Transport Cabinet Secretary James Macharia has confirmed second phase of the Standard Gauge Railway (SGR) line which runs from Nairobi to Naivasha has been fast-tracked and construction will commence in September. This will be followed closely by the the Naivasha – Kisumu line, which will pass through Narok, Bomet, Kericho, Nyamira then terminate in Kisumu where a block modern port will be constructed in case Uganda and Rwanda  pull out of the project. Macharia yesterday told the National Assembly’s Transport committee chaired by Starehe MP Maina Kamanda that neighbouring countries will be the losers in case they fail to link their line to the Kenyan network. The CS also allayed fears that Kenya will lose out in case  Rwanda and Uganda fail to construct line connecting the economies of the three countries, together with Southern Sudan, which is part of the Northern Corridor. “In the event that one or both of the two countries pulls out, Kenya has an option of ending its line at the Kisumu port from where the goods will be delivered to the two countries, as well as Tanzania. Our line will still be viable and we will not have a reason to build the Kisumu – Malaba line because that depend if Uganda are constructing a line linking ours at Malava,” Macharia said. During the First Infrastructure Summit attended by regional leaders held in June 2013, the Kenyan line was planned to end in Malaba from where Uganda was to pick to Kampala and then...

Transport and Infrastructure ministry is set to deploy a team of bureaucrats to Melbourne as Kenya starts negotiating the terms under which Australian construction firm, John Holland, will manage the Standard Gauge Railway (SGR). John Holland, which is said to have 65 years of experience in engineering servicing, contracting and managing rail projects, became a subsidiary of China Communications Construction Company (CCCC) following an acquisition deal finalised in 2015. Transport principal secretary Nyakera Irungu said the team set to leave on June 11 comprises officials from Kenya Railways Corporation (KRC), Kenya Ports Authority (KPA), Treasury, Office of the Attorney-General and the Ministry of Transport. “We are going to China and Australia to conduct due diligence on John Holland, the firm that will jointly manage SGR with CCCC,” said Mr Irungu. “During the trip, we will find out how John Holland will operate the rail, the capacity that they can accommodate, what they bring on board and how they will eventually integrate local expertise into the project.” Of importance also to Kenya is how freight, which is the key revenue attraction in the SGR, will be handled at the port of Mombasa. The deal to offer CCCC the contract was reached at a summit of the East African Community heads of State attended by President Uhuru Kenyatta in Kampala last month. “They directed that the contractors for the Mombasa-Kampala section undertake operations in the interim as the two partner states build their local capacities,” read a statement from the summit. Rift...

Kenya’s economy is expected to expand by 6 percent in 2016 after 5.6 percent growth last year, the country’s central bank governor said on Tuesday. Governor Patrick Njoroge also affirmed that Kenya’s current account deficit was expected to narrow to 5.5 percent ofGDP in 2016 from 6.8 percent. On Monday, the Central Bank of Kenya (CBK) cut the Central Bank Rate (CBR) from 11.50%, where it had been resting since last July, to 10.50%. Njoroge said falling inflation offered room for an easing of monetary policy. Inflation fell to 5.3 percent in April from 6.5 percent in March, well within the government’s target range. The Kenyan shilling has remained stable this year, supported by a narrower current account deficit driven by cheaper oil imports, improved earnings from tea and horticulture exports and strong diaspora remittances. These have helped boost foreign exchange reserves to $7.7bn, equivalent to 5 months of import cover, up from $7.4bn in March. Analysts say Kenya’s 2016 GDP growth will be supported by infrastructure projects, rising agricultural production, low oil prices and a looser monetary policy, even though ongoing security issues and uncertainty surrounding next year’s elections pose downside risks. In 2015, the Kenyan economy expanded 5.6%, which marked a pickup over 2014’s 5.3% reading. Source: Africa News

