It is too early to be certain, but this may be the first sign of African countries using Brexit to renegotiate and leverage fairer trade terms. The last few months have seen some significant developments for African trade and integration. These advances come at a crucial time for African countries, which have been particularly hard hit by the slump in commodity prices, China’s economic downturn, and higher external borrowing costs. This has resulted in slower GDP growth than expected, currency fluctuations and reduced investment – particularly in resource-rich countries. New dynamics are emerging as a result of two major developments: first, a set of agreements between regional African blocs and the European Union, as well as between African countries themselves. Second, Brexit may change the thrust of African trade with both the EU and Britain. Combined, they are likely to have some positive economic implications for Africa. Intra-African trade has comprised about 15% of Africa’s total trade over the last decade. This compares with intra-regional trade rates of, for example, 17% in South and Central America, and 62% in Asia. African exports to the EU have increased substantially in recent years, from €85 billion in 2004 to more than €150 billion in 2014. The recent trade and integration developments should raise economic activity and competitiveness in non-extractive sectors, leading to higher GDP growth and greater economic diversification. They are intended to boost intra-African trade, particularly in goods, and may increase African trade with the EU and Britain. Trade to drive...

In this special report, Dr. Einir Young and  Jalia Nabukalu Packwood of Bangor University, take a look at the market challenges and development issues facing used clothing exports and East Africa. The Textiles Recycling Conference in London will hear more about this market (see the conference website for more details). In March 2016, the heads of state of the East African Community (EAC) agreed to phase out the importation of used textiles and leather products from third countries within three years (by 2019), with the view of promoting vertical integration of the industries in the textile and leather sector within the EAC. When looking at this decision from the outside, one has to wonder why the EAC leaders came to such a conclusion given that almost 80% of the population of some EAC countries such as Uganda purchase used clothes and the trade employs thousands of people who would otherwise be without work. It isn’t clear how it will be possible to grow the new textile and leather industry in the EAC as the appropriate infrastructure to support the sector’s growth is limited. This directive and previous EAC policies aimed at stopping the trade in used textiles is not good news for the UK textile recycling sector or that of Europe, America and other exporting countries. UK charities, textile sorters, processors and traders have been affected as a result of a reduction in demand and falling prices per bale.  This in turn threatens the progress made in the UK and...

By Sylivester Domasa The government has outlined a three-year timeline for the construction of a 7.6 billion US dollar (15 trillion/-) railway line - a major trade artery between Tanzania and its landlocked neighbours of Burundi, Rwanda and Democratic Republic of Congo (DRC). The Standard Gauge project, which is supported by China's Exim Bank, is scheduled to start anytime from now, the Minister for Works, Transport and Communications, Professor Makame Mbarawa, has confirmed. "The planned standard gauge line from Dar es Salaam-Tabora-Isaka-Mwanza and Kaliua to Mpanda, Isaka to Lusumo and Uvinza to Msongati, some 2,560-kilometres will be implemented by three contractors and will take two phases," he said. Prof Mbarawa further noted that each contractor will need to complete the job in 18 months-time or about three years for the two phases. According to the minister, the Board of Directors of Reli Assets Holding Company (RAHCO) met on Monday in Dar es Salaam purposely to issue a tender for the construction of the 200-kilometre stretch from Dar es Salaam to Morogoro. The standard gauge line is projected to take advantage of a planned 10 billion US dollar Bagamoyo port, discovery of natural gas and massive helium gas prospects in the country. Government officials had it that the iconic infrastructure would open up more trade opportunities, reduce road traffic and amicably speed-up economic growth in the eastern-African developing country. Giving further details about the project, the transport minister said the new railway will have a speed capacity of between 120 and...

