Kenya has moved to seal loopholes in tax evasion and importation of substandard goods by directing that all consolidated cargo be inspected at the port of origin. In a joint statement Kenya Revenue Authority (KRA) and Kenya Bureau of Standards (Kebs) said this would help establish the real value of individual cargo to be verified by Kebs-licensed inspection agencies who will then submit a copy of a product’s Certificate of Inspection (CoI) via their online portals to KRA’s Simba system ahead of shipping. The notice issued last week, also directed clearance and forwarding firms involved in consolidation of cargo into single units for packing in containers to register with Kebs by April 20. “Consolidated cargo will only be managed by registered consolidators who will liase with Kebs-licensed cargo inspectors across the world to have goods audited at the port of origin before packing into containers. “No other inspection will be conducted upon arrival but handling of clearance via our online single window,” said Kebs Managing Director Charles Ongwae. Prior to the directive only single importer goods placed in a container were inspected at source under regulations that established three types of clearance schedules — Route A, B and C — where inspecting firms issued importers with a Pre-Export Verification of Conformity (PVoC). But Kebs-KRA directive on consolidated cargo will see a Certificate of Inspection(CoI) issued confirming that all goods are checked to confirm they are of high quality and conform to health, safety and environmental standards before they are packed...

China’s massive build programme to recreate trade routes stretching from Asia to Africa and Europe is gaining momentum. Since President Xi Jinping’s flagship Belt and Road project was announced about five years ago, it gave impetus to billions of dollars of Chinese investment — some of which were already in the pipeline for several years — to build railways, roads, ports and power plants. The programme isn’t without controversy: debt risk is rising, an influx of Chinese workers has fueled tension with locals, and there are worries about China’s dominance in the region. And not all of the projects have succeeded. “It’s been a mixed bag so far,” said Mr Michael Kugelman, a senior associate for South Asia at the Woodrow Wilson Center in Washington. “There have certainly been success stories, and there will be more of them too, but there have also been setbacks.” With many projects in various stages of developments, measuring the success and potential benefits can be tricky. Here’s a list of projects that analysts who track China’s Belt and Road investments say will provide the most economic impact to countries by unlocking trade routes: MYANMAR’S KYAUKPYU PIPELINE The US$1.5 billion (S$1.97 billion) oil pipeline that runs from Kyaukpyu to Kunming began operations last year, allowing crude supplies from the Middle East and Africa to reach China faster as shipments no longer need to be transported through the Straits of Malacca and the South China Sea. The pipeline is designed to carry 22 million tons of...

Kenya plans to start transporting crude oil from Turkana to the Port of Mombasa next month for export. Petroleum Secretary John Munyes says the government has already addressed security and logistical challenges that marred the first attempt last July to start exports under the Early Oil Pilot Scheme. Munyes has further said the construction of a crude oil pipeline from Lokichar to Lamu will start in the fourth quarter of this year. Last year, Kenya was hoping to join the league of crude oil exporters in the world, by trucking crude oil from Lokichar basin in Turkana to the Port of Mombasa for shipment to the international market. However, the plans jointly by the government and Tullow Oil flopped due to poor road network, security concerns and lack of a law on revenue sharing. Kenya plans to transport by road between 2,000 to 4,000 liters of the crude oil to the Changamwe storage facilities. CS Munyes has said the early oil pilot scheme will start in the next one month. Tullow Oil already has 70,000 barrels of crude stored in Lokichar in readiness for transportation to the Port of Mombasa by specialized lorries and has decried the delays in kick-starting the export programme. Early oil exports would be followed by commercial production and exports after the pipeline is completed in the year 2021. Munyes has also said the government will soon invite tenders for the exploration of crude oil and natural gas in Samburu County. French oil giant total SA...

