The Commission on Revenue Allocation (CRA) has recommended a conditional allocation of revenue generated at the port of Mombasa to the host county government, a move likely to re-ignite a long-running row over resources generated at the gateway facility. CRA chairman Micah Cheserem told the Finance committee of the Senate that the county is entitled to a share of the revenue because of its investment in key infrastructure such as roads. “There is need for a conditional revenue allocation to Mombasa County from funds collected at the Port of Mombasa,” he said. Currently, all revenue collected by the port handlers – Kenya Ports Authority (KPA) – is channelled to the national government. In the financial year 2013/14, KPA realised about Sh30.7 billion in revenues. The county government of Mombasa has been pushing for sharing of revenue generated at the port, a proposal the national government has opposed citing provisions of the Constitution which left key facilities such as the port under its control. The county had this financial year projected to collect about Sh7 billion, partly from revenues collected at the port. The Senate Finance committee chairman Billow Kerrow urged the CRA to step in the deliberations between the government of Mombasa and the national government over sharing of revenues. The Mombasa county government recently slapped container freight stations (CFS) and fuel depots with higher inspection fees, a move that has already triggered fresh protests over the increased cost of business. The CFSs now face a five-fold increase in annual...

Nearly 6,000 users have been enlisted on the single online portal for lodging trade documents, boosting efficiency in the clearance of cargo. Treasury secretary Henry Rotich said the portal, known as Kenya Tradenet System, which was launched in 2013, had led to faster handling of the papers. “The system has also helped reduce incidents of corruption and enhanced service delivery for private and public entities,” he said in a speech read on his behalf by KenTrade chairman Joseph Kibwana during the launch of the agency’s Mombasa office. Previously, cargo clearing transactions involved physical approval of paper work leading to wastage of time. “These requirements, together with the associated compliance costs constitute a burden both to government and to the business community. This has been a major barrier to the development of domestic and international trade in Kenya and the region in general,” the official said. When fully operational, the system, which was rolled out in October 2013, will provide a single entry point for importers and exporters to electronically submit and receive approvals from 27 regulatory agencies. This is expected to make the processes faster and reduce costs of cargo clearance. It is projected that the system will save the economy $150 million (Sh15.7 billion) in the first two years, $200 million (Sh21 billion) in the third year and up to $500 million (Sh52 billion) over the next five years. Kenya TradeNet was set up with funding of $3.5 million (Sh367.5 million) from Investment Climate Facility (ICF), which is funded...

The Kenya National Highways Authority (KeNHA) has invited bids for the upgrade of the 172-kilometre Ahero-Isebania highway that is expected to boost trade with Tanzania. The project to be funded by the African Development Bank (AfDB) and the government of Kenya will be implemented in two lots, one covering the Ahero-Kisii stretch and another covering the Kisii-Isebania section. “Interested firms must provide information indicating that they are qualified to perform the services,” the agency said, setting a December 17 deadline for submission of bids. The project traversing four counties – Migori, Kisii, Homa Bay and Kisumu – is expected to improve trade in the Lake Victoria basin. Traders in Kenya and Tanzania presently struggle on the narrow and worn road. The new highway will have special service roads at commercial centres to boost uptake of goods. “The rehabilitation of the Isebania-Kisii-Ahero section of the Tanzania-Kenya-South Sudan Corridor will facilitate cross border movement of passengers and freight, and further enhance access to regional markets,” says the environmental and social study report. “The project road condition has deteriorated over the years due to increasing transit traffic on the road. Currently, the road carriageway width measures 4-5m wide, and increasingly is becoming a major constraint for the main economic activities within the Lake Victoria basin.” The report adds that traffic accidents have increased due to the narrow and heavily potholed road condition. The project will also entail upgrading 75km of feeder roads that connect to the highway. These include the Oyugis-Kendu Bay road...

