NAIROBI, KENYA - President Uhuru Kenyatta last week told regional legislators the East African integration message was not getting across fast enough and asked for more momentum from all concerned.  Quat “I wish to make it clear that we who are convinced of the imperative of integration must communicate it better to our people. Too often, the integration of East Africa is taken to be merely a political matter - a job for politicians, not ordinary people. True, leaders must lead.  But we have failed to spark the imaginations of East Africans when it comes to integration,” he said last week while addressing the East African Legislative Assembly (EALA) in Nairobi. He asked on the Assembly to consolidate its work on the integration process.  President Kenyatta further said the citizens of the region were yearning to freely move, work and enjoy the tangible benefits of integration. The President was addressing a Special Sitting of the 2nd Meeting of the 4thSession of the 3rd Assembly. Keanyatta reiterated his commitment and that of his government to the integration process. “I will begin by repeating my Government’s complete commitment to East African integration. I know that the future of each of us in the region is bound up with the fate of all the rest.  Leaders must create the laws, the institutions, and the framework that will help us face that future together. Kenya will play its part in that great task,” he said. According to a press release, the President further urged...

As long as not enough momentum is built up over the East African economic integration ideal, the issue of non-tariff barriers (NTBs) is likely to stay with us for sometime to come. It is easy for politicians to pay lip service to these great ideals. Technically that is their job. For people on the ground it can be a totally different story. Here we are talking about protection of jobs and livelihood. Paradoxically, it is also frequently the same politicians who shout for the elimination of NTBs who then turn around and tell their people to ignore what they are saying in public. Most trade barriers are put up in response to competition or specifically fear of competition. NTBs are a  favourite tool, because the government can think of plenty of other reasons to impose them other than competition. They can also cite unfair competition when one government subsidies the production of an enterprise. It is well and good that there is a mobile phone system that allows one to report NTBs in real time. But dismantling NTBs will only quicken when all EAC governments are singing the same song of ‘free trade across  borders’. This is not to say that there are no genuine reasons why one product or commodity should not be restricted. But let us not use these same genuine reasons to impose NTBs out of fear of competition. On paper, the East African Community Treaty is a momentous collection of what can define a great undertaking. You...

Reducing tariffs is a great start for increasing trade within Africa, but important non-tariff barriers (NTBs) must also be reduced in order to boost trade both within and outside of the continent. In fact, the United Nations Economic Commission for Africa found the costs of NTBs in 2010 were higher than the costs of tariffs. The African Development Bank notes that, “while tariffs have progressively fallen, the key challenge to intra-African trade is non-tariff barriers that stifle the movement of goods, services and people across borders.” What sort of non-tariff barriers exist in Africa? Infrastructure across the continent is poor, discouraging the movement of goods and people. Less than a quarter of roads are paved, and those are often filled with potholes. It’s not uncommon for airfare with a layover in Europe or Asia to be cheaper than direct intra-continental flights. Meanwhile, seaports are crumbling and rail connection is paltry. “Thick borders” are also an issue, created by burdensome administrative procedures for clearing goods for import and export. Lines of trucks at the border lead to waits measured in days due to excessive bureaucratic red tape and burdensome administrative procedures. A report by Transparency International (TI) and TradeMark Africa (TMA) found that drivers at Rwanda-Tanzania customs stations spent an average of 72 hours obtaining customs clearance. World Bank economist Paul Brenton found that a truck serving supermarkets across a Southern Africa border may need to carry up to 1600 documents to comply with different countries’ requirements for permits, licenses, and other required...

Share this story: NAIROBI: Last week I attended a conference organised by the Kenya Bureau of Standards (Kebs). It is one of the few government institutions that are in a direct line of fire every time fatalities or injuries occur from consumer goods that, prior to entering the market, must have the seal of approval. Ensuring quality and safety is the primary responsibility of Kebs. Earlier this year, there was an outcry over the effects of unlicensed, often poisonous alcoholic brew that led President Uhuru Kenyatta to declare an all out war on illicit brew. There have been incidences of imported maize laden with aflatoxin resulting in unnecessary deaths. There have been cases of expired or uninspected cosmetics and foodstuffs finding their way onto supermarket shelves, endangering lives. Products have been finding their way into the Kenyan market without the prerequisite certification or meeting international standards. Fighting counterfeit and substandard goods is the mandate of Kebs. Yet for some time there have been fears the regulatory body was not up to task given counterfeit goods permeating every corner of the country. The high turnover of top managers in a short span of time pointed to political machinations given the sensitivity of the institution. Politicians, being who they are, would unfairly try to influence the issuance of import licences to friends or themselves. This has for a long time compromised professionalism. But, as musician Bob Marley sang; out of the darkness there must come out the light, Kebs is a whole...

