NAIROBI: Kenya and Nigeria are seeking to establish a duty-free trade zone between the two countries. This comes following trade talks between Nigerian President Muhammadu Buhari and his Kenyan counterpart Uhuru Kenyatta. Buhari, who is accompanied by more than three dozen business leaders and investors, winds up his three-day visit today with President Uhuru Kenyatta expected to visit Nigeria in six-months’ time. “We have agreed to have a unit in Kenya and Nigeria that will be concerned with facilitating all interactions concerning trade between these two countries,” said Mr Kiprono Kittony, the chairman of the Kenya National Chamber of Commerce and Industry (KNCCI). In Kenya, the unit will be housed under the KNCCI’s Nigeria-Kenya business council and chaired by Equity Bank CEO James Mwangi while in Nigeria it will be chaired by Sani Dangote, brother of Africa’s richest man Aliko Dangote and vice president of the Dangote Group. “We’ve identified several areas in agro-processing including cotton, tea, horticulture and dairy products that both Nigeria and Kenya can work together in expanding trade between the two countries,” said Mr Dangote. “East Africa is a market of about 150 million people and we have ECOWAS which is more than 350 million-strong and we want the Kenya-Nigeria business council to have its own office so that it can be dedicated to collecting data and facilitating interactions on this agenda,” he said. Kenya’s business community on the other hand expressed the need for policy makers in Nigeria to ease the cost of doing business...

Importers have protested closure of two Container Freight Stations (CFS) in Mombasa, saying the Kenya Revenue Authority (KRA) did not give them notice to clear their cargo. Association of Importers of Kenya (AIK) chairman Peter Mambembe said the closure of Autoport and Portside CFSs was unprocedural, and asked the taxman to immediately open the facilities so that importers could pick their goods. On Thursday morning, clearing agents and more than 600 workers found the gates secured with padlocks and seals. “How can the KRA shut down a CFS with thousands of containers destined for various locations including South Sudan?“It seems there are some forces that influenced this because even the KRA knows it is illegal,” said Mr Mambembe. Mr Kyalo Kaloki, an official of Logistics Link who claimed three of their vehicles were locked in the CFS, noted that they would incur huge expenses if they were not allowed to pick them. Receive cargo The closure follows a letter Kenya Ports Authority (KPA) sent to the stations’ management, notifying them that they would not be allowed to receive cargo from the port of Mombasa. “It has been decided that nomination of containers to your CFS be suspended with immediate effect,” managing director Gichiri Ndua said in the letter dated January 21, without giving reason for the action. The CFSs have not been receiving cargo despite an order issued by a Mombasa court instructing the KPA to continue sending cargo to the stations. The High Court in Mombasa issued the orders...

Kenya Ports Authority has warned shippers who transport commodities that are non-compliant with Kenyan standards that it will not clear discharge the cargo. In a public notice, KPA said all imports destined for Kenya through the port of Mombasa must be accompanied with a certificate of conformity that meets Kenya's pre-export verification conditions. It said any non-compliant goods arriving at the port will be detained and taken through further inspections with their importers subject to penalties for flouting the law. “Where post verification is undertaken for the non-compliant cargo, full verification charges shall apply as per KPA tariff,” reads the notice, signed by Gichiri Ndua, managing director of Kenya Ports Authority. Among imports not included in this new arrangement are goods already regulated by other government agencies such as Kenya Plant Health Inspectorate, Pest Control and Products Board, and Pharmacy and Poisons Board. Other imports not subject to the new requirements are products that are certified under the diamond mark scheme by Kebs, printed matter including textbooks and magazines, courier shipments through Jomo Kenyatta International Airport which are cleared under memorandum of understanding between Kebs and players in the courier industry and primary inputs for direct use in manufacturing. Source: The Star