The Treasury has been thrust into the spotlight as the government moved to implement a radical directive aimed at curbing suspected revenue leaks at the various private cargo container holding facilities. Kenya Ports Authority (KPA) managing director Gichiri Ndua last week said as from December 1 the agency would have the sole mandate of determining which freight containers would be held at the various container freight stations (CFSs) awaiting shipment. “All shippers, agents and shipping lines are therefore required to comply with this new government directive and ensure that shipping documents, including manifests and bill of ladings, are not endorsed to specific CFSs” he said in a notice. Presently, shipping agents freely choose where to direct their cargo awaiting shipment to the various destinations. “All local import containers must be manifested to the CFS nominated by KPA. KPA will subsequently process the nomination to the appointed gazetted CFS using agreed distribution criteria.” But yesterday, players from the shipping industry were scheduled for a special meeting with Treasury secretary Henry Rotich amid concerns over the directive. “We have a meeting this afternoon (yesterday) to oppose the guidelines as they go against best practice and maritime regulations,” Gilbert Langat, CEO of Shippers Council of East Africa told the Business Daily ahead of the meeting with Mr Rotich. According to a work plan by KPA, a total of 12 vessels had to be nominated to six CFSs between yesterday and November 30 when the new system takes effect. The government is currently battling...

iShamba, a mobile based platform that enables small holder farmers access real time agricultural and market price information and expert advice via SMS and a call centre, won global recognition in the recently held Mobile Innovation Awards. iShamba is funded by TRAC, the TradeMark Africa’s Challenge Fund and was devised by Mediae Company, Kenya. [caption id="attachment_10865" align="alignleft" width="600"] TMA challenge fund grantee iShamba wins two innovation awards[/caption] On 6th October 2015, the Mediae Company was awarded the winner of the ‘Effective Integration of Mobile in an OmniChannel Strategy’ category to reflect the valuable contribution made by iShamba in delivering agricultural information to farmers via SMS and call centre, alongside Mediae’s existing Shamba Shape-Up program that is offered via radio, print and TV. In addition, the product’s innovation was recognised with the “Regional Award (Africa)”. iShamba is the mobile complement to Shamba Shape-Up, an “edutainment” programme created by The Mediae Company. Aimed at East Africa’s rapidly growing rural audience, the makeover-style TV show aims to give its audience the tools they need to improve their farm’s productivity and profitability. Launched in March 2015, the iShamba project aimed to assist 20,000 smallholder farmers but as of the end of September 2015 this target had been well surpassed. The market price information improves a farmer’s bargaining power by providing timely information on crop prices from 27 markets across Kenya. “If you subscribe you get market prices for a couple of crops in a couple of locations, you get weather information, and we also...

The global chairman of the Pan African Movement and Kenya minister of Justice and Constitutional Affairs, Maj Gen Kahinda Otafiire, said  African governments should eradicate trade barriers if they are to create jobs and boost investment on the continent. Maj Gen Otafiire said this at the launch of a partnership between the Pan African Movement and TAL Group in Mombasa, Kenya. African countries continue to have trade barriers restricting the movement of goods and services despite efforts to unify the continent. In East Africa, for instance, the presence of nontariff barriers has restricted trading, especially where goods have to enter markets such as Kenya and Tanzania from Uganda. “African countries need to tear down artificial borders in order for the continent to get economic freedom. We have had political freedom for a while, but economic freedom remains a dream for most African countries,” Maj Gen Otafiire said. TAL Group runs a nine-acre Makupa Transit Shade at the Port of Mombasa. In June 2015, a coalition of three regional economic communities representing 26 African countries bringing together a population of 600 million people came together to form the Tripartite Free Trade Area, aimed at boosting intra-African trade. The continent, despite being resource rich, is one of the poorest with unemployment being a big problem. Unemployment among the youth in Uganda, for instance, is at about 63 per cent. “It is not until we pull our resources together so we can develop this continent. It hurts to see Africans drowning in the...

The World Trade Organisation’s Goods Council has approved a request from the US for the extension of the waiver of the Africa Growth and Opportunity Act (Agoa). The waiver means that goods from African countries will continue to have free access to the US market and are exempt from the most favoured nation and non-discrimination provisions under the WTO’s General Agreement on Tariffs and Trade. The US enacted legislation in June 2015 extending the Agoa programme for 10 years, or until 30 September 2025.  The waiver will run until the expiry of the programme. It is estimated that with the approval, trade under Agoa in the East African countries will bring in $100 million in new investment to the region, which will create about 10,000 jobs in the period through to 2019. Imports of goods under Agoa provisions totalled $11.8 billion in 2014. Over 91 per cent of US imports from Agoa-eligible countries entered the US duty-free under the Generalised System of Preferences (GSP), or other zero-tariff provisions, it added. According to Nelson Ndirangu, director of economic affairs and international trade at Kenya’s Ministry of Foreign Affairs and International Trade, the waiver had to be approved because it is inconsistent with the most favoured nation obligation. “Programmes such as the GSP, under which developed countries grant preferential tariff rates to developing country products, require a waiver by WTO because they accord some countries more favourable tariff treatment,” said Mr Ndirangu. Agoa enables about 6,500 commodities from sub-Saharan African countries to enter...

