The European Union Wednesday provided a grant of Sh1.4 billion to enhance quality assessment in institutions dealing with certification of exports. The money from the European Development Fund comes just weeks after Kenya was put on notice over possible trade restrictions on horticulture exports to the EU if it fails to reduce pesticide residue levels and harmful micro-organisms by end of September. The Standards and Market Access Programme (SMAP) was launched by an EU delegation and officials of the National Treasury and ministries of Industrialisation and Agriculture and Fisheries.
The objective is to enhance quality and compliance of standards for exports and local food market by providing testing equipment and setting up monitoring systems. Institutions that will share the money include Kenya Bureau of Standards, Kenya Plant Health Inspectorate Service and Veterinary department. The United Nations Industrial Development Organisation will educate farmers, processors and traders on sanitary, phytosanitary and commercial standards required. MONEY WILL BE RELEASED “SMAP will strengthen Kenya’s regulatory framework and capacity for certification of animal and plant-based products,” Agriculture Cabinet Secretary Felix Koskei said at Serena Hotel, Nairobi. Kebs will get Sh365 million, out of which Sh250 million will go to purchasing equipment for the testing laboratories and the rest to training staff. The managing director, Mr Charles Ongwae, said the money will be released within a week and the tendering process is about to start. The remaining cash will be shared between Kephis and the veterinary department. The country has been under the EU radar for three...

ARUSHA, Tanzania - Relations between India and the East African Community are set to be revitalized especially in the areas of trade, cultural exchange and development cooperation.  India’s High Commissioner to Tanzania and Representative to the EAC, Mr. Sandeep Arya, said his country was keen on strengthening trade and cultural ties with the EAC which date back several centuries. Mr. Arya said India already had bilateral projects in most of the EAC Partner States particularly health and agriculture, adding that they wanted to partner with the EAC to boost trade volumes and promoting industrial growth in East Africa. Mr. Arya said he would work closely with the Confederation of Indian Industries and the Indian Exim Bank in these initiatives, noting that these partnerships should for a start be between these two institutions and the East African Development Bank and the East African Business Council. Mr. Arya was speaking after presenting his credentials to the EAC Secretary General, Amb. Dr. Richard Sezibera, at the EAC Secretariat in Arusha, Tanzania. Dr. Sezibera thanked India for its support to the Partner States singling out the scholarships granted to students from the Partner States to study in India. Dr. Sezibera also cited the support granted to the Community by India in the preparation of the East African Railways Master Plan the implementation of which he said would revolutionize the transport sector in the region. He disclosed that  one of the challenges faced by the EAC in relation to the free movement of goods across...

The cost of importing goods into the East African Community through the Single Customs Territory (SCT) will go down under a new, reduced import insurance rate. Under the amended EAC Customs Management Act 2010, all partner states will charge a cost insurance freight rate of one per cent on all imported goods under SCT, down from the initial 1.5 per cent and above. “For purposes of computing the Customs value, where no insurance is ascertainable, the price paid is to be increased by the national charge for insurance, which should be taken as 1 per cent of CIF for imported goods,” said the EAC ministers. The EAC partner states charge different import declaration fees. In Kenya, it is 2.25 per cent of the CIF value; in Rwanda it is 5 per cent and Uganda 6 per cent. The East African Legislative Assembly recently adopted an amendment to the EAC Customs Management Act that will enable persons intending to import goods to write to the commissioner for advance rulings on either tariff classification, rules of origin or Customs valuation. In the past, EAC importers and revenue authorities have disagreed on the tariff code under which an item should be classified and the Customs value that an item should be accorded. Import insurance rate “The Customs valuation should be based on the actual price of the goods being imported, which is indicated on the invoice, especially on goods like cars,” said Kenya Shippers Council chief executive Gilbert Langat. Mr Langat said that...

