Africa’s textile industry may be caught in the crosshairs of US president Donald Trump’s global trade war. In reaction to Rwanda raising tariffs on used clothing and footwear from the US, the Trump administration says it will suspend duty-free privileges on eligible Rwandan clothing—a benefit of the African Growth and Opportunity Act (AGOA)— within 60 days. US Trade Representative’s office says a suspension rather than a termination of the benefits will “allow for continued engagement with the aim of restoring market access.” Other East African countries, including Tanzania and Uganda, have been spared a similar fate as, according to the trade office, both countries have “committed not to phase in a ban” for second-hand products. Last year, Kenya also backtracked on the 2016 decision from the East Africa community nations to ban used clothing by 2019. The move is an extension of Trump’s “America First” stance seen in the ongoing tariff battle between the US and China. But the Trump administration is being lobbied by the Secondary Materials and Recycled Textiles Association, which says a ban will lead to the loss of 40,000 US jobs and negatively impact the environment with pounds of textile waste ending up in landfills. For its part, Rwanda says the withdrawal of its AGOA benefits are “at the discretion of the United States” and has given no indication of reversing the tariff hike on used clothes from the US. The looming threat of a withdrawal of AGOA benefits is fueling pending conversations about the second-hand...

Kenya has blamed the delay in starting work on a key road linking the port of Mombasa to Tanga on change in design from single to dual carriage along a section of the transnational highway. The African Development Bank (AfDB), the principal financier of the 445-kilometre project, said last week Nairobi was slow in completing preliminary studies such as road designs to pave the way for construction. The road running from Malindi to Bagamoyo — formerly a key trading port in north-eastern Tanzania during colonial times – will cost an estimated $751.3 million (Sh75.93 billion). AfDB will fund about 70 per cent of the project, with the two countries covering 30 per cent of the total cost in their respective territories. Work on the mega project that is expected to take 36 months has been delayed since 2016. It was expected to start this year, but may be delayed further to next year. The connection of Mombasa to Tanga – Tanzania’s second largest port – is expected to unlock trade, tourism and shipping opportunities between the two countries, which have over the years had on-and-off trade disputes. Transport and Infrastructure secretary James Macharia said the new designs will ensure the stretch from Mtwapa to Nyali in Mombasa, including the Mtwapa Bridge, is expanded into a dual and not a single carriage as in the previous designs. “We had to change the designs to make sure we do not have a bottleneck at Nyali-Mtwapa area because the traffic there is a...

Twenty years ago, I hoped for an Africa that would draw closer and forge forward boldly, despite a bag of mixed fortunes. Rwanda had just been blighted by genocide; the ubiquitous coup d’état still reared its ugly head in West Africa; although a tentative calm prevailed in Central Africa, political tensions simmered below the surface; Zaïre was in the throes of the ‘first Congo war’; the civil war in Somalia grew in magnitude and intensity; Ethiopia began an experiment in state-led macroeconomic planning; a democratic South Africa rose from the ashes of Apartheid, a veritable validation of the OAU’s ultimate goal of political liberation for Africa. An interim period of positive change ensued, a growth fuelled by new media including the Internet, greater multiculturalism and a stronger attachment to democratic principles. In March 2018, 44 of the 55 African Union Heads of State and Government enacted the African Continental Free Trade Area agreement (CFTA) in Kigali, Rwanda at its 10th Extraordinary Session, under the able leadership of H.E. President Mahamadou Issoufou of Niger, with H.E. President Paul Kagame of Rwanda as current AU Chairperson and H.E. Moussa Faki Mahamat, Chairperson of the AU Commission. Once in force CFTA will be the largest trade zone in the world, increase intra-African trade by 52% by the year 2022, remove tariffs on 90% of goods, liberalise services and tackle other barriers to intra-African trade, such as long delays at border posts. The end of colonialism in the early 1960s created 55 African countries...

