Newly appointed Permanent Secretary Chris Kiptoo says he will deliver a trade policy to address the imbalance in Kenya exports against imports. Mr Kiptoo said he will come up with a new set of rules on taxes, subsidies, import and exports in the next four months to boost Kenyan trade. The huge difference between what the country exports to what it imports has narrowed significantly last year over the drop in oil prices. According to the National Treasury, the current account deficit went down from 10.7 per cent in November 2014 to 7.2 per cent. “Our current account has been huge because we have not been doing well in exports, we need to fix that,” Mr Kiptoo said. The former TradeMark Africa (TMA) Kenya Country Director said he will also spearhead the development of an export strategy to boost Kenya’s capacity to produce for the global market. Exports services Kenya largely exports services in the financial and tourism sector which suffered last year in the wake of several attacks by the Somali militants Al Shabab. Kenya will find itself in a tight spot having signed free trade area deals that prohibit protectionism to keep away imports and offering subsidies to boost exports. The country has up to the first quarter of 2017 to open its markets to sugar imports from the Common Market for Eastern and Southern Africa (COMESA). Last year the World Trade Organisation (WTO), of which Kenya is party to, agreed to eliminate agricultural export subsidies. Kenya which...

Last December, amid two days of fanfare, a new long-haul 787 passenger route was launched from Durban, South Africa. The four-times-per-week service was hailed by local provincial officials as a triumph for the region and would begin “opening up new markets for our goods around the world,” as well as delivering tourists and tourist money, to the continent. And which carrier is now facilitating this foreign trade boom? Qatar Airways, based not in Africa, but in the Middle Eastern city of Doha. It says much about the state of the African airfreight industry that a new Doha-Durban route, with ample bellyfreight capacity, is owned by a foreign carrier – especially one from the Middle East. Qatar now has 21 flights a week to South Africa from its Doha hub. Nowthat’s an open market. For most of the last decade, the surge in cargo traffic that has made Africa one of the world’s fastest-growing airfreight markets has been dominated by carriers based in the Gulf Region, China and Europe. One of the few exceptions is Ethiopian Airlines, a rare African carrier that has a substantial cargo division modeled on the global airfreight networks of its foreign rivals. “Foreign carriers account for 85 percent of the traffic moved to and from the continent and have far significant advantages compared to African carriers,” said Sanjeev Gadhia, CEO of Kenyan all-cargo carrier Astral Aviation. The reason, Gadhia said, is a lack of liberalization in the aviation policies of most African nations. While foreign-operated international...

Nigerian President Muhammadu Buhari’s first state visit to Kenya last week sparked the interest Africa’s business community Speculation was rife as to what the outcome of trade and political talks with his Kenyan counterpart Uhuru Kenyatta would be. This is the fourth time in under three years that presidents of the two countries have held bilateral talks, whose ideal goal is the integration of the East and West African trading blocs. The plan would create a 450 million-strong consumer base expected to propel the two countries to new economic heights. The political and economic weight Kenya and Nigeria hold in their respective regions further means that the benefits of a free-trade zone between the two would go a long way toward boosting intra-African trade, which has consistently been dismally low. According to the 2014 edition of the Africa Integration Index, conducted by payments company Visa, trade across the three sub-Saharan Africa clusters (South, West and East) — both between themselves and with the rest of the world — is very low. This has hindered the continent’s socio-economic progress. The key sub-Saharan Africa economies barely managed to score half of the global median of 100 points, with South Africa, Kenya and Ghana leading the continent in global trade networks, scoring 63, 53 and 52 points, respectively. Nigeria scored 40 points. Urgent needs Economic developments in both economies, and the rest of the global economy, have prompted Kenya and Nigeria to take another stab at bringing East and West Africa together. In...