East African Community members have pulled out of a proposed regional power sharing pool to avoid duplicating the intentions of a bigger initiative. The five EAC countries have since 2003 been interconnecting their power lines to improve supply, stabilise access and foster trading in electricity across national borders. The EAC’s senior energy officer Peter Kinuthia said the EAC member states also belonged to the wider Eastern Africa Power Pool (EAPP) under which the EAC Power Pool falls. EAPP is meant to link up nine countries by 2018. The overlap would not make investment sense as member states are required to contribute to each initiative. This means that the five countries will have their power lines connected to the larger power pool, whose headquarters will be in Addis Ababa. Four other countries —Egypt, Ethiopia, Democratic Republic of Congo and Sudan — are members of the wider pool. Mr Kinuthia said the experience of EAPP has shown that contributions from member states and member utilities are not sufficient to cover the recurrent and development budget.  As a result, resources have to be mobilised from development partners. EACPP would face a similar scenario; besides, it would be approaching the same development partners currently supporting EAPP. Under the Tripartite Free Trade arrangement, a regional power market linking EAPP and the Southern Africa Power Pool (SAPP) is envisaged. It is estimated that about a quarter of electricity generated in EAPP countries comes from hydropower with future investments creating a greater dependence on the resource. “Linking up...

The construction of the standard gauge railway in Kenya is ahead of schedule, and the country has signed another commitment for the construction of the Nairobi-Naivasha extension. The 120km extension will link Nairobi and Mombasa to special industrial zones to be established in Naivasha —where the Olkaria geothermal power plants are located. Last week, Kenya signed a commercial contract for the construction of Phase 2A of the Nairobi-Naivasha SGR. The agreement was signed by China Road and Bridge Corporation (CRBR) chairman Wen Gang and Kenya Railways managing director Atanas Maina and witnessed by President Uhuru Kenyatta. Locomotives for the first phase have docked at the Mombasa port and set off to the sites. Work should start in less than two months. According to Mr Maina, the implementation of civil works for the SGR was at 49 per cent at the start of September while more than 400km of the railway corridor had been constructed. CRBC said that the laying of the track between Nairobi and Mombasa will begin in November. According to Julius Li, China Road’s manager for external relations and co-operation, laying of the rail-track along the whole line will commence in November. “We will have the first phase start from Mtito Andei towards Mombasa, which will cover the Tsavo area, while the second phase will run from Emali all the way to Nairobi. Laying of the tracks will run concurrently,” said Mr Li. Currently, construction of bridges, culverts and drainage at most stations is almost complete, together with...

Kenya has introduced special incentives to attract more investments to the country, but they could sound the death knell for export processing zones. Investors have expressed concern over controlled market access and the creation of special economic zones, whose investors will enjoy unlimited access to local and international markets. Kenya plans to set up the special economic zones in key urban areas as part of its Vision 2030 goal to diversify manufacturing activities and create employment. President Uhuru Kenyatta has signed into law the Finance Bill 2015, which spells out key measures to revamp activities in the special economic zones. The zones are currently undergoing a pilot programme in Mombasa, Lamu and Kisumu. Through the Act, the government exempted all supplies of goods and services to companies and developers in special economic zones from VAT and reduced the corporate tax rate for enterprises, developers and operators to 10 per cent for the first 10 years and 15 per cent for the next 10 years. Kenya also retained 150 per cent investment deduction allowance  for investments of Ksh200 million ($1.86 million) or more outside the cities of Nairobi, Mombasa and Kisumu, which had been abolished by the Cabinet Secretary for the National Treasury Henry Rotich in the 2015/2016 budget. The business community expressed fears that investors at the EPZ would pull out due to what they say is skewed treatment by the government. Investors at EPZs are entitled to, among other things, a 10 year-corporate tax holiday and 25 per cent tax thereafter; a 10-year withholding tax holiday, stamp duty exemption, 100 per...

Manufacturers have accused counties of erecting numerous non-tariff barriers, which have curtailed free movement of goods in the country. Kenya Association of Manufacturers (KAM) Chief Executive Officer Phyllis Wakiaga said the numerous levies and requests by county governments have amounted to double taxation. Ms Wakiaga was speaking on Thursday when KAM and TradeMark Africa (TMA) signed the second phase of a partnership started two years ago. The objective of the partnership is to create a better business environment for manufacturers and enhance the sector's competitiveness in the region. TMA gave about Sh400 million for the initiative. "Now, when you try and move your truck and you have advertising, most of the county governments will require you to pay advertising fees across the country," said Ms Wakiaga. This has resulted in some manufacturers removing their branding from their vehicles, she added. Regionally, non-tariff barriers have been responsible for the decline of the East African market, noted Ms Wakiaga. She said certain regional bodies and counties have requested further certification on certain products once the goods arrive in their counties. This is even when the products are certified and standards confirmed by the Kenya Bureau of Standards. Besides non-tariff barriers, the second phase of the partnership would also zero-in on trade in counterfeits, harmonisation of standards within the East African Market, and accessibility and centralisation of information. Ms Wakiaga noted that in 2013 EAC countries lost close to $400 million (Sh42 billion). The counterfeits and sub-standard goods also stole about 70 percent...

