NAIROBI, KENYA - Kenya’s economic performance was more solid in 2015 than most other large African economies.   The Gross Domestic Product (GDP) is estimated to have expanded by 5.6% in 2015, a slight improvement compared to 5.3% in 2014. The growth was mainly supported by a stable macroeconomic environment and improvement in outputs of agriculture, construction, finance and insurance and real estate. Inflation eased from 6.9% in 2014 to 6.6% in 2015 due to lower energy and transport prices.  Interest rates recorded mixed performance with spikes and dips for most nominal rates in 2015. The Central Bank Rate (CBR) increased from 8.5% in December 2014 to 10.0% and 11.5% in June and December 2015, respectively. The weighted average interest rates on commercial banks loans and advances rose by 1.4% points to 17.5% in December 2015 compared to a rise of 15.9% in December 2014. Generally, the Kenya Shilling depreciated against the major trading international currencies. TheKenya Shilling weakened against the US Dollar, Chinese Yuan, Indian Rupee and Pound Sterling by 11.7%, 9.5%, 6.3% and 3.7%, respectively, in 2015. However, the Kenya Shilling gained against the Euro, South African Rand and 100 Japanese Yen by 6.7%, 4.7% and 2.6%, respectively, in 2015. Within the EAC region, the Kenya Shilling displayed mixed performance, strengthening against the Ugandan Shilling and Tanzanian Shilling by 11.5% and 9.5%, respectively but weakening against the Rwandese Franc by 9.0%. The depreciation of the currency was mainly due to the global strengthening of the US Dollar on...

Presidents Uhuru Kenyatta and José Eduardo dos Santos (Angola) focused on trade and bilateral cooperation during their talks in Luanda on Tuesday. The talks were held on the sidelines of the 6th International Conference on the Great Lakes region (ICGLR). Uhuru and Jose considered easing the visa regime to ensure Kenyans have improved access to Angola’s markets. Angola's private sector will in return make the most of the opportunities that Kenya offers. Under Kenya’s progressive visa regime, Angolans can already access visas on arrival at a Kenyan port. At Uhuru's request, Jose said his country will look into allowing national carrier Kenyan Airways to increase scheduled direct passenger flights. He said they will also consider allowing KQ to use larger aircraft to replace the current Embraer and Boeing 737 that ply the route thrice a week, and launch cargo flights. He said this will be possible when the construction of a new airport is completed. Kenya also sought a review of the rules governing Angola's investor licenses and work permits. Uhuru requested that the wealthy Southwest African nation reconsider foreign exchange regulations which hamper business relations. The leaders agreed that the matter be dealt with in the context of a wider exchange of agreements and Memoranda of Understanding when the two leaders hold a summit. Jose said he will honour Uhuru's invitation for a state visit in the second half of the year. Kenyan Foreign Ministry officials said they hoped to pin down an August date. The Angolan leader was...

Romania’s Government aims to stimulate the country’s exports to Africa and has signed, together with other EU countries, an economic partnership agreement with the East African Community (EAC) states. Romania anticipates that the agreement will help it export Dacia Logan cars, communication equipment, mineral water to Burindi, Kenya, Rwanda, Tanzania, and Uganda, reports local Profit.ro. The Government also hopes that the partnership will help increase Romania’s exports of construction materials, fertilizers, cosmetics, and pharmaceutical products to these countries. Romania’s trade with EAC countries totaled EUR 32 million in 2015, consisting in EUR 11.6 million exports and EUR 20.4 million imports. Source: Romania - insider.com

