Container Freight Stations (CFSs) in Mombasa have made a proposal that will see them clear cargo at their facilities and hand it over to the Kenya Railways for transportation to the Nairobi Inland Container Depot via the Standard Gauge Railway (SGR) freight trains. If relevant government agencies approve it, the proposal by the CFS Association of Kenya will see CFSs clear goods in Mombasa and deliver containers to the SGR terminal at Port Reitz for onward transportation to Nairobi. The Kenya Railways (KR), Kenya Revenue Authority (KRA) and Kenya Ports Authority (KPA) are the key agencies involved in cargo handling and clearing procedures. The agencies are understood to be studying the proposal with keen interest, following challenges faced in transferring cargo from the road to the trains. The Nairobi ICD was upgraded from a capacity of 180,000 twenty foot equivalent units (Teus) to 450,000 at a cost of Sh23 billion and KR has to load 324 containers on three trains daily, a target which has proved difficult to meet. In the advent of the SGR freight trains, there have been fears that the CFSs might be edged out of business but this proposal could give them a lifeline with the CFS Association saying at least 250 people will be tasked with marketing the train service to importers across the country. Reached for a comment, the Association executive officer Daniel Nzeki declined to give details, saying they had engagements on “several matters” with KR, KPA and KRA that had not been...

African leaders have just signed a framework establishing the African Continental Free Trade Area, the largest free trade agreement since the creation of the World Trade Organisation. The free trade area aims to create a single market for goods and services in Africa. By 2030 the market size is expected to include 1.7 billion people with over USD$ 6.7 trillion of cumulative consumer and business spending – that’s if all African countries have joined the free trade area by then. Ten countries, including Nigeria, have yet to sign up. The goal is to create a single continental market for goods and services, with free movement of business persons and investments. The agreement has the potential to deliver a great deal for countries on the continent. The hope is that the trade deal will trigger a virtuous cycle of more intra African trade, which in turn will drive the structural transformation of economies – the transition from low productivity and labour intensive activities to higher productivity and skills intensive industrial and service activities – which in turn will produce better paid jobs and make an impact on poverty. But signing the agreement is only the beginning. For it to come into force, 22 countries must ratify it. Their national legislative bodies must approve and sanction the framework formally, showing full commitment to its implementation. Niger President Issoufou Mahamadou, who has been championing the process, aims to have the ratification process completed by January 2019. Cause and effect Some studies have shown...

Businessmen in Mombasa and other coastal counties are seeking alternative incomes streams following the massive loss of business to the Standard Gauge Railway. According to reports, the region’s economy will experience a decline of at least Sh40 billion in revenues this year. And there are new fears that the future of the region could be bleaker following proposals by the National Treasury to abolish tax exemptions on hotels and other hospitality ventures in the June national budget. Tourism is a pillar of the region’s economy besides the port in Mombasa. Container storage An urgent meeting of the business community called by Mombasa Senator Mohamed Faki in Mombasa last week resolved to form a steering committee to push for speedy establishment of the Dongo Kundu Special Economic Zone (SEZ) to promote manufacturing and job creation. Johson Mutuku, a consultant with Stratton Consulting Ltd, told the meeting that the SGR cargo service was expected to transfer 300,000 containers this year from the port of Mombasa to Nairobi at an average of Sh70,000 per container. This will lead a Sh21 billion loss of business for truckers. Mr Mutuku also noted that Container Freight Stations (CFSs) were likely to lose Sh12 billion in missed container storage this year while bus firms and other businesses would also report declined revenues in Mombasa and its environs. “SGR is good for business nationally, but will cause a decline in revenues for many businesses in the Coast region. It is important for business people to adopt alternative businesses...