Kenya’s umbrella manufacturers body has signed an agreement with a regional body formed to help East African states speed up integration, create better business environment and enhance the sector’s competitiveness in the region. The Kenya Association of Manufacturers (KAM) and TradeMark Africa (TMA) said in Nairobi the two-year agreement will see an extension of a financial grant to KAM for supporting its advocacy work in the area of non tariff barriers, standards and counterfeits. "We are looking into implementing advocacy campaigns, especially related to non-tariff barriers, trade in counterfeits, anomalies in the common external tarrif (CET) and access to trade and market information," said TMA Kenya Country Director Chris Kiptoo. Kiptoo said the partnership aims to support KAM’s policy and advocacy work as well as engagement with the relevant authorities in a bid to address the challenges facing the industry in the region. He pointed out that the first phase of the project focused on building and evidence base for advocacy in the key priority areas identified by KAM, which include tax reforms in Kenya, cost of quality compliance, domestic non-tariff barriers affecting industry in Kenya, constitutional issues affecting business, overlapping regulatory roles and the severity of counterfeits. "TMA’s keenness to support KAM has carved out a productive space for advocacy and engagement with the necessary sections of the government," said KAM CEO Phyllis Wakiaga. "Our manufacturing sector has remained stagnant at 11 percent of GDP over the past ten years. As a result, the number of formal jobs in...

Honorable British High Commissioner to Kenya, Dr Christian Turner gave a speech at Strathmore University on 10th Anniversary of Fairtrade Africa. The speech has been provided below – “Distinguished guests, ladies and gentlemen… I am pleased to join you on this day as we celebrate the achievements of Fairtrade Africa over the last ten years. Fairtrade Africa plays a crucial role in helping to improve the lives of poor people in a sustainable way, by ensuring farmers receive fair prices for their products and workers receive better wages to help them support their families. My core proposition today is that growth must be sustainable and inclusive. Fairtrade Africa is a model of that. First, some background on the UK angle to this: the UK is the largest contributor to the Fairtrade movement, having contributed around £18m (approximately Ksh 2.9 billion) over 7 years through DFID’s economic development programme, and working with Fairtrade since the outset to build markets for the poor and the marginalised. Fairtrade in turn has reached over 7m smallholders, workers and businesses, 2/3 of which were in Africa; of which 25% were women. We are also proud that so many top UK retailers have bought into the model – Marks and Spencer, ASDA, Sainsbury’s – to name but a few… It speaks to the success of the brand that almost all major UK retail outlets now have Fairtrade products on their shelves. Here in Kenya, Fairtrade Africa has played an important role in protecting workers from exploitation and...

Kenya has secured commitments amounting to billions of shillings from American companies to increase power production and finance infrastructure projects. Some of these projects have already been initiated. President Uhuru Kenyatta said the commitments were secured during a morning meeting with the American companies under the umbrella Business Council for International Understanding (BCIU). He said Africa was the continent in focus for investors and Kenya must use its potential in clean energy and infrastructure to grow its economy. One of the US companies committed to invest an estimated Sh400 billion ($4 billion) in Kenya for power generation. “One company in particular doubled its commitment to invest in solar power in Kenya over a period of time, developing up to about 2,000 megawatts of power at a cost of approximately $4 billion. AN INVESTMENT RESORT
The BCIU is a group of companies that facilitates mutually-beneficial, person-to-person relations between business and government leaders worldwide. They facilitate financial investment and advise governments on how to utilise their potential to spur economic development. Industrialisation Cabinet Secretary Aden Mohammed, who attended the meeting at the high-end Waldorf-Astoria Hotel in New York, said Kenya was marketing herself as the destination for investment and trade on the continent. “This was a gathering of business and government leaders. It was an interactive session where the companies asked questions on what has been the spectrum of doing business with Kenya,” he said. He said the government explained steps it has taken to aid investment in Kenya including the enactment of...