The World Bank Board has approved a mega project meant to strengthen selected higher institutions of learning in Eastern and Southern Africa to deliver quality postgraduate education and build collaborative research capacity in priority areas. The Eastern and Southern Africa Higher Education Centres of Excellence Project (ACE II), expected to close in 2021, will see each of the 24 Africa Centres of Excellence (ACE) funded to a tune of $6 million over five years. The project is good news for the regional higher learning institutions which are grappling with poor quality education due to limited research funding. Since the project will focus on supporting collaborative research, it is a step forward in fixing quality challenges in higher institutions of learning. If well implemented, the project will significantly enhance the quality of education in the region and this will reduce on the number of people who travel out of the region in search for better education. The Uganda-based IUCEA, an East African Community (EAC) institution responsible for coordinating the development of higher education and research, is the regional facilitation unit for the ACE II project. The EAC member countries should collaborate to ensure that IUCEA benefits all the member countries within the framework of fast tracking the integration process. Education is a key component in the integration process and having quality education in all member countries will go along away in fulfilling the goals of the integration. By the time the project concludes in 2021, the centre should have developed sufficient...

Import and export players have lauded the budgetary allocations for ports and roads. Kenya's infrastructural mega projects gained from the budgetary allocations presented on Wednesday by National Treasury CS Henry Rotich. The players in the export and import business are optimistic their businesses will expand, a move they say will lead to the country's development. The Association of Importers of Kenya chairman Peter Mambembe said the funds will improve services and efficiency in the trade. "The allocations will improve efficiency in service delivery and there is need for a more stringent rule to guard the funds from misuse,” said Mambembe. “We are pleased with the allocations towards the development of infrastructure in the port but the government has to do away with cartels at the port if efficiency is to be achieved,” he added. CS Rotich also said the allocations will also boost trade between Kenya and its East Africa states, saying that the government will prioritise the construction of roads like the Voi-Mwatate-Wundanyi and Malindi-Mombasa-Lunga Lunga roads. “I have allocated Sh5.5 billion for the Mombasa port development project, financed by development partners, and a further Sh500,000 million for acquisition of two ferries for the Likoni channel,” said the CS. The business atmosphere, according to Mambembe, will automatically change due to the expected improvements within the ports and roads. Source: hivi sasa

WHEN the first East African Community (EAC) collapsed in 1977, some in the Kenyan government celebrated with champagne. Since its resurrection in 2000, officials are more often found toasting its success. A regional club of six countries, the EAC is now the most integrated trading bloc on the continent. Its members agreed on a customs union in 2005, and a common market in 2010. The region is richer and more peaceful as a result, argues a new paper* from the International Growth Centre, a research organisation. Many things boost trade, from growth to international deals. The researchers use some fancy modelling to pick out the effect of the EAC. They find that bilateral trade between member countries was a whopping 213% higher in 2011 than it would otherwise have been. Trade gains from other regional blocs in the continent are smaller: around 110% in the Southern African Development Community (SADC), and 80% in the Common Market for Eastern and Southern Africa (COMESA). Those numbers for the EAC are all the more impressive because the available data stop before the EAC’s common market had properly come into effect. Progress on that front has sometimes stuttered. A 2014 “scorecard” identified 51 non-tariff barriers. Full implementation could double the income gains seen so far, say the researchers. Not surprisingly, it is landlocked Rwanda which would see the biggest benefits. Tanzania, which has dragged its feet on integration, would profit the least. The researchers are warier of the EAC’s other grand project: creating a...

The East African Business Council has elected Mr Econie Nijimbere from Burundi as its new Chairman for the period of 2016-2017. The Burundian is taking over from Mr Dennis Karera, who served at that capacity from the year 2015. Mr Nijimbere was serving as a Vice Chair. According to the statement issued yesterday, the new EABC chief is currently the President of Burundi Federal Chamber of Commerce and Industry (CFCIB). He has over 16 years of experience in the private sector, from 2010 to the present. He has also served as President of the Burundi Manufacturers Association as well as Board Member of the Burundi Revenue Authority (OBR).  In his acceptance speech, during the council annual general meeting held in Nairobi, Kenya, Mr Nijimbera thanked the outgoing Chairman Mr Karera and the Executive Committee for a job well done and the progress made so far. He outlined key areas that his tenure will focus on implementation of the EABC Strategic Plan 2015/18, extensive advocacy on issues outlined in our EABC Policy Advocacy Agenda document that aims at addressing key sectoral and cross cutting trading policy challenges as well as highlighting gaps and discrepancies in the implementation of the East African Community Customs Union and Common Market Protocols which are hindering East Africans from enjoying advantages presented by East African Community Integration and the wider EAC Common Market. Source: All Africa