Kenya and Nigeria have, over the last few years, signed several agreements of cooperation, the expectation is that Nigeria's President Buhari’s visit to the East African country will create momentum for implementing this deals. The Nigerian president’s three-day visit is to pay tribute to the fallen heroes killed by Al-Shabaab militants in Somalia, he and President Uhuru Kenyatta will also attend bilateral talks and co-host th Business Forum in Nairobi. "I think the agreements that were signed, several articles of cooperation between Kenya and Nigeria during President Johnathan's time in Nigeria were really to enhance the trade between the African countries and currently Kenya exports about 24 million dollars to Nigeria and imports about 6 million, so I expect that number to increase,” said James Obimbo, Corporate Finance Analyst at Genghis Capital. Obimbo believes this will also allow for the diversification of both countries in terms of the trade for commodities and also with immigration. "They really need to come to an agreement of making trade a lot easier, loosening the trade barriers for example so that makes it easier to export even more and both countries can really diversify their export markets,” said Obimbo. Obimbo also agreed that Kenya needs to cut down on the long process one has to go through to start a business in order to encourage more entrepreneurship in the country. "It really [needs to] cut down the long bureaucracy currently, where sometimes businesses would like to set up but they have to go to...

Maritime consultancy Dynamar has launched a review of container trades in the region of East and Southern Africa. According to this, the area has produced a significant growth, despite challenging conditions in many ports, in terms of infrastructure and other various bottlenecks, mainly associated with inland transportation. They explain more below. In the minds of many, East and Southern Africa including the Indian Ocean islands form an insignificant trade area. That may be true if comparing it with high volume areas such as the Far East. Yet, this region’s combined port throughput approaches 8m teu, technically more than the whole of the Australasian continent. And then, there is more scope for growth. Imagine that the East and Southern Africa container trades caught up in one year’s time with that of the USA with its population of 323m. In that case, the relevant African container volume would grow to 42m teu, up 1,200% from the 3.2m teu of 2014. A period of 25 years may be more realistic which would then translate into a compound annual growth rate (CAGR) of nearly 11%! That may be a bit exaggerated, but combined East and Southern Africa including the Indian Ocean Islands have seen full container volumes growing by a CAGR of over 9% since 2010. This backed up by the value of their merchandise trade expanding by more than 26% to US$385bn over the same period. Preparing for a buoyant future, many ports in the region are ramping up both their marine facilities...

LAST June, 26 African countries signed the Tripartite Free Trade Area (TFTA) agreement that, when implemented, will constitute about half of Africa’s gross domestic product (GDP), half its population and cover a combined land mass of 17-million square kilometres — about the size of Russia. The countries, with a combined GDP of about $1.3-trillion and a population of 565-million, will merge into a common market and eliminate tariff lines and trade barriers. They will benefit from liberalised intraregional trade, which is expected to boost the flow of goods and services. Today, however, only three of Africa’s eight regional economic communities are participating in the TFTA. Nonparticipating economic blocs include the Arab Maghreb Union, the Economic Community of West African States, the Intergovernmental Authority on Development, the Economic Community of Central African States and the Community of Sahel-Saharan States. The Abuja Treaty of 1995, signed by 51 African countries, mandates all regional economic communities to join the group by 2017 in anticipation of an African Economic Community by 2028. "The conditions (to form the TFTA) have never been better," says Sindiso Ndema Ngwenya, the secretary-general of the Common Market for Eastern and Southern Africa (Comesa). "We have improved governance, and the very fact that we withstood the global financial crisis of 2008 attests to sound macroeconomic policies. This is what is giving us resilience." The benefits of the free trade area are numerous. "It has the potential to increase economies of scale through integration, will increase demand for the region’s goods...

East African single tourist visa has been hailed as the most progressive visa regulation in Africa, But Uganda’s tourist minister has raised a red flag over what she terms as other countries signed to the treaty not honoring the agreement fully. According to The Observer, Maria Mutagamba said the number of tourists visiting the landlocked country have dropped since the single East African tourist visa system was introduced because Kenya and Rwanda are still using their local tourist visa. “We embraced it wholeheartedly, but our brothers and sisters in the two countries while they introduced the East African visa, they also maintained their local tourist visa,” Matagamba said, adding that Uganda was planning to reintroduce its local tourist visa too. Under the tripartite agreement know as “Coalition of Willing”, the three countries were supposed to stop issuing local tourists visas and adopt the $100 multi-entry visa that would allow tourists to access the three East African countries within 90 days using one visa. Tanzania and Burundi, which are also member of the East African Community did not join the other three. “The tourism sector is agitated. They say; ‘we must have our own tourism visa as Uganda’ so that we can also get our tourists coming here directly until we all agree that we are going to have one (tourist visa),” Matagamba said. There were worries that Uganda would not benefit from the Schengen visa-like agreement since Kenya and Rwanda normally attract more tourists. “For us (Uganda) to benefit from...