CONTAINERISED cargo imports will from December 1 undergo mandatory Container Freight
Station nomination by the Kenya Ports Authority. This follows a government move to enforce a scheme aimed at curbing tax evasion and
entry of sub-standard goods into the country. Under
the new rule that come's effective in two weeks, KPA will have the
sole mandate of nominating freight containers to designated CFSs. It
will replace the current arrangement where Kenya-bound shippers and carriers would endorse
specific stations. In
a public notice on Friday, KPA managing director Gichiri Ndua said all local
import containers including shippers nominated, must be manifested to the CFS
nominated by the authority. “All shippers, agents and shipping lines are
therefore required to comply with this new government directive and ensure that
shipping documents including manifests and Bill of Ladings are not endorsed to specific
CFSs,” Ndua said. According
to Ndua, KPA will process the nomination to the appointed gazetted CFS’s using
an agreed distribution criteria. Detailed
guidelines and standard operating procedures for the directive are to be
circulated today, Ndua said. A
CFS is a port facility for loading and unloading containerised cargo to and
from ships. KPA
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. The
government has outlined a four-month programme that also includes fresh vetting of all the registered 22 CFS’s in Mombasa and
installation of approved stock management systems. A fortnight ago, KRA...

Kenya Ports Authority (KPA) deserves commendation for taking steps to boost cargo handling at the Mombasa Port ahead of the completion of the expansion of the Suez Canal by the Egyptian government. According to KPA’s Managing Director Gichiri Ndua, the plans are to construct and equip four berths which will provide an estimated 600,000 Twenty Equivalents Units (TEUS), a measure of container capacity. Those doubting KPA’s wisdom of embarking on the road that would rapidly boost its capacity need only take a trip to Tanga and Dar es salaam ports to see the frantic efforts Tanzania is making to complete its expansion ahead of Mombasa so as to steal the latter’s thunder. The new terminal, with an annual capacity of 1.2 million TEUs, is being funded jointly by the government and the Japanese International Corporation Agency (JICA) at a cost of Sh91.8 billion and is being implemented in three phases on 1,000 acres. The terminal is scheduled to be operated by an international terminal operator through a 25-year concession The Cabinet Secretary for Transport and the Attorney-General might make the process easier by listening to advice from Simon Sang, the Secretary-General of Dock Workers Union, who says that a concessionaire should only operate at the port after the KPA Act is amended to change its status from a service to a landlord. See also: Thousands stranded along Mombasa-Nairobi Highway in three-day traffic jam Failure to amend the Act could mean that, given some Kenyans’ penchant for litigation, some busy-body would...

East African states have made considerable efforts in recent years to reduce the cost of doing business and boost intra-regional trade. There have been investments in large infrastructure projects, such as the expansion of ports and construction of highways; the introduction of one-stop border posts; and measures to ease the movement of goods and people across borders. But despite these efforts, the cost of doing business across the East African Community (EAC) remains high.

 Nairobi-headquartered TradeMark Africa (TMA) was established in 2010 with US$560m funding from a range of development agencies with the aim of improving trade in the region. TMA works with EAC institutions, national governments, and business and civil society organisations. How we made it in Africa spoke to TMA chief executive Frank Matsaert about the progress made in reducing trade costs, how to stop corruption, and the significance of informal traders. Below are edited excerpts. Businesses often complain about high transport costs in East Africa. Are things getting any better? The transport costs in East Africa are on average still about 60% higher than in the US and Europe. Landlocked countries like Rwanda, Uganda, South Sudan and DRC can’t export much because the costs are just so high. The high trade cost is holding back these economies. We aim to solve these challenges through initiatives that increase physical access to markets, enhance the trade environment, and improve business competitiveness. One of our targets is to increase trade by 10% by the end of next year and we are...