The African Union’s Commissioner for Trade and Industry Fatima Acyl has called for structural transformation to create jobs that will improve the wellbeing of the African people. Ms Acyl, who was speaking at a meeting in Addis last week, before the African Union summit, said the backbone of the AU’s industrial transformation plan is the African Mining Vision, and the creation of a Continental Free Trade Area. The mining vision, adopted by the Heads of State Summit in 2009, aims to make the mining sector more responsive to African economic and social development needs. “If you don’t transform, there will be a lot of importing of products that you have,’’ Ms Acyl said. She gave the example of her own country, Chad, which imports juices yet is a top grower of mangoes. The goal is to set up a free trade area by 2017. The AU has already approved the creation of an African Minerals Development Centre (AMDC) to provide strategic operational and co-ordination support to member states. The goal of the AMDC is to address price volatility, and to ensure stable incomes to African producers. Ms Acyl noted that many of the AU’s 54 member countries have populations lower than 20 million and economies of less than $10 million. The national markets of such economies are therefore too small to justify heavy investments. The establishment of a continental Free Trade Area will create a single market for goods and services in Africa with a total population of over a...

A key road linking the Port of Mombasa and Moi International Airport in Kenya is to be expanded to improve the movement of freight. The 6.4km road provides the only access to the airport and it links a container terminal at the port to the rest of East and Central Africa. It will be expanded into a dual carriageway and traffic lights and junctions will be installed to improve traffic flow at intersections. The $31m project is jointly funded by the Kenyan government and the UK Department of International Development, which is providing a grant of $11m through TradeMark Africa. The road aims to reduce traffic congestion in the Port Reitz area, which is a major artery for the movement of cargo to and from the port. Traffic congestion in the area has been identified as one of the key non-tariff trade barriers affecting businesses in East Africa. The road between Mombasa and Nairobi (pictured) is notorious for traffic jams. The improved road is also expected to reduce truck operating costs and halve the time it takes to enter and exit the port gates. Turnaround time for vehicles at the gates is currently four hours. James Macharia, Kenya’s cabinet secretary for transport and infrastructure, said: “Specifically, the link will serve as a key catalyst to improving the cargo handling capacity of the Port of Mombasa, in order to adequately serve Kenya’s growing economy, as well as retaining the Port of Mombasa as the preferred port of use by the neighboring economies....

NAIROBI (HAN) January 30, 2016 – Public Diplomacy and Regional Stability Initiatives News. Kenya and Tanzania are among the top nine countries in sub-Saharan Africa preferred for investments in the logistics market over the next five years. However, substandard infrastructure, corruption, terrorism and poor linkages across the region could pose a challenge to the growth of the region’s logistics market. The Agility Emerging Markets Logistics Index report, released last week, states that of the 1,200 supply chain and logistics executives interviewed worldwide, 15 per cent identified Kenya and 7.8 per cent chose Tanzania as their top preferred destinations in sub-Saharan Africa. The two countries were ranked at position three and six respectively. South Africa was ranked top and Nigeria second, with a 26 per cent and a 17.5 per cent potential respectively. The report shows that poor infrastructure, government instability and corruption remain the top risk factors in sub-Saharan Africa, according to 69.8 per cent of the respondents. Some 33.7 per cent cite poor infrastructure and the lack of physical connectedness as the main risk to supply chain operations in the region; 11.1 per cent cited terrorism as a hindrance, especially in the case of Kenya and Nigeria. Oil and gas discoveries, the growing middle class and mineral and resource demand were the top three reasons given by investors for their interest in Africa’s logistics’ market. Investors in the logistics industry said the challenges in the report are being addressed. The $3.27 billion standard gauge railway from Mombasa to Nairobi is...

