Kenya has called on small businesses to exploit market access opportunities available under the recently renewed African Growth and Opportunity Act (AGOA) to increase the country’s export to the U.S. market. Adan Mohamed, Cabinet Secretary for Industrialization and Enterprise Development, said the government has worked on the structural problems that hinder entrepreneurs to venture into the U.S. market. "In the last five years, we have reduced the standard cost of doing business by reinforcing transport, ports and electricity while reducing regulatory burdens like licensing procedures to enable our entrepreneurs trade," Mohamed said at a small and medium-sized enterprise forum that concluded in Nairobi on Monday. AGOA is a preferential market access system given to specific countries in Africa and the Caribbean by the U.S. Under the trade agreement, most of Sub-Saharan African countries are allowed to export over 6,000 products duty-free to the United States. According to Mohamed, Kenyan entrepreneurs had not fully exploited the market access opportunities under AGOA in its last term due to competitive disadvantages within the economy. Data from the Export Promotion Council indicates that Kenya’s non-textile exports to Washington mostly consists of coffee, fruits, precious stones, nuts, cut flowers and tea, while its imports include machinery and other capital goods. Mohamed said that Kenya has made strides in streamlining its standards in alignment with global processes to reduce cumbersome product approval process Kenyan entrepreneurs face abroad. "The Ministry through Kenya Bureau of Standards has issued standardization mark permits to Kenyan firms to increase global market...

The construction of phase II of Mombasa port terminal in Kenya will start early  2017, Kenya Ports Authoritymanaging director Gichiri Ndua has said. When complete, the second container terminal  will provide and additional capacity of 470,000 and 550,000 TEUs. Mr Ndua added that the construction project of phase II of Mombasa port terminal in Kenya will cost US$ 213m to complete.He further pointed out that the Kenyan government had signed a US$241.3mn loan agreement with the government of Japan to help finance the project construction. Once construction is complete, the new Mombasa port in Kenya terminal will mostly be operated by an international operator through a 25-year concession and according to reports the traffic forecast has indicated that annual container throughput will rise from 1.012mn TEUs handled in 2014 to 1.12mn this year. It is expected to further grow to 1.8m upwards to three million TEUs between 2016 and 2030. KPA authorities confirmed that the construction of phase 1 which is more than 90 per cent complete is anticipated to be ready by February 2016 having cost US$ 900m. The port of Mombasa in Kenya is a key trade gateway in East Africa serving countries like Uganda, Rwanda, DR Congo, Burundi and Southern Sudan. Kenya Ports Authority (KPA) is a state corporation mandated to “maintain, operate, improve and regulate all scheduled seaports” on the Indian Ocean coastline of Kenya, including principally Kilindini Harbour at Mombasa. Other KPA ports include Malindi, Lamu, Kilifi, Mtwapa, Shimoni, Kiunga, Funzi and Vanga. Source: CR

In East Africa, Rwandan Minister of Infrastructure James Musoni last week confirmed that planned power imports from Kenya have been delayed due to incomplete high voltage transmission lines and substations between Kenya, Uganda and Rwanda. The three countries including South Sudan have engaged into an arrangement dubbed the 'Northern Corridor Integration Projects'. Speaking at the two-day iPAD Rwanda Power and Infrastructure Investment forum in Kigali, Musoni said Rwanda will have to wait until April 2016 for the power to be imported, due to the delayed upgrade of infrastructure. Rwanda expects 480MW of power import Uganda has committed to export 50MW to Rwanda, while Kenya has agreed to export 30MW while 400MW will be coming from Ethiopia. The regional electricity power exchange line from Olkaria in Kenya to Birembo in Southern Province, through Uganda, has the capacity to transport 400kV. "But the electricity interconnection lines we have with Uganda can only transmit 2MW," Musoni said explaining the delays. IPPs to the rescue The delay on power import has resulted in the Rwandan government calling for tenders from independent power producers (IPPs) to set up a thermal power plant, which is expected to be delivered by February 2016. According to The East African newspaper, among the three Northern Corridor countries, Rwanda is at an advanced stage of completing its infrastructure projects, with about 75% of work on power stations completed. Rwanda began electricity cuts in June, which worsened in August as water levels at the hydro power generation stations reduced.The state-owned utility, Rwanda Energy Group,...

