Kigali — Reflecting efforts to boost intra-regional trade and investment, 26 African countries have recently agreed to establish a Tripartite Free Trade Area (TFTA) by January 2016. The TFTA agreement comprises the East African Community (EAC), the Common Market for Eastern and Southern Africa (COMESA), and the Southern African Development Community (SADC). With a total population of 638 million people and a total Gross Domestic Product (GDP) of USD 1.2 trillion, the TFTA will create Africa's largest free trade area. In one of the first papers to quantify the potential benefits from the TFTA, UNECA economists Andrew Mold and Rodgers Mukwaya suggest the TFTA could boost intra-regional trade by USD 8.5 billion. Particularly interesting is the fact that the economic sectors most likely to benefit are the industrial sectors - such as processed foods, light manufacturing and heavy manufacturing, providing an important impulse to regional industrialisation. The authors also speculate that, if the elimination of tariffs is accompanied by measures to remove non-tariff barriers and infrastructural deficits, the potential gains could be much larger. The TFTA is estimated to increase regional welfare by US$2.4 billion, with South African consumers being among the main beneficiaries. Other principal beneficiaries include Angola, D.R. Congo, Tanzania and Egypt. The paper also addresses concerns that industrial production in the TFTA may concentrate in the countries with the highest productivity levels - namely, Egypt and South Africa. The simulation results suggest that these fears are exaggerated, with little evidence of concentration of industries in the larger...

Ethiopia on Thursday unveiled an online platform that will help farmers to play a role in the determination of prices for their products. The Ethiopia Commodity Exchange (ECX) officially inaugurated the eTRADE Platform, which has been under construction for the past two years. "for farmers, this modernisation will be life-changing" ECX says 2,390 metric tonnes of farm produce has been traded on the platform with a trade value of ETB 120million or about $5.7 million. The launch of eTRADE would enable market players to trade electronically from anywhere. Initial trading would take place at the ECX HQ Trading Center before it is gradually rolled out to the newly built regional trading centers in regional cities. ECX chief executive officer Ermias Eshetu said "the inauguration of this eTRADE platform sets a new course for Ethiopia and brings with it unparalleled economic and social benefits". "The platform inevitably breaks the physical and time barrier of the current Open-Out-Cry trading platform and provides the ECX with vital economies-of-scale to trade a number of additional new commodities," he added. The project followed collaboration with the Investment Climate Facility for Africa (ICF) and other partners. ICF chief executive officer William Asiko said the platform would revolutionarise Ethiopia's agriculture sector. "The modernisation of ECX will help to improve the business environment for stakeholders involved in the commodities sector and give Ethiopian agricultural products a competitive advantage," he said. "But for farmers, this modernisation will be life-changing." It will enable farmers to get better pricing for their...

MOMBASA, KENYA: Traders at the port of Mombasa are enjoying a freight cost saving windfall following recent measures by the Kenya Ports Authority (KPA) to make the port of Mombasa efficient. They say the cost of freight has dropped by a half compared to ten years ago following the modernization of cargo handling facilities and expansion projects at the port. "The cost of freight has dropped drastically in the last ten years. We used to pay an average of Sh450, 000 to transport a 40ft container from Europe to Mombasa but currently it costs Sh250,000. "A 40 foot container of tea from Mombasa to Karachi cost $1,000 but currently it costs Sh45000 or Sh40000," said Shipping Lines representative, Kenya Ships Agents Executive Officer,” Mr. Juma Tellah. He said that efficiency at the port had improved leading to fast offloading and loading of cargo and drop in the time importers use to clear their cargo at the facility. In June 8, this year, KPA introduced a new system for ships offloading cargo at the port called "fixed berth window" at the port of Mombasa. Under the new plan, ships docks at the port as per agreed schedules thus reducing the time taken to offload cargo from the ship. The government says it was mobilizing Sh44 billion from development partners for the development and modernisation of port. The modernisation and expansion projects, according to President Uhuru Kenyatta would make the port efficient. Source: Standard Digital