East African Community regional integration has not evolved as envisaged. However, it is still achievable, given that the EAC partner states have harmonised most of their policies and internal and external tariffs. As EAC governments unveil their annual budgets, it is essential for the respective proposals to boost cross-border trading, movement of goods and manpower, and address the fundamental issue of non-tariff barriers across the region. Non-tariff barriers are restrictions and limitations that are obstacles to trade. They are not tariffs but rather take different forms of government participation. These include restrictive trade practices, administrative and custom entry procedures, charges on imports, technical barriers, sanitary and phytosanitary measures, institutional corruption, tedious licensing procedures, and transport, clearing and forwarding procedures. Non-tariff barriers have positive and negative effects and present a major stumbling block to full EAC integration. They trim the magnitude of imports in a country by promoting and cushioning local manufacturers and producers against dumping of sub-standard goods in the local markets. However, they also limit the movement of goods across the region and lead to increased cost of doing business, unnecessary delays at border points, and restricted opportunities for business expansion. The EAC committee on the elimination of non-tariff barriers reported that there were 40 unresolved barriers and three new ones in 2012. In 2014, the number of unresolved barriers had increased to 56 and the new ones to five. Insufficient infrastructural services have been identified as a major barrier that increases the cost of doing business and commodity...

East African Community (EAC) member states have prioritised development expenditure as countries look to further strengthen the growth agenda of the regional economies. In the national budget estimates presented yesterday, the regional bloc’s biggest economy Kenya will be spending $22.8 billion, Tanzania $13.5 billion, and Uganda $12 billion during the next financial year that starts on July 1. Rwanda plans to spend some $2.49 billion in the fiscal year 2016/17. Burundi budget reading is not aligned with that of the EAC bloc. Kenya While presenting the budget speech, Kenya’s Finance Cabinet Secretary Henry Rotich, said the 2016/17 budget will focus on infrastructure development, agriculture, including agro-processing to spur the country’s growth, among others. The minister also abolished tea and sugar development levy. The energy sector got Ksh39.9 billion, standard gauge railway (Ksh228.5 billion) and roads got Ksh147.6 billion. Tanzania In Tanzania, Minister for Finance Phillip Mpango indicated that the new budget is focusing on alleviating challenges of people in low-income groups, and setting the foundation for middle-income country. In a country, where the national debt reportedly stands at $20.94 billion as of March, programmes geared at supporting development were allocated 40 per cent of the total budget, an increase from 25 per cent this fiscal year. Among others, the Tanzanian government intends to borrow Tsh7.4 trillion from domestic revenue to fill the gaps of the fiscal year 2016/17. The government will also spend Sh17.7 trillion on operational costs and Sh11.8 trillion for development. Over Tsh4.77 trillion or 22.1 per cent...

Kenyans will acquire new clothes at affordable prices after the exemption of garments and footwear bought from export processing zones (EPZ) from paying 16 per cent value added tax (VAT). The government says the growth of EPZ in Kenya has been restricted by trade barriers and duty free imports from Common Market for Eastern and Southern Africa states. Industrialisation secretary Adan Mohamed said the move by the Treasury would see Kenyans buy new clothes, such as jeans at less than Sh1,000 from the current Sh1,500 following the VAT exemption. This, he hopes, will wean Kenyans from using second-hand clothes and shoes whose popularity has in large part led to the collapse of Kenya’s once robust textile companies, among them Rift Valley Textiles and Kisumu Cotton Mills. Kenya imports around 100,000 metric tonnes of second-hand clothes, shoes and accessories a year from Western countries aided by their low prices. “This is a good move by CS Rotich that will enable Kenyans to acquire new clothes at affordable rates and cut on second-hand clothes,” said Mr Mohamed. He also noted that the duty exemption would create an additional 20 to 30 per cent jobs in Kenya’s textile industry. Mr Mohamed said that Kenyans have been paying between 41-45 per cent duty to access goods from the EPZ, while the same items are sold cheaply outside Kenya as they do not attract taxes in the export market. Source: Business Daily