Kenya’s resilient economy is linked to the country’s strong intraregional trade, which has cushioned it from the global financial crisis. Much of Kenya’s trade is with its East African peers, a factor that has strengthened its financial sector by ensuring the country is not exposed to the volatility in the global financial market. According to Central Bank of Kenya (CBK) Deputy Governor Sheila M’Mbijiwe, 40 per cent of Kenya’s trade is largely regional and this has cushioned the country’s currency against volatility in the global market. “The diversity of Kenya’s trade within the region has helped it stabilise its currency,” explained M’Mbijiwe. Kenya’s trade with the East African countries --Tanzania, Uganda, Rwanda and Burundi--in 2014 amounted to Sh126 billion, while trade with the rest of Africa amounted to Sh115 billion. This brought trade with Africa to stand at Sh241 billion. However, the shilling has lately been hard-hit by the strengthening of the dollar, with the local currency dipping to a low Sh106 against the greenback in September. M’Mbijiwe also noted that a dozen of Kenyan banks have been at forefront in doing cross-border trade in the region. A recent report by the International Monetary Fund (IMF) showed that Kenya is among the few countries in Africa that have played an active role in shaping the concept of Pan-African banking with banks such as Equity, Co-operative Bank and KCB venturing into the region and beyond. Other countries include Nigeria and South Africa. She was speaking at the opening of the 15th...

Kenyan Cabinet approves establishment of main branch of African Export Import bank in Nairobi NAIROBI – The Kenyan Cabinet on Tuesday approved the establishment of branches of the African Export Import bank which will handle the affairs of the five members of the East African Community (EAC) –Kenya, Burundi, Rwanda, Tanzania and Uganda. The African Export Import Bank was established in October, 1993 by African governments, African private and institutional investors as well as non-African financial institutions and private investors for the purpose of financing, promoting and expanding intra-African and extra-African trade, according to the bank’s website. Its headquarters is in Cairo. There will be a main branch located in the Kenyan capital Nairobi, and there will be a branch office outside the city to serve the East African Region, the cabinet said in a statement. “The choice of Nairobi by the African Export-Import Bank as a host city for the Bank’s regional office for Eastern Africa is an attestation to the recognition of Nairobi as a regional hub and its global significance,” the statement said. According to Dr. Samuel Nayndemo, an economist and lecturer at the University of Nairobi, the choice of Nairobi as a seat for the bank is significant. “This is a clear picture that shows that the country is a financial business hub, that is good for the country, especially for the financial sector,” he told Anadolu Agency in an interview on Tuesday. “It was not by accident that Nairobi was chosen to host the regional bank; within the region, Nairobi is among the best in terms...

EXPORTS from East African Community bloc to the United States, under the African Growth and Opportunity Act, will be increased by 50 per cent in five years, an official of the East Africa Trade and Investment Hub said yesterday. The director for trade promotion and AGOA Finn Holm-Olsen said they will also bring in $100 million (Sh12.02 billion) in new investment to the region, which will create about 10,000 jobs in the period through to 2019. He said the programme sponsored by the USAid will enable the business community in Kenya and the region to fully utilise AGOA. “We are looking to increase exports from the region to the US by 50 per cent. The $100 million comprises of new investments coming in and expansion of current businesses,” he said in an interview during a national capacity building forum to educate micro, small and medium-sized enterprises on the benefits of AGOA, in Nairobi. “In one year alone, the project has supported $81 million (Sh8.28 billion) in exports to the US under the AGOA,” he said. The AGOA Act provides African countries with free access to the US market. Kenya has mainly been exporting textiles and apparels, leather and fisheries, and processed agricultural products. Micro and Small Enterprises Authority chief executive Patrick Mwangi said many MSMEs have not benefited in the AGOA framework due to lack of information. He said most of the products that are being exported to the US under the AGOA are from the various export processing zones...

South Sudan will push for admission into the East African Community at the Heads of State Summit in two weeks time, despite having not met all the eligibility criteria. Government officials argue that Juba has already opened its economy to EAC members though questions on governance, democracy, human rights and security linger. Foreign Minister Barnaba Marial Benjamin, who led a high level ministerial committee to the latest EAC session on South Sudan accession in mid-October, said that a technical committee had recommended that Juba “is now qualified” to join the bloc. The EastAfrican was unable to independently verify this because the committee’s report is being kept under wraps until it is presented to the EAC Council of Ministers meeting in November 15. “It is just like when Burundi and Rwanda were admitted in June 2007 while they had similar challenges, and managed to solve them from within,” said Dr Benjamin. “We believe that South Sudan has a better chance of resolving its challenges faster and more effectively as a member of the EAC.” In a briefing to parliament on October 26, the presidential advisor for economic affairs and co-chair of the High Level Committee on South Sudan Accession to the EAC, Aggrey Tisa Sabuni, said that the recommendations clearly state that there is a strong push by the ministers of EAC affairs for South Sudan to be admitted into the regional bloc within the shortest time possible. “While the ultimate decision lies with the heads of state, they will almost...

