While Europe is on the verge of breaking up, Africa is reaping the benefits of integrating, growing and developing its trading blocks The collapse of virtual borders is one of the most remarkable things to have happened in our lifetimes. In the world of cyberspace, time and distance have become almost peripheral considerations when it comes to doing business. Services from software development to accounting can be delivered across the world in the blink of an eye. Future business leaders will struggle to imagine an era when communication was neither immediate nor virtually free. But in the physical world, integration between and even within countries has happened at a much slower pace. In some regions, high freight costs are made worse by antiquated working practices, such as demanding cash deposits of $1,000 to $5,000 instead of accepting insurance. At too many borders, goods still hang around and wait needlessly, raising costs and hurting business competitiveness. There are plenty of successful examples of regional economic integration, from Europe’s single market to, increasingly, the East African Community (EAC), the fastest growing bloc on the African continent. But for every success there is a graveyard of stalled or stunted regional initiatives to remove barriers to trade and investment. This is unfortunate, because for many smaller economies, especially landlocked ones, regional integration is not a policy option, it’s a necessity. Building trade blocs with neighbouring countries can help small countries to get access to ports. It can help them achieve economies of scale, facilitate...

It probable that among the 1,200 visitors due in Kigali for the World Economic Forum for Africa (WEF 2016) this week, many will be surprised that they can hop over to either Kenya or Uganda using the same visa. The visa goes for only $100 and more convenient than before when one had to tackle each country’s immigration singularly. Now with the one visa, it allows access to the three countries for up to 90 days. The visa can be bought at the point of entry into any of these countries. For those who are interested in visiting one of the East African countries only, the fee will remain at $50 for Uganda and Kenya, and $30 for Rwanda. This is a great opportunity to tout the merits of the East African Single Visa launched two years ago and currently incorporating Kenya, Rwanda and Uganda. Burundi and Tanzania have more than once indicated a strong interest to join the club. The East African Community (EAC) sees itself moving towards a common agenda and by showing visitors the convenience of the Single Visa, they may just become more intrigued into investing in the region. If not right way, but at least take the time to go out and look about for opportunities. However even if their sole aim is to relax after the Forum, the tourism receipts will be much appreciated. Hosting international conferences is a very serious business. A host of cities around the world including Las Vegas, Vienna, Geneva,...

TradeMake East Africa (TMA) through the Logistics Innovation for Trade (LIFT), a development finance instrument that provides grant finance for innovative business projects proposed by the private sector operating in the transport and logistics sector in East African, has secured $7.6 million for Round 2 funding. In an interview DAVID MITCHELL, LIFT Fund Manager tells Sam Okwakol, how and what one needs to do in order to benefit from the Fund.  QUESTION: Briefly explain, what LIFT is to an ordinary reader? ANSWER: LIFT is a challenge fund that rewards innovation ideas/project in the logistics and transport sector within the East African Community with grant funding. LIFT funds innovative logistics projects (not companies) ideas that provide sustainable solutions with measurable socio-economic impacts. Funds are provided by means of grants, matching applicants funding up to $1 million (LIFT contribution) per project. Why did you choose this approach in implementing LIFT? This is a historic idea which has been used successfully in different parts of the world. We have adopted it to harness the potential and energies of individuals in the private sector to derive solutions that can reduce the logistical and transport challenges facing the region. East Africa has well educated people with good ideas, can do research and most of all care about the development of their countries. Therefore capturing their potential will help us find solutions to reduce transit time and transport cost challenges faced by the logistical and transport sector, while at the same time helping in reducing the...

