Tanzania has firmed up its position as East Africa’s fastest growing economy, boosting its chances of attracting high net worth investments. Tanzania, the region’s second-largest economy after Kenya, grew by 6.9 per cent last year, racing ahead of Rwanda’s 6.5 per cent, Kenya’s 5.6 per cent and Uganda’s 5.2 per cent. Tanzania romped to the high growth trajectory in 2014 when its economy grew by 7.2 per cent, outpacing Rwanda (six per cent), Uganda (5.9 per cent) and Kenya (5.3 per cent). The International Monetary Fund expects Tanzania to maintain the pole position this year with an estimated growth of seven per cent against Kenya’s 5.9 per cent and Uganda’s 5.5 per cent. In spite of strong growth, exports to Tanzania have fallen sharply as frequent trade disputes lock a number of products produced in Kenya from its markets. Data released by Kenya National Bureau of Statistics (KNBS) shows Kenyan firms exported goods worth Sh33.7 billion to Tanzania last year, a 21 per cent drop from the previous year’s Sh42.7 billion. By comparison, Uganda absorbed Kenya’s goods worth Sh68.6 billion, a 12.8 per cent growth over the 2014 export level of Sh60.8 billion. Tanzania and the conflict-prone Burundi are the only markets in the region where Kenya’s exports dropped. Exports to Burundi decreased to Sh6.6 billion last year, 16.5 per cent down from Sh7.9 billion the previous year. During that period, Burundi’s economy also decelerated to -7.2 per cent. The KNBS figures show that Rwanda, which recorded a growth of...

Construction — comprising new buildings, roads and rail – saw a frenetic activity, expanding by 13.6 per cent last year compared to 13.1 per cent in 2014, data from Kenya National Bureau of Statistics (KNBS) shows . The value of compensation of employees in the construction sector also recorded the fastest growth of 46.3 per cent attributable to large scale infrastructural projects. “This growth was to a great extent buoyed by the development of transport infrastructure such as the continued implementation of the first phase of the standard gauge railway, development of the road network, expansion and rehabilitation of facilities at the airports and improvement of port facilities,” reads part of the Economic Survey released Tuesday by KNBS. As at December 2015, 174 kilometres of the Standard Gauge Railway from Mombasa to Nairobi had been constructed at a cost of Sh113.9 billion. The project is estimated to have created 19,000 jobs provided directly by the construction firm China Road and Bridge Corporation and an additional 8,000 through the sub-contractors. Total wages paid by the sector rose to Sh92.1 billion from Sh73.5 billion, underlining its direct impact in local households. The sector also benefited from the implementation of mega energy projects such as Olkaria 1V, Olkaria 1 and wellhead geothermal projects. Real estate developments also contributed to the improved performance of the sector as private investors pushed to take advantage of the housing deficit in the country. The index of reported private building works completed in major towns rose to 367.1...

Across the African continent second-hand clothes from developed countries are a mainstay of many informal traders, dominating local market stalls. East Africa alone imported $151m of second-hand clothing last year, most of which was collected by charities and recyclers in Europe and North America. In February, however, the East African Community (EAC), an intergovernmental organisation, proposed a ban on imported used clothes and shoes. The aim is to encourage local production and development within member countries: Burundi, Kenya, Rwanda, Tanzania and Uganda. In the 1970s, east Africa’s clothing manufacturing sector employed hundreds of thousands of people, but when the debt crisis hit local economies in the 1980s and 1990s, local manufacturing struggled to compete with international competition and factories were forced to close. Today, the small sector remaining is geared towards production for exports. Many orthodox economists disagree with banning imports because it goes against the principles of free trade. Rather than having the freedom to choose imported used clothing, east African consumers will have to buy higher priced local goods or new clothes imported from Asia. Increasing the cost of clothing will hit east Africa’s many low-income consumers, but the shock effect could be reduced if a ban was imposed gradually. If a tax on used clothing imports was introduced before an outright ban, this could subsidise local production and increase local manufacturing capacity. A revitalised local market would ultimately boost the EAC’s economy by providing more jobs than the second-hand sector while retaining money that currently goes to...