The collapse of the first East African Community in 1977 killed a dream that had taken more than 15 years to actualize. The breakup of the bloc which was formed in 1967 was occasioned by differing political and economic ideologies. That was then. Today the world is witnessing the re-emergence of the EAC driven by the Kenya and Tanzania who were blamed for the collapse of the original bloc. But can the two nations succeed where they failed in the past. From the start, the first East African Community was meant to fail, it was not sculptured to adapt to the changing trends. It is said that the EAC bloc was formed to counter the influence of colonialists who were not ceding power after years of dominance. After independence individual countries got busy consolidating power, giving affairs of the bloc less prominence. The then President for Kenya Mzee Jomo Kenyatta was intent on making sure that the country stuck to capitalism. Tanzania on the other hand championed for Ujamaa, a major African socialist policy. A clash of ideologies was imminent. 1977 the EAC was dissolved and Kenya and Tanzania ended diplomatic ties only to re-establish them in 1983. The next 23 years, Kenya, Uganda and Tanzania would try to revive the bloc. In July 2000, Tanzania and Kenya along with Uganda reestablished the EAC. However, the Kenya and Tanzania tension lingered on even with the new bloc. According to policy analyst Dr. Kerret Mutua, the differences between the two countries...

LAST Sunday, President Jakaya Kikwete and his Kenyan counterpart, President Uhuru Kenyatta, launched the construction of a 90 kilometre Mwatate-Taveta Road in Kenya that will link with Arusha-Taveta to connect the central and northern transport corridors in East Africa. The launching ceremony marked the beginning of the African Development Bank (AfDB) funded grand road project in the East African region, which is expected to boost trade and spur growth and prosperity in the region. In Tanzania, we are also expecting launching construction works for the Arusha-Taveta stretch soon. The stretch will involve a four-lane dual carriageway which will connect Arusha City with Holili-Taveta through Moshi Municipality and Himo Township. The project is also expected to involve the so-called Arusha-bypass. The main objective of connecting the two transport corridors is to enhance interconnectivity in transport in the region through infrastructure development and trade facilitation. The modernisation of this transport infrastructure is crucial for both national and regional road traffic and sustains economic growth in the area, trade expansion and investment, which are also vital to develop and support a dynamic and robust private sector. We would therefore like to commend the two leaders for their commitment to make sure the dream to connect the two transport corridors is realised so as to improve trade and boost growth in the region. In East Africa, the Northern and Central Transport Corridors connect the people of Burundi, Kenya, Rwanda, Tanzania and Uganda. These corridors also provide port access to the people of the Democratic...

The construction of the free trade zone (FTZ) at Dongo Kundu Mombasa will start next year, targeting regional trade. “Ground breaking for the Dongo Kundu free economic zone is set for early next year” the Industrialisation ministry said in an update yesterday. The FTZ project will be established on a site of between 300-500 acres of land that is available to investors. It will host wholesale and retail trading, breaking bulk, re-packaging logistics, warehousing and handling and storage of goods among others. Unlike the current practice at Mombasa port where all goods are subjected to slow customs procedure, an FTZ creates a haven where goods on transit face less strict customs regulations. The area will be reserved for re-exports to the 400 million-people Common Market for Eastern and Southern African (Comesa), allowing for transshipment of cargo without inspection or paying customs duty. The Comesa bloc is already the single-largest export destination for Kenya’s goods accounting for 35 per cent of Sh517.9 billion worth of goods exported in 2012. “The FTZ is a proven development model which attracts foreign and domestic investors, stimulates local, regional and international trade, improves a country’s business climate and reduces cost of doing business,” Industrialisation principal secretary Wilson Songa told the Business Daily in a previous interview. Globally, FTZs are organised around major seaports, international airports and generally underdeveloped areas. Marginalised areas are often targeted for the FTZs because they attract investments which help address poverty. As a sweetener, corporations setting up in the zone may...

At least 107 states are set to open up customs and port procedures by the end of this year, easing cross-border movement of goods across the world. The states are expected to sign the Trade Facilitation Agreement (TFA) in Nairobi by December 18 during the World Trade Organisation’s first ministerial conference in Africa. “The TFA can make sure that trade really works. This is why it is so important to put it into effect as soon as possible. The ratification and entry into force of the TFA must be high on every WTO member’s agenda,” said Foreign Affairs and International Trade secretary Amina Mohamed who will chair the December global event. Under the TFA protocol, each signatory will have to publish procedures and documentation required for importation, exportation, and transit via port, airport, and border points. They must also provide shippers with details of tax, regulatory fees, rules for the classification or valuation of products for customs purposes, rules of origin, penalties, procedures for appeal and trade restrictions. “Each member (signatory) shall adopt or maintain procedures allowing for the submission of import documentation and other required information, including manifests, in order to begin processing prior to the arrival of goods with a view to expediting the release of goods upon arrival,” the TFA reads in part. The TFA protocol is one of the proposals that the trade ministers agreed on at the Bali Conference held two years ago. It is supposed to enter into force once two-thirds of the WTO’s...