President Paul Kagame and his Kenyan counterpart Uhuru Kenyatta have endorsed the ‘New Deal on Energy’, a vehicle through which the African Development Bank (AfDB) will invest in delivering electricity for all Africans, by 2025. Both Kagame and Kenyatta were speaking on a live CNBC-Africa television debate that also featured AfDB president Dr Akinwumi Adesina, yesterday afternoon, on the sidelines of the 51st AfDB Annual Meeting ongoing in Lusaka, Zambia. Speaking to a fully packed audience, the three leaders shared their ideas on the ‘path to universal access to energy in Africa by 2025’, which is what the AfDB’s new deal on energy intends to achieve under President Adesina’s leadership. “This new deal on energy is a big deal for Africa,” said President Kagame adding that it brings a new momentum in the efforts of doing what Africa should otherwise have done, long time ago. Kenya President Uhuru Kenyatta also backed the ‘new deal’, noting that Africa has a lot of potential in renewable energy sources that just needs further enhancement. “We have heard and had enough of the theory. It is now time for practical engagement by supporting the AfDB to leverage Africa’s huge potential,” said President Kenyatta. In his remarks, Adesina noted that Kagame and Kenyatta represent what Africa needs most at the moment, the political will to translate Africa’s potential into tangible benefits for its people. “Money is not the key. Political will is all we need to get things done,” said Adesina. Dr Adesina noted that...

NAIROBI: President Paul Kagame paused and then rested his chin on his left hand when asked what appeared to be a simple question. “Resources are scarce,” he said to the question on which way Rwanda would go in the development of the Standard Gauge Railway (SGR). The line was originally planned to run from Mombasa in Kenya, through Uganda’s Kampala before terminating in his capital city, Kigali. “We will take the shorter route,” he said, confirming that Rwanda would tap into the alternate railway project planned by Tanzania. He was speaking at the World Economic Forum on Africa earlier this month. For years, whenever Kenya has coughed, its neighbours have caught a cold. But it now appears that these neighbours have hatched a plan to simply turn their backs to avoid the cold. From Dar es Salaam in Tanzania through Kigali in Rwanda, to Kampala in Uganda, and finally to Addis Ababa in Ethiopia, something new is brewing, and Kenya is losing. Even South Sudan, the newest entrant into the East African Community (EAC), seems to be on the fence. Burundi is indifferent, but the nation is limping, making any major investments at this time unlikely. Source: Standard Digital

It is now official. Kenya will no longer be the gateway to Africa’s Great Lakes Region. Rwanda announced last week that it would join Uganda to develop a new gateway to Tanzanian ports. This announcement follows hot on the heels of an earlier announcement by Uganda that its oil pipeline to the sea would go through Tanzania, contrary to the expectation that it would pass through Kenya. Some pundits may see this turn of events as a strategy to isolate Kenya in the region, but it may herald a new competitive environment that would benefit the entire region. For more than half a century, Uganda, Rwanda, Burundi and the Democratic Republic of Congo relied on the port of Mombasa, the East African Railways, and the relatively better road network in Kenya to import and export goods to and from these countries. Kenya took this opportunity for granted.  Unofficial, non-tariff barriers frustrated desperate landlocked countries. Due to the huge delays, perishable goods often got damaged on the way. Corruption added injury to an already-increasing pain on Kenyan roads. Tanzania, which has massive resources on the Indian Ocean, slept on the goldmine of the Dar and Tanga ports. Then came Magufuli, and he is turning out to be Tanzania’s knight in shining armour. The man is seen as a believable, reassuring, no-nonsense fixer. In one fell swoop, he has demolished the “coalition of the willing,” which threatened to isolate Tanzania as the unwilling partner in East African integration. Consequently, Tanzania may be on...