Cape Town — International Relations and Cooperation Minister Maite Nkoana Mashabane says South Africa is aiming to boost trade with African states by half a trillion rand before the end of the current administration. The Minister said this when she briefed the media ahead of delivering the department's Budget Vote at the Old Assembly Chamber, in Parliament, on Tuesday. "We are targeting half a trillion trade with Africa by 2019." The Minister said the increase in trade and investment relations in both the African continent and the Asia and Middle East markets was linked to the growth of South Africa's diplomatic missions in those areas. She said the same applied to SA's traditional trade partners like the Americas and Europe. "With additional economic diplomacy efforts and enhanced national coordination, South African trade with the world can reach R2 trillion by the end of this administration. "Without a doubt, an unprecedented trade expansion," she said. She said SA's diplomatic presence in the continent has brought tangible benefits in the form of economic growth and job creation. The Minister said the work of the department has increased the country's presence on the continent from seven diplomatic missions in 1994 to 47 in 2015. "Consequently, South Africa's trade in the continent increased 39 times from R11.4 billion in 1994 to R385 billion in 2015. "In 1994, trade with Asia and the Middle East combined was approximately R760 billion for Asia and R116 billion with Middle East," the Minister said. SA signs eight MoUs...

South Sudan may not be  keen on an oil pipeline deal with Kenya despite frantic effort from its neighbor to seal an agreement with the Africa’s youngest nation that would see the two nation construct a multi-billion dollar pipeline to the Lamu port. According to The East Africa, the Juba-based government is still awaiting the outcome of talks with Sudan over transfer costs before it makes any decision. Last week, AFKInsider reported that East Africa’s largest economy was in a race against time to win the full backing of the Africa’s newest nation for its planned $2.5 billion crude pipeline after Uganda pulled a plug on an earlier deal for a joint petroleum project with Nairobi. South Sudan’s Trade Minister, Stephen Dau, told the East African that he was aware of Kenya’s plans for the northern corridor pipeline, but he had not received any official communication over the issue from Kenya. “Once we have a proposal, our technical teams will meet and advise on the right way forward,” Dau said, adding that South Sudan was part of the initial talks to partner in construction of the Kenyan line but left “once alternative options came up”. It is expected that Sudan will cut transit fee for South Sudan’s oil to $18 per barrel, from the previous $24 per barrel, due to the fall in crude prices on the international market. Uganda, which has almost ten-folds more oil reserves than Kenya, opted out of a deal to construct the pipeline to the Lamu...

The government has today (Tuesday) announced plans to construct a world class cruise ship terminal at the port of Mombasa. Speaking at the port of Mombasa after a closed door meeting with Kenya Ports Authority (KPA) and Trade Mark East Africa management officials on Tuesday, Tourism Cabinet Secretary Najib Balala said that the process that is estimated to cost Ksh200m is expected to kick off in October 2016 and be completed by 2017. Balala also noted that the new terminal which is expected to meet international standards will help the government attract more cruise ships at the port of Mombasa as well as double the number of tourists coming into the country. The CS added that this came after the Kenya port Authority KPA and Trade Mark East Africa management officials signed a partnership agreement to donate Ksh100 million each towards realisation of the project. The CS further indicated that over 11,000 cruise ships docked at the port of Mombasa between December last year and March 2016, further expressing optimism that the country has more opportunities to increase the number before the end of the year. The port Mombasa lacks a cruise terminal for welcoming visitors or a resting area for those connecting to other destinations. Source: Citizen Digital

Importers, exporters and clearing agents are optimistic that the new cargo handling procedures at Port of Mombasa will reduce the cost of doing business, and enhance cross border trade. The Kenya Ports Authority (KPA) last week issued new container handling rules for importers and exporters. The new procedures, according to Andrew Opiyo, KPA’s senior documentation officer, are designed to improve efficiency and to boost competitiveness. According to the new procedures, inspection of imports will be done once in the first country of entry. All shippers, agents and shipping lines are therefore required to comply with the new procedures. Opiyo who was speaking during a sensitisation workshop on the new SOLAS, customs and shipping declarations and process organised by KPA in Kigali last week advised traders to embrace cargo consolidation to further ease the process of clearing and efficiency. The Kenya Ports Authority entered into an agreement with private CFS’s in 2011 to help decongest the port, where CFS operators are required to clear cargo within 48 hours after being discharged from a vessel. Last year, the authority banned private CFSs and shades from operating within the port’s premises, forcing them to invest outside. Single customs territory processes streamlined According to the single customs territory processes, the shipping line and agents will now lodge the sea manifest 48 hours before estimated time of arrival of the vessel for long hauls and for short hauls it will be six hours before to the Kenya Revenue Authority Manifest Management System (MMS) which is...