KENYA
 has been accused of dragging its feet in completing a one stop border post at Namanga which has slowed down trade with its Tanzania neighbour. According
to the East African Legislative Assembly, Kenya is lagging behind in
construction of the OSBP, affecting implementation of the EAC treaty on cross
border movement of goods, persons and services. In
a statement released after a tour of various entry points in the region, the East African Community committee on communication, trade and investments said the delay forms a major non-tariff barrier to trade. The team was on a tour of OSBP's in the region, to assess the construction and
implementation of the projects. “Any
delay in the construction of the border facility would impact negatively on the
growth of trade and investments,” committee chairman Mbidde Mukasa (EALA
Uganda) said. He
said the business community and clearing agents have been inconvenienced by the
delay. “Namanga
Tanzania OSBP was completed a year ago and they were only waiting for the
Kenyan side to complete their facility to allow the sharing of staff,” the team said. Kenya Revenue Authority Namanga station manager Dishon Njuguna said the project was 80
per cent complete. According
to Njuguna, the project was delayed after the contractor declined to receive
his payments when he was penalised for breach of contract. “He
was supposed to have completed the construction of the facility by December
2013, but the contract terms were reviewed to June 2015, attracting the
penalties,” Njuguna said. He
said a slow land compensation process also contributed to the delay. The
committee toured other projects at Kenya-Tanzania entry points in Lunga
Lunga/Horo...

TRADE between Kenya and Tanzania has continued to grow, accounting for 80 to 90 per cent of trade in the East African Community (EAC), President Jakaya Kikwete has said. Addressing the Kenya’s National Assembly in the capital, Nairobi, President Kikwete said the growth in trade between the two countries demonstrated how much the two countries’ contribution is critical to the greater EAC integration agenda. “I am told trade between our two countries accounts for over 80 to 90 per cent of trade in the EAC market. This demonstrates in no uncertain terms how much our two countries are critical to the EAC integration agenda,’’ he told the attentive assembly. Mr Kikwete observed how important it was, therefore, for the two countries to forge closer and stronger cooperation in investments and trade, not only in their own best interest, but also in the best interest of the EAC. He added that what the two countries have accomplished was just a tip of the iceberg out of what they stand to achieve together. The Tanzanian leader noted that the two countries have developed strong bonds of cooperation, stressing that for Tanzania, “Kenya is not a competitor but a strategic partner’’. He said Kenya ranked fifth among top ten countries with the largest investments in Tanzania, after the United Kingdom (UK), United States of America (USA), China and India -- being the only leading African nation in the list followed by South Africa. According to the president, Kenya’s investments in Tanzania accounted for...

The World Bank has set a side Sh200 million to support improvement of investor friendly environment in counties across the country. The Banks’s Social Development Specialist Chris Finch, said the grant would soon be availed to the counties once all the necessary structures of engagement with the devolved units are complete. “The grants would mainly help improve financial management of the counties, human resource, enhance public participation and improve planning, monitoring and evaluation of projects and programmes in the counties,” said Mr Finch. He, however, observed that individual counties will have to apply and meet conditions for a slice of the grant which is under the bank’s Kenya Devolution Design Programme. Mr Finch made the remarks in Nairobi during a donor and investor roundtable for various development partners and Elgeyo-Marakwet County government. “These are capacity and performance grants to enable counties attract investments through the creation of investor friendly business environments,” said Mr Finch. National Treasury Cabinet Secretary Mr Henry Rotich who was the chief guest at the event lauded the World Bank support to the counties. “This assistance provides counties with better opportunities to design better governance structures that would spur development at the grassroots,” said Mr Rotich. However, he urged counties to come up with better property taxes and avoid over burdening investors through double taxation and exorbitant levies. Governor Alex Tolgos also welcomed the World Bank support noting that it was the reason the County was holding the roundtable to seek funds to bridge its development gaps....