An urban planning policy for the East African Community (EAC) will create a network for the allocation of investment and for the production and sale of most goods and services once adopted, a regional parliamentarian said. MP Nancy Abisai earlier this month urged the East African Legislative Assembly (EALA) to adopt a motion in support of an urban planning policy for the bloc, with view to empower the urban poor. Shortly before the motion was adopted, the Kenyan lawmaker told the Assembly that poor urban governance and inappropriate policy frameworks contribute to the vulnerability of the urban poor. Corruption, inappropriate policies, and cumbersome regulatory requirements in EAC cities, she said, lead to deprivations such as inadequate infrastructure and environmental services, limited access to school and health care and social exclusion. “Better urban governance is, therefore, a necessary condition for empowering the urban poor and improving their opportunities and security,” Abisai said. “Urban planning will reduce social inequality. Social and economic inequalities are apparent in urban areas and are growing in all the cities in the EAC partner states and can lead to social and political clashes.” Augustin Rwomushana, Director of Urban Economic Development in the City of Kigali, told The New Times last week that EALA’s resolution is a catalyst for increasing urban network of regional cities, towns, and villages encompassing all aspects of the environment within which societies’ economic and social interactions take place. Rwomushana added: “Nationally, the resolution will create a network for the allocation of investment and...

The horticulture sector stands to lose about Sh4 billion monthly if a key trade deal with the European Union is not signed by October 1. Regional countries that make up the East African Community (EAC) are supposed to sign the Economic Partnership Agreement (EPA) jointly. The agreement gives the region’s products duty-free export access to European markets. For the EPAs to be valid, the entire region needed to agree to them, but special concessions would remain in place for least developing countries. Kenya, therefore, stands to lose the most if export subsidies are withdrawn. However, Tanzania and Uganda have been dragging their feet in reaching the deal. Kenya Flower Council (KFC) Chairman Richard Fox said failure by Kenya to sign the EPA will subject it to export duty of between 8 per cent and 12 per cent, which will amount to 3 million pounds per month (Sh4 billion). Kenya is the only country in the EAC considered a developing country, while its neighbours are still ranked as least developed countries (LDC), thus allowing them duty free market access. The LDC countries are not required to sign EPAs since their preferences will continue under the Everything But Arms (EBA) scheme. Under EBA, poor nations are granted duty free access to the EU for all products, except arms and ammunition and 41 tariff lines concerning rice and sugar, on which duty free quotas are established until full liberalisation. KFC Chief Executive Officer Jane Ngige said failure to sign the pact will put...

AR: How would you describe the civil and infrastructure markets in Africa? There is a clear consensus that infrastructure development currently is a focus area across the entire African continent, including the markets that we serve in Kenya, Tanzania, Uganda, Ghana, Nigeria and Sierra Leone; this is emphasised by the number of currently ongoing road, rail and port projects in these markets. The medium term macro-economic challenges include pressure on government revenues, elections, currency volatility and slow decision making by foreign investors and donors. In the short-term we have identified excellent prospects in East Africa. In Kenya, the focus has shifted to road projects now that the Standard Gauge Railway project is well underway; the Tanzanian and Ugandan governments are settling down after their recent respective elections and have announced a number of mega projects that will attract great interest and investment. In West Africa we have actually seen a decline and this may continue through 2016. Nigeria, although it has recently announced its budget and intent to pay contractors, will depend upon the timing and ultimate solution surrounding foreign exchange restrictions, which have negatively impacted the economy. Ghana will also be negatively impacted due to continued low oil and commodity prices and output, as well as the upcoming election and adverse impacts of the “missing” Cocoa Board Funds (which fund much of the feeder road development). Panafrican remains bullish about the road infrastructure sector, which is why we sought out the addition of the world class Wirtgen range of...

NAIROBI (HAN) June 13.2016. Public Diplomacy & Regional Security News. East African governments are determined to succeed in their global races to create growth and deliver lasting prosperity. They recognise that to build a strong economy necessary for a fairer society, they require infrastructure that competes with the best in the world. One only needs to look at the steady and substantial infrastructure spends over the years. The Kenyan 2016/2017) budget did not disappoint. Allocations of over $3.5 billion, representing over 15 per cent of the budgetary allocations, were channelled towards infrastructure and apportioned as follows, undoubtedly in order of priority; standard gauge railway (SGR) $1.55 billion, roads  $1.48 billion, energy $0.40 billion, Lapsset $100 million and ports $55 million. As expected, the majority of the Kenyan budget has been allocated to projects aimed at enhancing transport and logistics, in order to ease the cost of doing business in the country and bolster its competitive edge compared to its peers. It is projected that total traffic on the Northern corridor will double in 2016 from the 2013 levels of 21.5 million tonnes. The Tanzanian 2016/17 infrastructure budget also has a strong focus on developing its Central corridor; which undoubtedly will create strong competition for the Kenyan Northern corridor. Tanzania allocated $143 million to accelerate developments to renovate the Central railway line that runs from Dar es Salaam to Kigoma on Lake Tanganyika; and $9 million to the construction of the Mbegani port in Bagamoyo. The Ugandan government is likely to benefit...