An increasing drive to promote domestic textile manufacturing in East Africa is threatening the trade in used clothing to the region, the Bureau of International Recycling (BIR) has been told. The warning was delivered at a session on the global trade in used clothing and textiles at the BIR’s annual Convention and Exhibition in Berlin last week (31 May – 1 June), where delegates disagreed on the status of the used clothing trade. While some  consider used clothing to be a product generated through sorting operations and recognised market specifications, others notably the East African Community (EAC), continued to regard used clothing as a waste and a threat to new clothing production. This view has given rise to calls in some parts of the world for a ban on used clothing imports. At a meeting on an EAC proposal to phase out imports of used textiles and footwear by 2019, BIR Textiles Division president, Mehdi Zerroug, of Framimex in France, said: “Second-hand clothing is a product and new clothing is a product – this needs to be understood.” EAC The EAC comprises six countries, namely: Uganda, Kenya, Tanzania, Rwanda, Burundi and South Sudan. Guest speaker Jalia Nabukalu Packwood, business development officer at Bangor University’s Sustainability Lab in the UK, explained that used textiles traders number in the many tens of thousands in places such as Uganda and Kenya. The convention heard that more than 80% of all clothing purchases in Uganda were used clothes, while Kenya collected US$ 54 million...

The Kenyan port of Mombasa and Tanzania's Dar es Salaam port are the traditional competitors but the Kenyan government is now planning a huge new port at Lamu, while Tanzania is developing Bagamoyo. Both ports will be larger than any other port in sub-Saharan Africa if completed as planned. They will also be at the centre of much bigger developments, with industrial zones being laid out and intensive farming being proposed. The Tanzanian authorities hope Bagamoyo will handle 20 million containers a year, that is 25 times larger than the port at Dar es Salaam. Kenya's planned Lamu port is expected to be just as big. However, these are the proposed, long term figures, which will be achieved over decades rather than years. Construction will take place in phases as and when required. The scale of the initial phases has not been determined but will be much more modest. One hurdle that is delaying the development of both projects is the question of compensation. In the case of Bagamoyo, 2,000 people have lost their homes or farmland to the project and associated industrial zone. The Tanzanian government says that it will pay a total of $20.9m (£14.4m). But the figure would be much higher if there was a plan to enlarge the Dar es Salaam port as it is already surrounded by urban development and has limited room for expansion. Apart from serving their own domestic markets, the Tanzanian and Kenyan ports will also be competing for a wider prize,...

Exports to Uganda have dropped by 35 per cent in the first quarter of the year, ending the landlocked state’s dominance as top destination for Kenya’s exports. Provisional data produced by the Kenya National Bureau of Statistics indicate that exports to Uganda dropped to Sh8.58 billion in the first three months of 2016 compared to Sh13.3 billion the same quarter last year. For the first time in more than a decade, Uganda falls to fourth position after Netherlands which tops the list with Sh11.89 billion worth of goods followed by UK which ordered Sh10.79 billion and US which accounted for Sh9.06 billion. Netherlands mainly orders Kenya’s flowers which it sells via its many auctions. Like UK, it is a member of the European Union which has extended duty-and-quota-free terms to Kenya and other developing countries under economic partnership agreements. Tanzania— which has been consistent in the recent past as second top export destination after Uganda — has also been dislodged to the seventh position after recording marginal drop of Sh5.25 billion compared to Sh5.81 billion the same period last year. Kenya initially showed strong affinity to the landlocked states in East Africa but of late, Uganda and Rwanda have drifted towards Tanzania with plans to link up their economies through crude pipeline and standard gauge railway line. The figures released last week indicate that apart from Uganda and Tanzania, exports to all other top destinations grew with Pakistan and Egypt also emerging as preferred markets for Kenyan goods. Pakistan, which...