A World Bank report ranks the manufacturing sector as Kenya’s best bet to in reducing unemployment and creating more wealth should certain strategic support measures be put in place by the Government. According to the report, these measures include improved business environment, removal of market distortions that undermine competition, improved productivity and innovations, enhanced access to markets and enriched collaboration across sector levels. The World Bank’s Apparel and Textile report finds that manufacturing is crucial to job creation, industrial development, and growth, but has lately been underperforming compared to other growth sectors. Growth in the sector has been shrinking or stagnating, with figures from the Kenya National Bureau of Statistics (KNBS) showing that the sector’s growth in this year’s second quarter shrunk when compared to performance registered in the first quarter. The report highlights some of the challenges that have bedevilled the value-chains of two manufacturing sub-sectors--apparel and textile and furniture--which have by extension frustrated efforts made towards increased employment and wealth creation in the sector. The situation was aggravated by challenging in the country’s business environment, a balance of power that is skewed against manufacturing and limited collaboration across value-chains and within sub-segments of each value-chain, indicated the report. Other challenges include uncertainty around sector sustainability, dismal labour productivity, especially in the informal sector, difficulty in accessing viable markets and cheap imports, which threaten locally manufactured products. The sector was the second largest contributor to Gross Domestic Product (GDP) in 2014 and formally employed 287,500 people. However, according to...

Nairobi, Kenya: The Ministry of Industrialization and Entreprise Development in partnership with World Bank and manufacturing sector stakeholders have today launched the Priority Manufacturing sector, value chain reports to stimulate Kenya’s economy. The reports show that the performance of the timber-furniture, textile-apparel, and leather and leather products value chains in Kenya are significant to the country’s job and wealth creation. The reports provide an updated and comprehensive analysis of competitiveness for these key manufacturing sectors in Kenya and offer suggestions strategies and policies to accelerate their growth and increase the productivity and innovation of Kenyan firms in them. According to Cabinet Sectary for Industrialization Adan Mohamed, the launch of the value chain reports provides is in tandem to the realization of Kenya’s Industrial Transformation Programme and Kenya’s Vision 2030. While Kenya has made some headway in the global apparel market, there is need to focus towards addressing bottlenecks to competitiveness – says the Apparel and Textile Industry report. With regard to the Apparel and Textile Industry report, Mr. Mohamed disclosed that subsequent to the renewal of AGOA for another 10 years, the textile-apparel sector remains the country’s growth engine for industrial exports. “We are uniquely positioned to grow and expand this sector more than ten-fold beyond the current market share of 0.4%. We intend to enter new markets and expand our product range into higher value and niche products,” said Mr. Mohamed. According to the Export Processing Zone (EPZ) Authority, Kenya’s AGOA exports, employment, and investment in the past four...

According to the 2013 Society for International Development report, The Future of Inequality in East Africa, gains from EAC integration could be hampered by the growing inequality gap in the region. Half of the population of the EAC, representing 71 million people, lives on $1.6 a day. There is evidence that women bear the brunt of poverty but their empowerment is a central precondition for poverty’s elimination. According to the World Trade Organisation, there is a strong correlation between increased international trade and increases in female employment in exports, connection to markets and often higher wages in export-oriented industries. Analyses of several countries have even argued that each country’s economic development is “as much female-led as it is export-led.” Supported by the Netherlands government, and presided over by Foreign Affairs Cabinet Secretary Amina Mohammed, TradeMark Africa on October 15 launched the $4.5 million “Women and Trade Programme’’ to run till December 2016, with a second five-year phase of an additional $10 million to commence in 2017. Targeting 25,000 women in its first phase, the programme’s goal is to increase incomes and improve livelihoods for women traders and women-owned enterprises by strengthening the enabling environment for women traders, facilitating the removal of the internal impediments to trade faced by women and proactively promoting the ‘’voice’’ and participation of women in export and trade in East Africa. In many countries in Africa, the majority of small farmers are women, producing crops such as maize, cassava, cotton and rice. These have enormous potential...