The Tanzania Bureau of Standards (TBS), a public institution in charge of undertaking measures for quality controls on imports and promoting standardization in industry and commerce, has recently started a campaign to dismiss all sub-standard products that are outstanding in the local market. The announcement was done by TBS Director General Joseph Masikitiko, whom explained that the government is closely working with local authorities to seize all products that don’t meet the country’s standards. Used rubber tires are among the main sub-standard products imported by Tanzania and it is proved that they are one of the main factors of motor accidents in the country, reason why the TBS will specially focus on foreign shipments to analyse them before they enter the market, Mr. Masikitiko added. According to the Massachusetts Institute of Technology (MIT), Tanzania has become one of the main importers of used rubber tires in Africa ranking in the 11th position totaling USD 4.69 million in 2013 up from USD 0.91 million in 2008. In addition, petroleum products will be also strongly surveilled since in December, 2015, the TBS rejected 38,000 metric tonnes of gasoline sub-standard product, reason why the shipment was sent back to United Arab Emirates (UAE) from Dar es Salaam port due to unacceptable elements found in the analysis, stressed Mr. Masikitiko. Petroleum Products constitute the main group of imports to Tanzania accounting for 36.15% of the country’s total imports and 93.4% of mineral imports in 2013 according to the MIT. Companies importing petroleum products that...

In the current global world, countries future and fate is intermingled. Positive developments in one country spill over to other parts. Similarly, negative phenomena that occurs by natural event or by human activity in a given country, could have repercussion on other parts of the world. Today global warming and climate change, poverty eradication and trade relation has brought countries together for good outcome. On the other hand, terrorism, extremism and security threats alert countries to spend their meagre resources for the well-being of their citizens, that can be allocated for development. However, we can safely argue that for most developing countries, eradication of ignorance, poverty, diseases, expansion of infrastructure, health and social service, enhancing food production and fighting hanger are common priority areas. In order to achieve development, first, countries should sort out what kind of resources they have at hand, how they could tap natural resources and mobilize domestic and international finance and technology. They as well could ultimately identify the type of energy their development scheme could be supported with. Here energy is both a means and an end for their development. Because, all economic sectors such as agriculture, industry and service essentially need energy. Without utilizing it, growth is unthinkable. On the other hand, energy makes a country economic powerful. By supplying energy, besides gaining hard currency, some countries, could be politically influential. Over the past decade, energy was proved to be a source of conflict at the international level. In contrary, countries suffering from energy...

A shippers lobby has taken the government to court over a new rule that bestows on the Kenya Ports Authority (KPA) the sole mandate of determining which freight containers would be held at the various container freight stations (CFSs) awaiting shipment. The Container Freight Station Association (CFSA) filed an injunction on January 22, claiming its members were not consulted on the plans. “Shippers have basic rights of operation and where to put their cargo is one of them. This directive seizes rights of importers,” Daniel Nzeki, the chief executive at CFSA said. Currently, importers and exporters are free to nominate their preferred CFSs prior to submission of import manifest to the Kenya Revenue Authority (KRA). Cargo not nominated by shippers is nominated by KPA and shipping agents are not mandated to nominate containerised cargo to CFSs. This arrangement is likely to change as the government hands powers to KPA to route cargo consignments to CFSs of its choice. “The KYOTO convention which Kenya is a signatory gives all authority in regard to cargo on the importer; the importer, therefore, decides the final clearance point of cargo,” William Ojonyo, managing director of Keynote Logistics said. International trade “It is, therefore, both illegal and uncalled to purport to give direction on an area whose jurisdiction lies with the importer in the international trade contract,” he added. The Treasury’s controversial directive aimed at curbing revenue leaks at such facilities was initially scheduled to kick off on December 1 but industry players petitioned Treasury...