Number of harmonized East Africa Standards has increased contributing to a reduction in time and cost of conformity assessment at the borders, thus helping to spur regional trade. Kampala, Uganda -  April 29th, 2016: A recently conducted independent evaluation of the Standards Harmonisation and Conformity programme in East Africa indicate that there is a 59 per cent reduction (from $500 to $205) in testing cost  and 74 per cent reduction (from 38 days to 10 days) in average testing time achieved across the East Africa Community (EAC) region. The results also indicate that the number of products complying with quality and standards requirements has increased through certification thus contributing to increased intra and Extra EAC trade values and volume by 23% and 50% respectively (from $ 857,997 in 2010 to $ 2,094,748 in 2014). TradeMark Africa (TMA) has invested US$ 11.6 million between 2011 to 2014 in the Standards Harmonization and Conformity Testing Programme. The broad aim was to support the National Standards Bureaux (NSBs) in achieving regional harmonization of standards and improving their testing capacities with the aim of improving trade competitiveness in East Africa by reducing the time and cost of testing in the region. This is expected to ultimately contribute to increased regional trade. Further results indicate 79 East Africa Standards (EAS) were harmonized and gazetted with support from the programme. This has greatly reduced the testing cost and the clearance time of products because goods with these marks are no longer required to comply with multiple...

Liberat Mfumukeko last week took over the post of EAC Secretary-General with three things at the top of his agenda: A viable financing mechanism for the expanding East African Community; full implementation of all signed protocols, and inclusion of South Sudan in EAC activities. Mr Mfumukeko, who succeeded Richard Sezibera on April 26, faces an $11 million deficit at the Secretariat, and his first assignment will be to ensure that the EAC restores confidence to donors and the partner states on the issue of financial management. In his acceptance speech, Mr Mfumukeko, who was in charge of finance and administration for a year at the Secretariat, conceded that the EAC was going through challenging financial times and that forecasts for the month of June show a deficit of more than $11 million. The situation has been aggravated by the fact that development partners, who account for close to 70 per cent of annual budget, are dragging their feet in disbursing funds to the Secretariat, due to allegations of financial malpractice. Sweden, Belgium, Canada, Denmark, Finland, France, Germany, Japan, Norway and the United Kingdom contribute to EAC Partnership Fund. Others are the European Commission and the World Bank. Mr Mfumukeko as the new head of EAC Secretariat, an executive arm of the six partner states with 150 million plus people, is mandated to, among other things, develop strategies, spearhead negotiations with the donors and the government, local and international communities. “I know work on sustainable financing of the EAC is advanced, but...

Speakers from the East African Community (EAC) are optimistic that a new body on legislative matters, the East African Parliamentary Institute (EAPI), will help bolster capacity of lawmakers from around the bloc. The creation of EAPI was announced at the closure of the EAC Bureau of Speakers’ 11th meeting last Friday in Arusha, Tanzania. Operationalisation of the EAPI was high on agenda as the Speaker of the East African Legislative Assembly (EALA) Daniel Kidega took over the chair from Tanzanian Speaker Job Ndugai. The EAC Speakers’ Bureau is the umbrella body under which EALA and national assemblies of partner states champion the cause of parliaments in the region: legislation, oversight and representation. It also plays an advisory role to the Summit of the EAC Heads of State. At the meeting, Rwandan Parliament was represented by deputy Speaker, Jeanne d’Arc Uwimaninpaye, while second deputy Speaker of the Burundi National Assembly, Edouard Nduwimana, represented his country. Both the Speaker and president of the Kenya’s National Assembly and Senate, Justin Muturi and Ekwee Ethuro, respectively, and the president of the Burundi Senate, Reverien Ndikuriyo, were also in attendance. According to a communiqué from EALA, the operationalisation of the East African Parliamentary Institute is expected in the next Financial Year once the EAPI Act, 2011, has been gazetted by the EAC Council of Ministers. The one day EAC Bureau of Speakers meeting considered a number of key areas deemed important to the realization of EAC integration. National legislatures and EALA are to commence on...