East Africa is set to be the fastest growing region in Africa this year after posting a regional growth rate of 6.7 percent, prompted by the sharp rise is cement use. Throughout the region, the use of cement has been on the rise as construction sites crop up. Kenya National Bureau of Statistics (KNBS) data shows the consumption of cement in Kenya reached 5.23 million metric tonnes in November 2015, slightly higher than the 5.19 million metric tonnes registered in 2014. The data show construction sector grew by 11.3 per cent in the first quarter of 2015 compared to a growth of 7.6 per cent in a similar period in 2014. The construction sector is estimated to have expanded by 14.1 per cent between July to September compared to a growth of 8.8 per cent in the same period of 2014. The growth was on account of increased public infrastructure projects and private sector development in the real estate sector. In Uganda, cement consumption is expected to increase by at least 12% over the next 3 years. Tanzania has made great strides in improving its infrastructure with the cement industry being a key beneficiary of the building boom. The East African governments are now focused on infrastructural delivery and ways to close the most important infrastructure gaps in planning for new cities. Both the transport and power sectors have critical infrastructure needs in the region and ICT infrastructure is another growing sector now considered key to development. Africa has the...

A key objective of the conference is to build up African ownership of its own vision of growth and development. TOKYO International Conference on African Development, "TICAD 6" just ended in Nairobi, Kenya and in attendance were several African Presidents and Prime Ministers including our own Muhammadu Buhari and the co-convener of the conference, Shinzo Abe, the head of the Japanese government. The TICAD seeks a win-win partnership between Japan and Africa. A key objective of the conference is to build up African ownership of its own vision of growth and development. In furtherance of this, Japan seeks to differ with the other players on the continent by placing emphasis on high quality infrastructure that do more than job creation by transferring technology through the training of youth and women. The conference held every five years from the time it started in 1993 until the last one in 2003 when it was decided that it should be convened every three years instead. The one that just finished is significant in the sense that this was the first time it took place in Africa. They met in Japan all the time in the past. Another significant departure is the recognition of the role of the private sector in the economic take-off of the continent. In this respect, more than 100 Chief Executive Officers, CEOs from leading Japanese companies accompanied Prime Minister Abe. This is a clear indication that more and more Japanese companies are eying the African continent. A modest number of...

This comes in the wake of heightened diplomatic efforts by the East African Community Partner states to resolve issues that have stalled the signing of the pact. CS Mohamed leads a delegation that includes Principal Secretaries Chris Kiptoo of Trade, Betty Maina of East African Community and other government officials. The agreement has been ready for signing after undergoing translation into the EU official languages and Kiswahili. The signing of the EPA, which was scheduled to happen on July 18, 2016, did not take place as a result of a request by some EAC Partner States not to sign at the time due to circumstances that they were facing. “This development poses a great risk to Kenya unless it is addressed before the deadline of 1st October 2016 that the EU put for EAC to sign and ratify the EPA in order for EAC products to continue accessing the EU market on duty free quota basis”, said Cabinet Secretary Adan Mohamed. The government has been undertaking high level bilateral consultations with EAC Partner States geared towards agreeing on alternatives for signing of the EPA over the past 3 months. This matter is also to be deliberated upon in the EAC Summit that has been convened for early September. President Uhuru Kenyatta has tasked CS Adan Mohamed with resolving the impasse. Source: Citizen FM

Low prices are increasingly pulling a number of cross-border traders to source maize from Uganda as Kenya grapples with a shortage. Data compiled by the Regional Agricultural Trade Intelligence Network (RATIN) shows that in the last seven days alone, traders moved a total of 647 tonnes of maize into Kenya, mainly through the Busia border. About eight tonnes of maize came in through Lwakhakha and Malaba borders. This comes in the wake of an increase in maize prices across the East African Community as the head smut maize disease continues to subdue production in Kenya. The disease has reportedly ravaged maize farms in the country’s bread basket of North Rift, threatening up to 50 per cent of projected output. As of yesterday, a 90kg bag of maize from Uganda was retailing at Sh4,911 in Mombasa and Sh3,572 in Kisumu, a possible indicator of the effects of the head smut, which is said to be a new maize disease that has affected all varieties of the commodity. Last week, for instance, a 90kg bag of maize from Uganda was retailing at Sh3,150 for a 90 kilogram bag in Nakuru and Sh2,696 in Machakos. Uganda was the net supplier of maize to other EAC countries. The landlocked country supplied Rwanda with 120 tonnes of maize during the same period. Due to inadequate long rains between March and May, the Agriculture ministry reckons that the country will rely on imports to meet its annual maize needs of nearly 40 million bags. A poor...