MOMBASA, KENYA: Importers using the port of Mombasa have expressed fear that Kenya and its neighbours might miss a global deadline requiring them to weigh all cargo at the port of loading before it is shipped. The International Maritime Organisation (IMO) imposed the regulation three years ago to improve maritime safety and integrity of cargo by tracking its weight on transit and set July 1 this year as the deadline for shippers to comply. Cargo owners in the region have indicated it would take urgent preparations and further sensitisation for the country to meet the July 1 deadline. East African Shippers Council (EASC) chief executive officer Gilbert Langat said although the global rule was agreed upon three years ago, Kenya might be forced to negotiate for extension of time because it was not yet ready less than a month when the new rule enters into force. Mr Langat said it was not yet clear what percentage cost would be factored as weighing charge and exactly where the exercise will take place; at the port of Mombasa or container depots. "There is need to identify third parties with well calibrated weighing equipment to avoid any hitches. It is also important for the Kenya Maritime Authority (KMA) as the industry regulator to determine the percentage cost of weighing the containers and ensure there is no exploitation in the process," Langat said. KMA has said it would be mandatory in Kenya to determine the weight of packed shipping containers before they are loaded...

The Kenya Revenue Authority (KRA) is set to auction unclaimed containers and vehicles at the Port of Mombasa. Regional Manager Nicholas Kinoti noted that KRA had put in place logistics to ensure the exercise runs smoothly. According to the Nation, Kinoti said adequate time was given to potential buyers to view an assortment of cargo for sale on Friday and Monday last week. “We are going to auction all overstayed goods and will hold these auctions regularly to discourage importers from keeping cargo at the port,” said Mr Kinoti. This comes after a 60-day waiver for cargo that was imported before November 2014 expired on Thursday May 12, with only 16 containers and 98 vehicles being cleared. However, 1,046 vehicles and 1,159 containers still remain unclaimed according to statistics released by KRA. “Despite the publicity given to the amnesty, the response was still worse than the previous amnesties in 2015,” added Mr Kinoti. The move by the tax collector is set to ease congestion at the Mombasa port. Source: hivisasa

The European Union and six countries of the Southern African Development Community (SADC) finally signed an Economic Partnership Agreement (EPA) on Friday (10 June) after more than a decade of talks – in a move that gives Botswana, Lesotho, Mozambique, Namibia and Swaziland duty-free access to the EU. For South Africa, the sixth country in the SADC, its products will see improved preferential treatment over and above what is already covered by the existing bilateral EU-South Africa Trade and Development Cooperation Agreement into the EU market. In particular, the agreement increases the flexibility of Southern African producers to put together products from components from various countries, without the risk of losing their free access to the EU market. The EPA is a development-oriented free trade agreement that takes into account the different levels of development of each partner nation. It is the  the first of its kind between the EU and an African region pursuing economic integration. The agreement was signed by EU trade commissioner Cecilia Malmström, who said: "We want to base our trade relations with our partners in the Southern African region on commonly agreed, stable rules. Trade has helped lift millions of people from poverty throughout the years. Thanks to agreements like this one, we are preparing the ground for that process to continue." By signing the EPA, all participants commit themselves to act towards sustainable development and to uphold social and environmental standards. The agreement also establishes a consultation procedure for environmental or labour issues and defines a comprehensive list of areas...