Forty-four African leaders gathered in Kigali last month and signed a continental free-trade agreement (FTA). By so doing, they laid the foundation stone for the creation of an enormous free-trade area that will likely facilitate regional integration and inspire economic growth across the continent. Although I support this leap of faith, I am not too sure that the negotiations leading up to this treaty have exhausted all points of friction. Implementing the treaty will certainly require some nurturing of relationships and massive support from citizens of every African country. This is so because the FTA is a product of pronouncements from top leadership without details that matter in such agreements. This process first started in October 2008, when the East African Community (EAC), Southern African Development Community, and the Common Market for Eastern and Southern Africa (Comesa) held a summit that birthed the African Free Trade Zone (AFTZ). In 2012, it was extended to the Economic Community of West African States (Ecowas), the Economic Community of Central African States (ECCAS) and the Arab Maghreb Union (AMU). MASSIVE MARKET In June 2015, at the African Union summit in South Africa, negotiations started to create a Continental Free Trade Area (CFTA) with all 55 African Union states by 2017. A continental free-trade policy means there will be no restrictions on imports from, or exports to, any African country except for South Africa or Nigeria unless they accede at some point in the future. Nevertheless, even without these two giant states, FTA members...

The EAC Monetary Institute Bill, 2017 and the EAC Statistics Bureau Bill, 2017, are two key pieces of draft legislations on agenda as the East Africa Legislative Assembly (EALA) moves its sitting to Dodoma, Tanzania starting today, Monday. The regional House’s first ever sitting in Tanzania’s designate capital – which starts today Monday and ends on April 28 – is to be presided over by Speaker, Martin Ngoga, with Tanzanian President Dr John Pombe Joseph Magufuli expected to address the Assembly at a special sitting sometime next week. The two pieces of legislation are critical in the eventual set up of the East African Monetary Union (EAMU), the East African Community’s third pillar of integration preceding the ultimate phase – the EAC Political Federation. Partner States negotiated a Protocol for establishment of the EAMU which was signed by regional leaders in November 2013. The EAMU protocol provides for the establishment of four support institutions: the East African Monetary Institute – a precursor to the East African Central Bank – which was supposed to be set up by December 2015 but never happened, and the East African Statistics Bureau (2018), among others. In March, when MP Dr Pierre Celestin Rwigema (Rwanda) asked the Council of Ministers to inform the House about the status of implementation of the third and fourth pillars of the integration during the last sitting in Arusha, Tanzania, Dr Ali Kirunda Kivejinja, Chairperson of the Council of Ministers, said the EAC Secretariat – the executive organ of the...

Some 73 companies are on track for expedited payment of refunds and reduced customs security checks after they enrolled in an East African Community (EAC) programme to promote regulatory compliance, enhance trade and improve border security. The firms will reap other benefits of the programme, named Authorised Economic Operators (AEO), including automatic passing of their declarations and will undergo no physical examination of goods except where risks are high, among others. The incentives apply to multinationals as well as small and medium enterprises (SMEs) that have joined the programme. 73 companies Among private sector organisations to benefit from the AEO programme are Mitchel Cotts Freight, Mzuri Sweets Ltd and Umoja Rubber. "Seventy three companies have so far been enrolled in the programme since it was introduced over three years ago. The EAC targets to enrol over 500 companies in the next five years," said Duncan Karari, Communications Manager at German international development organisation GIZ which provides technical support for the initiative. GIZ is also supporting the EAC integration process and its development goals.Mr Karari said the programme is headed for roll-out. Regional customs The AEO initiative -- launched to reform regional customs services -- targets more than 500 companies, indicating that over 400 more are expected to join in due course. Under the scheme, firms involved in international trade are scrutinised and certified as AEO. The programme is open to all players including clearing agents, revenue authorities and standards bodies. The programme is expected to reduce the cost of doing...

African development hinges on a maddening paradox: its greatest asset—the sheer size and diversity of its landscape—is also the greatest barrier to its development. Landlocked countries are cut off from ports, and the difficulty of moving goods from country to country weighs down intra-continental trade (only 15% of African trade is within Africa. (African Development Bank, 2017) African consumers bear the brunt of these difficulties. [1]. Costs are driven up by a host of factors: tariffs, border delays, corruption. But the biggest challenge is that no streamlined transport route exists between West and East Africa – only a decaying and underdeveloped road and rail system which pushes up costs and drags down efficiency. Several ambitious schemes have been proposed to link Africa’s east and west coasts, some of which are closer to full realization than others. Most notable in this respect is a plan to expand the existing Trans-African Highway 5 (TAH5) into a true cross-continental road and rail link, the early stages of which China has helped bring to fruition where Western consortiums failed. Likewise, Chinese investment in African infrastructure through Beijing’s ambitious Belt and Road Initiative (BRI) may help create expanded sub-regional linkages, particularly in East Africa, that could help facilitate the emergence of an eventual, true East-West link in the long term. However, in the short-to-mid-term, the obstacles to a truly robust set of East-West transport links are formidable, and it is unlikely that China’s involvement will be a panacea. Long March to the Red Sea Portions...