Kenya will not raise its value added tax (VAT) to match the uniform rate for the rest of the countries in the East African Community (EAC), the Treasury has said, offering relief to households and businesses. Treasury Principal Secretary Kamau Thugge on Tuesday said Kenya’s VAT on consumer goods would remain at 16 per cent despite calls to align the rate with the rest of the trading bloc’s members such as Tanzania and Uganda, which charge 18 per cent. There has been growing concern that different rates at which member countries levy domestic taxes is distorting the EAC common market. The Treasury’s decision to retain the current VAT rate has spared consumers an increase in the cost of commodities such as electricity, milk, newspapers, textbooks, fertilisers, alcohol, cigarettes, mobile phone handsets and airtime. Global institutions, including the Washington-based Institute of International Finance (IIF) had tipped the Treasury to raise VAT to 18 per cent as a way of boosting revenues and arrest fiscal deficits that have seen the State take on huge loans. Narrowing deficits The institute reckons that the increase would be in line with the Treasury’s quest to honour its commitment to the International Monetary Fund (IMF) in narrowing deficits. Kenya pledged to slash budget deficits through spending cutbacks and raise tax receipts in exchange for a six-month extension of a Sh150 billion ($1.5 billion) stand-by credit facility from the IMF that was due to expire last month. “Improving the VAT’s collection to five per cent of GDP...

NAIROBI, April 4 (Xinhua) -- East Africa's bloc on Wednesday lauded Kenya for being one of the first countries to approve the framework establishing the African Continental Free Trade Area (AfCFTA) which will create a single market for goods and services in the continent. The Inter-Governmental Authority on Development (IGAD) said the quick approval of the bill to ratify the AfCFTA demonstrates the strong political will of the Kenyan government to strengthen inter-African linkages on trade through the elimination of trade barriers to foster a liberalized single continental market. "The IGAD Secretariat also welcomes the signature of the African Continental Free Trade Area by all Member States of IGAD - Djibouti, Ethiopia, Somalia, South Sudan, Sudan and Uganda - and will endeavor together with the African Union to work alongside its Members States to facilitate efforts to enhance free trade within its respective region and across the continent," the bloc said in a statement. All the East African countries except Burundi which did not attend the Summit on March 21 in Rwanda signed all the three protocols. Only 22 member countries were required to sign the agreement to make the AfCFTA treaty operational. According to the Africa Union, AfCFTA aims to establish a single liberalized market that will spur industrialization, infrastructural development, economic diversification and trade across the continent that is home to some 1.2 billion people. IGAD said the trade pact which requires ratification by 22 countries before entering into force seeks to increase intra-African trade by 52 percent,...

The African Union recently announced the creation of a Continental Free Trade Area in Kigali, in what has been termed a historic event. The heads of 44 African nations signed the bill establishing the Free Trade Area, immediately fast-tracking Africa’s economy by 50 years. However, there is still some more work to be done for the African trade area to be ‘modern’. Other than the fact that intra-African trade is the lowest among its ilk in the world at 11 percent (which was a reason for the creation of the Free Trade Area),  the Continental Free trade area also needs to be digitized. In a world of high-speed internet, emerging technologies and economies, digital networks and data flows, and the traditional boundaries regarding trade will no longer suffice. Ventures Africa spoke to Microsoft’s Director for Corporate Affairs in Africa Mr. Louis Otieno last week on the sidelines of the Africa CEO Forum in Abidjan, Ivory Coast. He says Africa needs to digitize its Free Trade Area to enable it to incorporate at scale. “Digital data flows is what defines the economic area as opposed to traditional boundaries,” he said. “For Africa to complete globally with the likes of China, we have to incorporate at scale. We have a billion people, which makes us a viable market today, with the youngest billion people, which makes us a viable market tomorrow.” His solution to digitizing the CFTA is for African governments to initiate policies that would make it easier for data flows...

Sugar imports in January dropped 72 per cent from last year as the regulator moved to control quantities allowed into the country. A market report by the Sugar Directorate indicates the volume of sugar imported dropped to 9,907 tonnes in the period under review from 35,170 in a similar period last year. The consignment comprised 1,900 tonnes of refined sugar while the bulk of cargo was 8,007 tonnes of industrial sugar. “Total sugar imports in February 2018 were 9,907 tonnes compared with 35,170 tonnes imported in the same period last year, a decrease of 72 per cent,” says the Sugar Directorate in a report. Last week, the directorate said it had subsequently cut the volumes of the sweetener imported to an average of 7,000 tonnes a month from previous highs of 29,000 tonnes to protect local millers who are grappling with huge volumes. “We are regulating the imports to ensure that the volumes we license in a month are manageable so that we do not affect the local millers,” said Solomon Odera, head of the Directorate. Normally, Kenya is allowed to import 350,000 tonnes annually from the Common Market for Eastern and Southern Africa (Comesa), which is spread across the year to about 30,000 tonnes monthly. The country imported over 900,000 tonnes of sugar between May and December last year as Kenya opened a duty-free window to allow traders to ship in the commodity outside Comesa. The directorate says the number of traders seeking import permit has gone down in...

