a regional hub. Kenya Ports Authority (KPA) managing director Catherine Mturi-Wairi last week said that transhipment traffic dropped to 260,444 tonnes in the six months from 287,952 tonnes for a similar period in 2015. Transhipment involves large vessels docking at the port and redistributing their cargo to smaller ships that serve regional ports. The ports include Dar es Salaam, Pemba, Mogadishu and Mauritius Island. “KPA is cognisant of the decline in volumes and towards that end, a multiagency taskforce has been formed to look into ways of revamping transhipment traffic through the Port of Mombasa,” Mrs Mturi-Wairi said. Market niche “I am reliably informed that the taskforce has developed an action plan on the activities to be undertaken to recapture this market niche. We expect to see a positive trend by close of the year.” KPA had earlier in the year stated it was eyeing higher transhipment volumes assisted by the second container terminal in Mombasa. Shipping lines have previously asked KPA to ease the procedure and cost of transhipment, adding that most of those engaging in the business at Mombasa port mostly consider convenience rather than commercial reasons. Transhipment cargo has grown nearly fivefold since 2013 when the port handled 100,374 tonnes. This growth played a key role in pushing the total container traffic handled at the port to over one...