MOMBASA, KENYA; Kenya Revenue Authority (KRA) and Kenya Ports Authority (KPA) are engaged in a blame game over the theft of 124 containers at the Mombasa port in 2016. So far, 31 employees from the two State organisations have been charged with causing colossal losses to the exchequer by allowing the containers to leave the port without paying taxes. Early last week, State witnesses testified that retired employees' user accounts and passwords from the information and security departments at KPA were hijacked and used to release cargo without paying duty. Apparently, these accounts remained active even after the employees left the organisation. On Friday, a KRA investigation officer admitted that there could have been collusion between KRA and KPA in the theft of containers that cost the Government more than Sh106 million in unpaid customs duty. Dunstun Majanja, who doubles up as a lawyer for KRA, told Senior Resident Magistrate Francis Kyambia that there was a compromise in the KPA Simba System but could not identify who was responsible. “I can only speculate that there was a compromise at KPA and KRA,” said Mr Majanja, adding that he did not follow up how it happened. During cross-examination by defence lawyers William Mogaka, Michael Oloo, Jared Magolo, Kevin Amani, Boaz Adalla and a Mr Gitonga, Majanja admitted that KRA and KPA often shared information of containers planned for clearance from the port. Manually intervened “There was a compromise in the KPA Simba System because someone had manually intervened by inputting the...

Some 73 companies are on track for expedited payment of refunds and reduced customs security checks after they enrolled in an East African Community (EAC) programme to promote regulatory compliance, enhance trade and improve border security. The firms will reap other benefits of the programme, named Authorised Economic Operators (AEO), including automatic passing of their declarations and will undergo no physical examination of goods except where risks are high, among others. The incentives apply to multinationals as well as small and medium enterprises (SMEs) that have joined the programme. 73 companies Among private sector organisations to benefit from the AEO programme are Mitchel Cotts Freight, Mzuri Sweets Ltd and Umoja Rubber. “Seventy three companies have so far been enrolled in the programme since it was introduced over three years ago. The EAC targets to enrol over 500 companies in the next five years,” said Duncan Karari, Communications Manager at German international development organisation GIZ which provides technical support for the initiative. GIZ is also supporting the EAC integration process and its development goals. Mr Karari said the programme is headed for roll-out. Regional customs The AEO initiative — launched to reform regional customs services — targets more than 500 companies, indicating that over 400 more are expected to join in due course. Under the scheme, firms involved in international trade are scrutinised and certified as AEO. The programme is open to all players including clearing agents, revenue authorities and standards bodies. The programme is expected to reduce the cost of doing...

Lusaka – Calls for regional integration and boosting of economic growth in Africa will remain unanswered unless all countries strive to fulfil agreements to the letter unlike piece-meal legislation, a leading economist has noted.  In recent years, several African economic blocs – the Common Market for Eastern and Southern Africa (Comesa), East African Community (EAC) and Southern African Development Community (SADC) ‑ have signed and adopted various agreements relating to trade but a few, or none, have been ratified and operationalised. Key among the trade agreements that have been signed and not ratified are the Comesa Free Trade Area (FTA) and the recently signed Continental Free Trade Area (CFTA) in which 44 African countries signed various agreements during the just-ended AU Summit in Rwanda but remain to be ratified. Sindiso Ngwenya, the Comesa Secretary-General, noted that while there has been a zeal to append signatures on various trade treaties, the majority of agreements still remain on the shelves, unratified to make them fully operational and bolster intra-trade growth in the 54 member states. In an interview with The Southern Times in Lusaka, Ngwenya, the outgoing chief administrator of 25-year-old Comesa, noted that while there has been increasing zeal for countries in various groupings to sign agreements and necessitate their operationalisation, many have remained on the drawing board, incomplete because they are not ratified to the letter. Twenty-two countries out of 26 signed the COMESA-EAC-SADC Tripartite Free Trade Area (TFTA) Agreement, Botswana being the latest signatory to the agreement, after signing...