Cargo transportation through railway from the port of Mombasa is set to increase by 32 per cent from the current three per cent once the Standard Gauge Railway (SGR) is fully operational. The SGR is also set to reduce the cost of transportation to Sh8 ($0.08) from Sh20 ($0.20) a tonne per kilometre (km), significantly bringing down the cost of doing business for stakeholders. The rail is expected to carry 4,000 tonnes per trip once complete. The Mombasa-Nairobi SGR project is set for completion in June 2017, and already 200 km of track has been laid while the remaining part is expected to be complete before the end of the year. Test runs are scheduled for early next year. Speaking during a railway users’ consultative forum, organised by the Shippers Council of East Africa (SCEA) and Kenya Railways Corporation, the Principal Secretary for Transport Mr Wilson Nyakera said that 75 per cent of civil works on phase one of the project are complete. The entire stretch is 472 km. Stakeholders are hopeful that the SGR will provide a reliable alternative for cargo transportation. Currently, they rely on road to move their goods to various destinations from Mombasa. “SGR will significantly reduce transport costs and the time taken to evacuate cargo from the port thereby launching the East African region as a competitive logistics hub,” said SCEA chief executive Gilbert Langat. The second phase of the SGR is expected to start later in the year, where the line will be extended...

The Kenyan manufacturing sector has in recent years been fraught with challenges including subdued product demand in key export markets, high production costs and competition from cheaper producing rivals especially in Asia. The exclusive Export Processing Zones (EPZ) are among the segments that for years suffered a downturn due to a high demand for cheaper second-hand clothes and uncertainty over preferential entry of products into the US market under the Africa Growth and Opportunity Act (Agoa). But a decision by the US Congress in June 2015 to extend the Agoa by another 10 years has triggered fresh enthusiasm in the EPZ business. Though the Act originally covered the eight-year period from October 2000 to September 2008, amendments by then US President George Bush in July 2004 extended it to 2015. Several Kenyan products, notably apparel and agricultural produce, are big beneficiaries of this arrangement which has lifted import duty on all eligible products and granted preferential market access upon compliance with Rules of Origin. Latest statistics in the Economic Survey 2016 showed that the EPZs recorded a 12.1 per cent growth in sales last year underlining a resurgence of the sub-sector that is expected to be a key pillar of Kenya’s development. The EPZs recorded growth in all key fronts including employment and investment-- offering support for the government’s plan to establish a variant of these zones- the Special Economic Zones (SEZ). The growth was mostly driven by apparel exports under the Agoa . “In 2015, enterprises operating under the...

NAIROBI.- The African Union (AU) said on Saturday it has started the process of issuing the continent’s passport. Kenya’s Cabinet Secretary in the Ministry of Foreign Affairs and International Trade Amina Mohamed told a briefing in Nairobi that African Ministers of Foreign Affairs have began filling in the forms for the Africa passport, which will be issued at the AU summit in July. “I have the honour to inform you that in line with the decisions of the AU Summit of Heads of State and Government to facilitate free movement throughout the continent, through the creation of (an) African passport for heads of states and ministers, the issuance process commenced on Friday,” Mohamed said on the sidelines of the Fourth AU Executive Council Retreat. This is the first time the retreat is being held in Kenya as previous ones were hosted by South Africa and Ethiopia. African passport holders should receive a 30-day visa on arrival at all airports in AU member states. Mohamed said that regional economic blocs such as the East African Community have already introduced a regional passport to ease travel within the blocs. “The African passport will build on the success achieved by the trading blocs and help to achieve the dream of free movement of Africans across the continent,” she said. The cabinet ecretary noted that the continental passport will help to speed up the process of establishment of the Africa Economic Community. “It will also boost intra-Africa trade that is below the level of other continents,”...

African countries can boost growth by cutting tariffs and removing "soft" barriers to trade, while still supporting their industries without completely protecting them. Imagine you are a Malaysian truck driver. In the back of your truck is a big cargo of stinking durian fruit. The Singaporean border heaves into view. What will happen? Will you pull over and fill out some paperwork? Wait around to get the documents stamped – hours spent in the sun – with your precious durian rotting in the back? Of course not. Africa needs to realise that its future lies within the continent You whip out your smartphone and send your pre-filled cargo passage form. It is immediately routed through the relevant ministries in Singapore. The authorities e-stamp the form and send it back to your smartphone. Beep. Job done. No need to stop. You don't even need to slow down. Welcome to Singapore. The benefits of frictionless trading with neighbours seem clear. The farmer buys more inputs with the money saved on transporters, and the consumer gets fruit cheaper, allowing him to spend more on other items and boost the economy. The trucker also has more time to carry other loads. Africa is not quite there yet, and border crossings often involve waiting. Of Africa's total trade, just 11% of it is done within Africa, compared to 50% intraregional trade in developing Asia and 70% in Europe. The world economy is going through a period of slower growth, just as tens of millions of young Africans...