Nairobi, 21 October 2015: TradeMark Africa was today honoured with the Trade Facilitation Partner award during Kenya’s Tax Payers day. The event held in Nairobi was presided over by Kenya’s President H.E Uhuru Kenyatta. TradeMark was recognised for its partnership with the Government of Kenya in supporting projects that will lead to increased trade and enhance Kenya’s competitiveness regionally and globally. [caption id="attachment_10077" align="alignleft" width="600"] From Left; H.E President Uhuru Kenyatta, TMA Director General David Stanton, TMA –Kenya Country Director Dr. Chris Kiptoo and TMA Sr. Director Enhanced Trade Environment[/caption] TMA partners with all EAC states to lay the foundations for increasing prosperity by dismantling bureaucratic barriers to economic integration. Additionally, it partners with other public institutions, and private sector to unlock wealth potential that integration holds. In Kenya, TMA is partnering with the government through its various institutions such as Kenya Ports Authority (KPA) and Kenya Revenue Authority (KRA). Reacting to the award, TMA Kenya Country Director Dr. Chris Kiptoo said, “This award serves as further proof of TMA’s commitment to building lasting partnerships with the Government of Kenya and supporting it to mainstream its revenue collection and generation efforts. We are grateful to contribute to a more prosperous Kenya where cost of business is low, innovation can thrive and entrepreneurs can enjoy simpler processes. Ultimately, our goal is a wealthier Kenya.” TMA has set aside a grant of USD 13 million to support KRA to purchase and install a new integrated customs management system. To complement these efforts,...

Women, who form a key part of informal trade in East Africa, will benefit from a programme to equip them with knowledge in customs and trade procedures as well as boost their revenue. The $4.5 million scheme by TradeMark Africa (TMA) will involve women traders from Kenya, Uganda, Rwanda, Burundi, Tanzania and South Sudan and run for about a year. “These efforts will enable women traders to overcome key challenges including access to market and trading information, understanding of customs and immigration requirements, compliance with standards, business development skills and access to finance,” Lisa Karanja, senior director for business competitiveness at TMA said. “Additionally, TMA will continue to strengthen women traders’ associations, groups and cooperatives to enable them to effectively engage with policymakers at national and local level, access group loans and engage in collective marketing.” TMA seeks to significantly contribute to women traders’ knowledge on EAC trade and export procedures by December 2016 in partnership with local organisations that will implement the programme. “Targets include a 10 per cent average increase in revenues of the targeted women exporters and traders, a 30 per cent increase in the use of formal trade channels and systems by the women cross-border traders and the adoption of policies, regulations or practices that support an enabling environment for women,” the agency said. A second five-year phase is envisaged for 2017 with a $15 million budget committed to the effort. “Empowering women creates a positive multiplier effect on poverty reduction, economic growth, government revenues and...

Tea grower Eastern Produce Kenya was Wednesday named the overall winner of the 2015 Taxpayers Awards hosted by the Kenya Revenue Authority (KRA). Eastern Produce was also ranked as the company with the best corporation tax yield for large firms — a measure of income tax paid for every shilling earned. The ranking by the KRA is a departure from past years when the award was based on the total amount of tax paid. The awards ceremony, attended by President Uhuru Kenyatta, was held at the Kenyatta International Convention Centre in Nairobi. The previous award system placed corporate heavyweights like Safaricom andEABL and the Teachers Service Commission at the top. Eastern Produce operates five tea factories and seven estates and manages two client factories with three large associated estates in the Nandi Hills region. It also takes in green leaf from 7,500 smallholders. Eastern Produce Kenya is part of a larger company —Eastern Produce — that also operates Malawi and South Africa. CfC Stanbic bagged the award for best value added tax (VAT) yield. The company recorded the highest VAT paid for every shilling of turnover. “The achievement is commendable given that the financial services sector is not a major generator of VAT with the bulk of services being tax exempt,” the KRA said in a statement. Basco Products received an award for the best growth of corporation tax compared to the previous year. The best corporation tax yield company in the small and medium enterprise category was Better Globe Forestry...