Water transport investors in Lake Victoria are banking on the planned construction of the Standard Gauge Railway line to Kisumu to grow. Mbita Ferry Ltd, the biggest investor in lake transport vessels in the region, is focusing on handling cargo and increasing its presence in passenger transport. The company, which began its operations in 2001, has 11 vessels operating in Kenyan waters and two vessels in Tanzania. The ferry in Kenyan waters plies routes such as Mbita Town in Homa Bay County to Luanda Kotieno in Siaya County, and other islands around Mfangano main Island. Those operating in Tanzania named MV Alestus and MV Tilapiia ply between Mwanza and Bukoba ports respectively. Mbita Ferry Managing Director James Orege said the company has been specialising in handling cargo and passengers but is eyeing heavy cargo. “We are currently strategising on how to increase our cargo handling capacity following the move by the government to extend the Standard Gauge Railway to Kisumu,” said Mr Orege. The MV Mbitta that plies the Mbita Town to Lwanda Kotieno route in Siaya County can carry up to 500 tonnes.  It charges adults Sh150 and children Sh50 to cross from the Mbita to Luanda Kotieno. The ferry can carry up to 20 motor vehicles.  A car is charged Sh930 while a lorry is charged Sh2,320. The manager said motorists who do not want to be inconvenienced by road traffic often resort to the ferry to reach their destination. “Most of our customers crossing the lake with their motor vehicles do so because it is cost-effective and save...

The cost of transporting empty containers back to designated shipping lines yards in Mombasa is watering down the gains for importers using the Standard Gauge Railway (SGR) subsidised freight rates. Currently, there are more than 400 empty containers lying at the Nairobi Inland Container Depot (ICD) awaiting transportation to yards in Mombasa, with importers bearing the costs, according to clearing and forwarding agents. The containers were railed to the ICD without being nominated to the facility. As a rule, importers have to declare in the import documents where they want their cargo to be offloaded. The The Kenya Ports Authority (KPA) General Manager, Operations and Harbour Master, William Ruto on Tuesday said the number of 20-foot containers were 289 while the 40-foot ones were 141. He however said the initial confusion that arose after goods were railed to the ICD were being addressed and the yard had been reorganised. “We have already deployed 10 people to assist in the organisation of the yard and clearing agents are now able to locate their containers,” Mr Ruto said, adding that they expected the equipment to be transported to Mombasa by Tuesday. Return of the empty containers is being complicated by the fact that the SGR trains are not able to transport the goods to the final destination, forcing the importers to use road transport for the last mile transport. However, the Kenya Railways (KR) has negotiated with shipping lines on the return of the containers to Mombasa, although the logistics have not...

Kenya Airways is staring at a possible loss of its regional market share following the planned revival of national carriers in Uganda, Tanzania and Zambia. Kenya Airways, popularly known by the code KQ, has been enjoying a big presence in these countries capitalising on lack of national airlines. Air Tanzania is welcoming a new aircraft- Bombardier Q-400, which is the third since President John Magufuli rose to power, in an effort to revive the ailing airline. The airline has also lined up three more jet aircraft, including two Bombardier C300s and one Boeing 787-8 Dreamliner to arrive in the country before the end of this year. Uganda is also in the process of reviving its national airline before the end of the year after the cabinet approved the plan. This will cut the 15 years dominance that KQ has been enjoying at Entebbe which might result in revenue loss as Uganda seeks to claw back regional routes to kick-start an ambitious global outreach. Kenya’s Transport Principal Secretary Paul Maringa, however, says the move will not affect KQ’s earnings as part of the efforts to revive the local airline are aimed at making it competitive in the regional market. “There will be increased competition obviously, but this does not mean it will affect the operations of KQ. We are banking our strength on the services that we offer, which will keep us going even in the presence of stiff competition,” said the PS. Prof Maringa said there is nothing wrong with...