The World Bank has assured it will work with the East African Community (EAC) partner states to help the economic community achieve full integration. The World Bank programme Manager for South Sudan, Jean Lubega-Kyazze told Xinhua in Nairobi that the project will begin before the end of 2016 and will take three years to complete. She explained that the project aims at helping the EAC overcome the constraints that have prevented full implementation of the EAC Common Market protocol. “We have identified the constraints that each country needs to overcome in order for the EAC to be fully integrated. Each country is unique and therefore has different constraints,” she added. According to the financial institution, regional integration holds a lot of promise for the partner states. “It will create a seamless market for goods produced in each member state,” Lubega said. The programme manager observed that one of the key constraints to full integration is the lack of integration of regional policies into national policies. “So national policies don’t reflect what has been agreed upon at the EAC level and it is common to find cases where national policies don’t include positions reached upon at the regional level,” she added. EAC Common Market Protocol was signed in 2010 but the trading block is yet to fully liberalize the free movement of goods, services and labour. EAC member states include Kenya, Uganda, Tanzania, Rwanda, South Sudan and Burundi. Source: Africa News

The growth in trade with Uganda resumed in earnest after the conclusion of elections in March according to the bank. “It’s business as usual in Uganda after the conclusion of elections in February and hence Kenya’s manufacturing exports have been robust,” said Jibran Qureishi, regional economist for East Africa at CfC Stanbic Bank. The lender forecast that the completion of the standard gauge railway will further increase the trade with Uganda. The railway line is set to reach Nairobi by mid next year. The railway is planned to be extended to Kisumu and Malaba at the border with Uganda. “As regional infrastructure is bolstered, through developments such as the standard gauge railway, we believe this avenue will continue to show more promise in the coming years,” said the bank. The improvement in trading will come as a relief for businesspeople since Uganda has traditionally been Kenya’s single largest export market. There has also been considerable unease following the government’s failure to clinch an oil pipeline deal to transport Uganda’s oil through Kenya. The deal instead went to Tanzania. The latest Purchasing Managers’ Index (PMI) data released by CfC Stanbic indicates a turnaround in growth of Kenya’s private sector, following a substantial slowdown at the end of the first quarter. The PMI picked up from a five-month low to signal robust improvement in business conditions. “Business conditions improved at a solid pace, helped by sharp expansions in output and new orders. Notably, the rise in total new business was boosted by...

According to the Africa Regional Integration Index Report 2016 which was presented in Nairobi during the African Union Executive Council Retreat, Kenya leads in regional integration within the Common Market for Eastern and Southern Africa (COMESA), East African Community (EAC) and Inter Governmental Authority on Development (IGAD). The report was jointly prepared by the African Union Commission, African Development Bank and the UN Economic Commission for Africa. The report said that Kenya is a top performer on free movement of people within the framework of the EAC Common Market Protocol. The report tracked integration through trade integration, regional infrastructure, productive integration, free movement of people, financial and macro-economic integration. The Index 2016 report covers member countries from the eight Regional Economic Communities (RECs) recognized by the African Union. EAC is the top performing REC on Regional integration overall. The study indicated that in the EAC, Kenya and Uganda are among the top three contributors to wealth creation. They respectively account for 39 percent and 21 percent of regional Gross Domestic Product (GDP). In the IGAD bloc, Ethiopia, Sudan and Kenya are the principal contributors to wealth creation in the region as they account for 29, 28.5 and 27.7 percent of regional GDP respectively. The report further noted that trade links between Africa and the rest of the world is generally more direct and efficient compared to trade between neighboring regions as a result of infrastructure gaps and tariff barriers. Source: Shanghai Daily