Construction of phase two and three of 26.8-kilometre Dongo Kundu Bypass in Mombasa is set to begin in June as the Kenya National Highways Authority (KeNHA) seeks to complete the road that will connect north coast and south coast. KeNHA said on Friday that tenders for the project were evaluated last month and will be awarded shortly. “In three months’ time, we will be starting the last two phases. The tenders for the project were evaluated last month and soon we will know who has been awarded so that we can get the project moving,” KeNHA assistant director of corporate communication Charles Njogu said in a statement. The second phase of the Dongo Kundu Bypass project consists of an 8.9-kilometre road between Mwache Junction and Mteza, while phase three involves construction of a 6.9-kilometre road from Mteza and Kibundani – connecting the highway to the Likoni-Lunga Lunga road. The project will involve construction of an interchange at the Likoni-Lunga Lunga highway and installation of two bridges: one at Mwache – spanning 900 metres, and a second one at Mteza straddling 1.4 kilometres. In November 2014, Kenya signed a Sh25 billion loan agreement with the Japan International Cooperation Agency (Jica) to finance the construction of the Dongo Kundu Bypass. The loan will be repaid in 30 years at an interest rate of 1.2 per cent, after a grace period of ten years. Meanwhile, construction of an 11km road in phase one of the project is currently 80 per cent complete, according to KeNHA....

Chinese contractor China Road and Bridge Corporation (CRBC) is set to extend the standard gauge railway (SGR) line deeper to cover its 10 berths at the Mombasa port. The move is aimed at facilitating easier movement of bulky and heavy goods such as clinker, steel, iron and cement into the SGR. The Kenya Port Authority have been offloading goods via cranes once they land at various berths at the Port of Mombasa and transporting them via trucks to the SGR line. “There are plans in place to extend the SGR to cover berth No 1 to berth No 10,” Transport secretary James Macharia told the Business Daily. “We are extending the railway line along the 10 berths so that as ships arrive, you can have the cargo coming straight from the ship into the SGR train.” Unlike the defunct Rift Valley Railways which used to charge between Sh670 and Sh145,000 per 20-foot container depending on the weight, CRBC is expected to ask for a uniform promotional charge of Sh50,000 per container. The company will be assigned 40 per cent of Mombasa port’s yard cargo, a move which may edge out trucks out of the lucrative container business. “Feasibility studies have been undertaken. This is part of the initial contract signed by the company to extend the railway line between Nairobi and Mombasa. It’s called the first mile connectivity which will take about six months to complete once works start,” he said. China Road and Bridge Corporation, which constructed the 472-km...

The Bill for ratifying the treaty, which was signed in Kigali, Rwanda, by 44 African nations, will be presented to Parliament within the next few days following its approval by Cabinet in its first sitting. The treaty will come into effect after it is ratified by 22 countries and Kenya will be one of the first countries that will adopt the agreement. The Cabinet which was chaired by President Uhuru Kenyatta and attended by Deputy President William Ruto, urged the private sector to take full advantage of the business opportunities presented by the AfCFTA deal to extend Kenya’s foothold into all the 54 African nations. “It is a great opportunity to export goods and services to the region and the continent,” the Cabinet said. The AfCFTA will establish a single liberalized market that will spur industrialization, infrastructural development, economic diversification and trade across the continent that is home to more than 1.2 billion people. The pact also seeks to promote industrial development through diversification, regional value chain development, agricultural development and food security. When fully implemented, the treaty is expected to enable residents of all member countries to enjoy the convenience of a single passport and currency. The trade deal also binds all State parties to eight objectives including the progressive elimination of tariffs and non-tariff barriers to trade in goods. The signatory State parties are also expected to progressively liberalize trade in services. Also Read  Voting kicks off in Kitui West by-election Under the agreement, African countries will establish...

With no shortage of shocking headlines in the past few weeks, it’s understandable that many Canadians might’ve missed that the Trudeau government launched free trade negotiations with the world’s fifth largest economic market — one with over 270 million people and a GDP of more than $3 trillion dollars. In fact, they can even be forgiven for not knowing it by name:  Mercosur. Mercosur is the world’s fourth largest trading bloc, comprised of some of the most important economies in South America: Brazil, Argentina, Paraguay, and Uruguay. Argentina and Brazil, in particular, are high-growth markets both rich in natural resources and home to expanding middle class populations.  They are so-called ‘emerging’ markets, not unlike Mexico, Nigeria, and South Africa. With the continued uncertainty around NAFTA, and the slow pace of talks with India and China, Mercosur represents a welcome addition to Canada’s trade diversification strategy.  To date, Mercosur has not signed a free trade agreement with any western economy. Interestingly, and perhaps surprisingly, it only has trade agreements in place with Israel, Egypt, Palestine, and Lebanon. The renewed Canadian interest in Mercosur is due in large part to Argentina’s pro-business President Mauricio Macri — currently the Chair of Mercosur. Macri was elected in late 2015, shortly after Prime Minister Justin Trudeau, and moved quickly to transform a country that had effectively languished under his more erratic and controversial predecessor Cristina Fernandez de Kirchner. Since Marci’s election, Argentina has taken steps to liberalize the economy by lifting capital controls, removing export...