The Common Market for Eastern and Southern Africa (COMESA) officials have lauded Rwandan cross-border transporters for embracing the yellow card scheme, noting that it has helped local logistics firms to reduce costs, and ease movement of goods and persons within the region. Sindiso Ngwenya, the COMESA secretary general, said the number of subscribers under the scheme is growing annually, adding that the amount of claim compensations paid to road accident victims has also gone up. "Through the yellow card scheme, COMESA has contributed to region's competitiveness by reducing cross-border transport and transaction costs... It saves transporters and business community time and money," he added. This was in a speech read for him by COMESA's Berhane Gidy during the group's meeting on regional third party motor vehicle insurance in Kigali last week. The meeting attracted participants from all the 19 COMESA countries. The yellow card scheme is a regional third party motor vehicle insurance scheme for medical expenses resulting from road traffic accidents caused by visiting motorists. It also offers emergency medical cover for the driver and passengers of foreign trucks involved in traffic accidents. Speaking at the conference, Emmanuel Hategeka, the trade and industry ministry permanent secretary, said economic integration is essential to support the private sector, improve operations and ease cost of doing business. He added that COMESA has created a favourable legal, economic, political and social environment, "which opens up tremendous opportunities for business". Hategeka said major economic reforms have been implemented with the trade bloc, but called...

NAIROBI: Kenya's economy is not all doom and gloom, after all. According to the International Monetary Fund (IMF), the country's growth prospects and debt/gross domestic product (GDP) ratio are within acceptable levels. IMF further asserts that Kenya's current and projected growth prospects are better than those of her peers in the sub-Saharan African region. The Bretton Woods institution has tipped sub-Saharan Africa's economy to expand at 4.5 per cent in 2015. The institution has since downgraded Kenya's GDP growth for 2015 from 6.9 per cent to 6.5 per cent. Speaking during the launch of the Regional Economic Outlook for sub-Saharan Africa, Kenya's IMF Resident Representative Armando Morales, downplayed fears that the country's debt-to-GDP ratio was spiraling out of control. "Debt in Kenya is classified by the IMF as low-distress risk. And to move to distress, you have to move through two other categories - moderate risk and high risk, and Kenya is below that. So it is very unlikely that the country will face a situation of distress in the coming years," said Mr Morales. no alarming bells He added the country's deficit is not alarming. He said:  "As long as the deficits for this year and the coming fiscal years remain projected at the same levels, then it is sustainable." He revealed that IMF has a programme in place to review the country's progress on maintenance of deficit.Morales' position was supported by Chris Kiptoo of Trademark East Africa who asked the Government to find a way to counter the...

Regional revenue bodies have been urged to embrace technology to solve some of the challenges facing the implementation of the single customs territory initiatives. Raphael Tugirumuremyi, the commissioner of customs at Rwanda Revenue Authority (RRA), said technology is essential in solving problems in revenue collection on the continent and facilitating trade. Tugirumuremyi was speaking at the Eastern Africa Regional Technical Assistance  (Afritac East) regional workshop on the implementation of single customs initiative in Kigali last week. The workshop brought together different revenue authority officers from eight countries - Uganda, Tanzania, Kenya, Zambia, Ethiopia, Malawi, Burundi, and hosts Rwanda. Tugirumuremyi was hopeful that the training would enable regional customs officers to use the knowledge acquired to adopt ICTs in their operations, saying these are important to improve customs operations and help drive regional development agenda. Patrick Chisasa from the Malawi Revenue Authority said the knowledge acquired would help them devise mechanisms to reduce the previous multiple transactions by businesses in customs clearance. “Different customs procedures are being implemented under multiple transactions which is costly, but we expect that costs will be reduced as long as we are looking forward to join the regional single customs,” Chisasa said during the workshop. The International Monetary Fund’s (IMF) AFRITAC East Centre sponsored the workshop. The single customs territory initiative was launched by East African Community countries in September 2013. The bloc’s neighbours, including Zambia, Ethiopia and Malawi, are looking to learn its operation as they seek to join the initiative. Source:  New Times