As Nigeria’s President Muhammadu Buhari rounded off his three-day visit to Kenya which began on Wednesday, January 27, indications emerged that the visit, Buhari’s first to the East African country since he was elected into office in March 2015, may soon begin to bear fruit in terms of creating momentum for increased trade and investment between the two countries. This indication came as delegates from both countries at the Kenya-Nigeria Business Forum in Nairobi on Friday discussed the possibility of a duty-free zone for the importing and exporting of goods between the two countries and regions in the hope of opening up trade in Africa. Kiprono Kittony, Chairman, Kenya National Chamber of Commerce and Industry (KNCCI), said there had been an agreement to improve the data gathering in terms of the trade and investment going on between the two countries. 
“We would like to see that we have as much accurate information available to us so we can know whether the interaction at a higher level is being realized on a business to business frontier,” said Kittony, who also raised the issue of the ban list in Nigeria and how it limits the possibility for trade between the countries. Sani Dangote, Group Vice President, Dangote Industries Limited, however, said rather than focusing on the ban list, the focus should be on how to provide some bilateral agreement between the two countries to create some kind of duty-free zone whereby goods manufactured in Nigeria can come into Kenya duty-free and goods...

The regional business community has criticised the EAC Elimination of Non-Tariff Barriers to Trade Bill 2015, saying it needs extensive changes in order to be effective. The East African Business Council (EABC) has pointed out that elimination of NTBs is strictly dependent on the political will of the concerned parties, with no consequence for non-elimination and no restitution for aggrieved parties. To address this, EABC trade economist Adrian Njau proposes that the NTBs Act be taken back to the East African Legislative Assembly for amendment. Mr Njau argues that the Bill should provide for an alternative dispute resolution mechanism, arbitration by the trade remedies committee and the ability to petition the East African Court of Justice. The Bill insists merely restates the existing mechanisms to resolve disputes on non-tariff barriers in the region such as mutual agreement of the concerned partner states; implementation of the EAC time bound programme for elimination of identified NTBs; and regulations, directives, decisions or recommendations of the council as provided for under Article 9 on elimination of NTBs despite its failure to resolve disputes for several years now. However, the extension in 2015 of the jurisdiction of the EACJ, to cover issues related to trade and commerce, provides another opportunity for arbitration of NTBs in the region. “The EAC NTBs Bill, 2015, should be taken back to EALA for amendments,” EABC acting executive director, Lilian Awinja told The EastAfrican. Tanzania is said to have already assented to the Bill, meaning that it has formally committed itself to a binding legislation to eliminate NTBs...

Considerable economic success in Rwanda and the larger bloc of the East African Community (EAC) is attractive for American investors and the US government is focused on supporting stronger partnerships between US investors and members of the private sector in Rwanda and the rest of the EAC. The message was delivered in Kigali, yesterday, by US Secretary for Commerce Penny Pritzker during a business roundtable at Village Urugwiro that brought together business leaders from the US business and East Africa. Pritzker, who led a delegation of 13 members of the US President's Advisory Council on Doing Business in Africa and African CEOs, spoke highly of the economic achievements in Rwanda and EAC."Rwanda and the East African Community have a lot to offer US investors. East Africa is the most integrated and fastest-growing regional economic community in Africa," she said. She hailed Rwanda's efforts and success in facilitating businesses as well as the country's stable economic growth since 2000 - at an average of 8 per cent - and called for stronger ties between the country's traders and those from the US. "We are focused on steps the US government can take to support the establishment of stronger and lasting commercial partnerships between the US and the African private sectors, especially regions and countries where there have been considerable economic success and Rwanda is a prime example of this. From a commercial perspective, Rwanda's climb in the World Bank Ease of Doing Business is notable," she said. Under its Doing Business...

East African Community (EAC) member States will benefit from a Sh41 billion funding to fast-track three key areas critical to regional integration. The inter-governmental agreement concluded in Arusha between the German government and the regional bloc will support economic integration, regional health and water resource management over the next three years. The funding is as a result of realization that integration is still faced with key hurdles that need to be overcome despite available opportunities. Key challenges include inadequate and poor regional infrastructure network, water scarcity and difficulty in managing shared water resources, weak institutions and human capacity, insecurity and political instability. Other challenges are diversity across the economies and divergent country attitudes towards regional integration. Part of the funds (10 million euros) will be invested in the establishment of a regional network of reference laboratories for communicable diseases. Another 10 million euros will be used for integrated water resource management of Lake Victoria, aimed at improving water provision and management of water resources. Source: Media Max