International trade has brought great benefits, but also inequities. By incorporating the philosophy of the SDGs into trade agreements, trade has the potential to benefit all. The value of world trade has nearly quintupled over the past 20 years from $5 trillion to about $24 trillion. Over the same period, trade has proved to be an excellent medium to leverage and promote economic growth, helping lift a billion people around the globe out of extreme and abject poverty. But in the last 10 years there has been a significant change in how international integration is perceived by the public and pursued in policymaking. As new middle classes have emerged in developing countries, middle-class prosperity in developed countries has found itself wavering. After the financial crisis of 2008, and especially in the last few years, the debate around the benefits of international trade has become much more fractious. One particularly contentious point is whether trade integration – establishing freer trade between countries – has resulted in inequitable economic growth, with some people and nations benefiting at the expense of others. Even the simplest classroom trade models acknowledge that trade benefits accrue unevenly. Trade integration can polarise the gap between the low and high skilled, suppress wage growth for workers facing overseas competition and create hardship and displacement for those who lose their jobs. As it happens, trade agreements are generally devised to reduce trade frictions across borders, while paying little attention to the distribution of the costs and benefits of trade...

Women Entrepreneurs in Kenya will hold a business meeting next month to discuss innovation solutions. Dubbed "Breakthrough to excellence: Uncovering business opportunities that give you a competitive edge" the forum will focus on changing the African traditional business model. The networking event, to be held at Karen Country Club, will bring together Carole Kariuki CEO, Kenya Private Sector Alliance, Wandia Gichuru MD of Vivo Activewear and Maggie Ireri director of TIFA Research among others. “Women compose over half of Africa’s rising population and their inclusion in social, political and economic spheres is critical if Africa is to reach elevated growth levels” FEWA founder and chairperson,  Joanne Mwangi-Yelbert, said in a statement.  According to a report by Ernst and Young, due to limited possibilities for advancement in their home continent, a significant proportion of degreed African women, nearly a third at 28 per cent, migrate out of Africa in search of suitable job opportunities. This is in contrast with only 17 per cent of educated men.  The rallying call is now out for African women entrepreneurs to rise to the challenge of finding solutions for Africa.  “African women are very entrepreneurial, owning a third of all businesses across Africa, however, many women entrepreneurs typically run microenterprises in the informal sector, often in businesses that reap low marginal returns due to minimal value addition on their products. This is a trend we need to change,” she said. Source: The Star

An economist and the Mombasa senator have raised fears the county will be losing at least Sh40 billion in revenue annually once the Naivasha dry port becomes operational. The government has directed all un-nominated containers belonging to upcountry importers transported on the SGR to the Inland Container Depot in Embakasi, Nairobi, for final clearance. Director of Stratton Consulting Ltd Johnson Ngila said of the 30 million tonnes of imports through the Kenya Ports Authority last year, 70 per cent was local cargo, the rest on transit. "Ninety per cent of local cargo was for Nairobi and its environs. This means the Naivasha port will really be taking a lot of cargo from Mombasa," he said. "This is good for the general economy but for Mombasa, it might have adverse effects depending on how businesses reorganise themselves to manage the disruption that will eventually happen because of the dry port." He spoke on Friday in Mombasa at a breakfast meeting organised by Senator Mohamed Faki. Ngila said the three SGR cargo trains that transport 300 containers daily, eliminating an equal number of trucks from the roads. "On average, the best we see the SGR doing this year is about 300,000 containers. And looking at the standard and average cost of ferrying a container to Nairobi, it will translate to about Sh21 billion in terms of lost businesses for truck owners," Ngila said. The director said the Container Freight Stations in Mombasa will lose the same number of containers and about Sh12...