Africa's economy is likely to grow 3.7 percent this year as resilient private consumption and investment offsets the effect of a slump in commodity prices and global headwinds, the African Development Bank (AfDB) said on Monday. Launching its latest regional economic outlook in the Zambian capital, the AfDB also said growth could accelerate to 4.5 percent next year if commodity prices recovered and the global economy strengthened. Source: CNBC Africa

Worldwide the future of manufacturing is uncertain. Thanks to emerging technologies such as mobile connectivity, artificial intelligence, next-generation robotics, and 3D printing, supply chains and factory floors face transformations as significant as any since the last industrial revolution. This “Fourth Industrial Revolution” will feature new forms of collaboration that drive innovative value chains and business models that could leave traditional industrial patterns in the dust. Influenced by these global manufacturing trends, Africa has its own challenges. In order to develop its economic infrastructure and to improve its balance of payments, local beneficiation of the continent’s natural resources and agricultural products is essential.  The United Nations expects that Africa’s population will double to 2.5 billion people by 2050. The middle class is rising, indicating an increase in consumption. Moreover, the population growth indicates a dramatic need for employment. Africa has no alternative to developing a strong value-added manufacturing base. The continent, however, has a way to go: in 2014, 30 per cent of China’s GDP came from manufacturing, according to the World Bank. By comparison, Nigeria’s share stood at just 9 per cent, Kenya 12 per cent, Zambia 8 per cent. Africa has ample opportunities to grow its manufacturing base in a broad range of industries. Local beneficiation of resources in for example oil and gas is one example. Moreover, the growth of the population will spur growth in direct consumer industries such as food/agriculture and beverage, home and personal care, apparel, and even automotive. Other likely target sectors include secondary industries...

The East African region’s competitiveness can only be boosted if more investments are made in infrastructure, healthcare and education, a competitiveness report has shown. The 2015/2016 Africa Competitiveness Report shows that East Africa is the continent’s most competitive region with Rwanda being the most competitive economy in the region followed by Kenya. Overall, Rwanda is in third position in Africa after Mauritius and South Africa and 58th globally. The report findings indicate that East Africa’s favourable ranking largely owes to the diversity of its economies and business efficiency. However, the report findings indicate that a lot is desired in basic aspects such as infrastructure within and connecting the region outwards as well as healthcare and education. Improvements in education and healthcare will serve to improve human capital and market size, the report notes. “Although currently Africa’s fastest growing region, the EAC faces competitiveness challenges including infrastructure, human capital, technological readiness and market size. Life expectancy remains low and infant mortality high. Despite recent progress, secondary and tertiary enrolment rates remain low at 38 per cent and 4.5 per cent respectively which is lower than Ecowas and SADC,” the report reads in part. The report also takes into consideration the disparities within EAC member states, which cause some countries to bring down the overall performance of the region. “The greatest disparities in the EAC region are in the areas of institutions and financial markets development. Rwanda leads in institutions, infrastructure, health and primary education and market efficiencies. Kenya leads in business...

The 2016/2017 annual budget of the cash-strapped EAC will be tabled here on Thursday before the regional Assembly which starts its budget session here today. Mr Mfumukeko warned when the baton was handed over to him by Dr Richard Sezibera, a Rwanda national, of impending stringent measures to salvage the regional organization from the current financial crisis. He stated that EAC, now made of six member states after the recent admission of South Sudan, has never experienced such financial instability and that he as a chief executive of the regional body would propose stern measures geared at cost-cutting and accountability on the part of its officials. During the current 2015/2016 financial year which is coming to an end, the East African Legislative Assembly (Eala) approved a budget of $ 110,660,098 but by last month the Arusha-based Secretariat complained that the development partners, who contribute 70 per cent of the budget, had not disbursed about 30 per cent fo the expected funds. During the fiscal year coming to an end, EAC was compelled to phase out some projects funded by development partners due to declining support from donors. The $ 110.6m that was approved for expenditure was $14 million less than the 2014/2015 financial year budget which totalled $124 million. The next financial year budget will be read by Tanzania’s minister for Foreign Affairs, International and EAC Affairs Dr. Augustine Mahiga, in his capacity as the Chairperson of the EAC Council of Ministers, the policy organ of the Community. The unprecedented...