President Uhuru Kenyatta will on Friday commission the Mombasa port second container terminal (CT2), one of the biggest projects along the East African. The Kenya Ports Authority (KPA) said the project is part of the Jubilee administration’s flagship projects under Vision 2030. The project was funded on a government-to-government arrangement with Japan which provides a cheap loan of 0.2 per cent interest with a repayment period of 30 years. The terminal lies on a 100 acre piece of land which was reclaimed from the sea to create a 900-meter long quay. The project is set to be done in three phases. Phase one, which is set to be commissioned, consists of two berths that are numbers 20 with a quay length of 210 meters and a draft of 12 meters to serve medium size vessels. KPA Corporate Affairs Manager Hajj Masemo, in a statement announcing the commissioning, said berth No 21 has a 350-meter long quay and a depth of 15 meters that is capable of accommodating post-Panamax vessels of 8,000 twenty-foot equivalent units (TEU) capacity. “This first phase was constructed at a cost of Sh30 billion which includes supply of two ship-to-shore (STS) gantry cranes and four rubber tyred gantry (RTG) cranes for yard operations,” said the statement sent to newsrooms on Saturday. A new six lane access road was also constructed joining the Port Reitz road for ease of entry and exit of cargo traffic from East Africa’s largest port. Source: Daily Nation Source: Hellenic Shipping News

Kenya has secured nearly $270m from Japan to build a new industrial and commercial hub near the port of Mombasa. The loan and grant package will fund basic infrastructure for a 1,326-hectare special economic zone (SEZ) at Dongo Kundu, intended to boost Kenya’s economy and accelerate the movement of goods in East Africa. Kenya and Japan signed the MoU in Japan at the Tokyo International Convention on Africa Development, which concluded 28 August. The $269.7m on offer breaks down into a long-term, low-interest loan of $210.8m and $58.9m in grants, reports The Daily Nation. The first phase of the SEZ is scheduled to be ready by 2019, and is part of Kenya’s plan to ramp up capacity at Mombasa, eastern Africa’s biggest port, which has seen the volume of goods flow-through increase beyond forecasts. Japan helped Kenya produce a master plan for Mombasa port development in October last year. The project involves the development of infrastructure, including Berth 1 at the Port of Mombasa, access roads, transmission line, water supply pipeline, a sub-station, drainage, power supply and a free trade zone. It will also entail establishment of a free trade zone on between 300 and 500 acres for wholesale and retail trading, breaking bulk, re-packaging logistics, warehousing, handling and storage of goods. According to The Daily Nation, the area will be reserved for re-exports to the 400 million-people Common Market for Eastern and Southern Africa (Comesa), allowing trans-shipment of cargo without inspection or customs duty. The Comesa bloc is the...

MOMBASA: The first train on the standard gauge railway (SGR) line will make its way from the Port of Mombasa to Nairobi in June next year. But as this date draws closer, players in road transport are getting increasingly jittery about their future. Those involved in logistics along the Northern Corridor fear the SGR line will render thousands jobless and waste millions of shillings in investments, as the train replaces the bus and truck. Truck operators have dominated cargo ferrying from Mombasa to various inland destinations, with rail volumes dropping from about 70 per cent in the 1970s and 80s, to a paltry 5 per cent today. Competitive rates But while there is one camp of worried investors, there is another that is optimistic innovation and competitive rates will keep the industry afloat, particularly as trucks offer ‘last mile’ convenience in cargo delivery. READ MORE Kenya now battlefront for China and Japan President Uhuru asks landowners to support infrastructural projects 400 people killed in motorcycle accidents since January In an interview last week, Kenya Railways Corporation (KR) managing director Atanas Maina said the construction of the SGR track was 90 per cent complete, with 440 kilometres of rail having been laid. He added that test runs will begin in March next year, with commercial operations set for June, when one train will pull a record 200 containers between the port and the Embakasi Inland Container Depot (ICD) in Nairobi . It is expected that four trains will haul containers daily,...