Kenya and South Africa have faced diplomatic tensions due to strict visa regulations; however the recent launch of the Kenya/South Africa joint business council is seen as a step towards enabling relations between the two countries. “The relationship has been there but [the] business partnership has not been very strong,” says Laban Onditi, vice- national chairman at the Kenya National Chambers of Commerce and Industry. He elaborates that the chamber will give Kenyan and South African business people access to each other. Onditi added: “The role of the chamber is to enhance investment and trade, and where the difficulties come is because of the trade barrier, that is where the governments come in, the main core issues of the business council are to address barriers existing in the business community.” For instance South Africa had only been issuing visas for one month single entry and according to Onditi that was not conducive for a business environment hence that was discussed when the agreement was signed. “From now on, South Africa will be issuing one year double entry to three years, depending on the potential of businesses that are carrying on within; this is going to open the continuous movement of people.” The vice-national chairman is pleased with how the visa issue was resolved and how this will allow for faster movement of parcels and goods as anybody who is doing potential business in South Africa can now go to the Kenyan chamber and get a recommendation where the individual will...

Cargo importers have raised the alarm as additional costs due to delays in solving tax disputes erode gains accruing from reforms at Mombasa port. It takes more than two weeks for the customs officers to clear goods at the port as they await directive from their seniors in Nairobi, according to port users. “As this happens, storage costs continue to go up. A case in point is the loose cargo where Customs officers can never make a decision on the spot,” said Keynote Logistics managing director William Ojonyo. The delays imply a rise in warehousing costs even as time set for clearing goods at the port remains constant at four days. This shortcoming defies a charter signed by regulatory agencies on Northern Corridor to improve efficiency of the route. The main agenda of the Mombasa Port Community Charter, endorsed by President Uhuru Kenyatta was to eliminate cargo delays at the port by 2016. READ: Agencies pledge to speed up cargo clearance at Mombasa port The signatories of the pact signed in June 2014 were drawn from government agencies, civil society, private sector and interest groups. Mr Ojonyo proposes that setting specific timelines for handling tax disputes could help in improving efficiency at the port. “This will attract lower costs for doing business thereby making cargo handlers more competitive in the market,” he said. The charter, is a binding pact aimed at improving efficiency at the Mombasa was signed by 25 agencies. The signatories of the pact include the Kenya Revenue...

Dicksons Kateshumbwa, Commissioner of Customs at Uganda Revenue Authority, said consignments of sugar cleared in Mombasa for warehousing in Uganda are now handled under the Single Customs Territory (SCT) arrangement — which allows for joint collection of customs taxes by the East African Community (EAC) partners. Uganda has also added containerised refined edible oil, second-hand clothes and shoes as well as alcoholic and non-alcoholic drinks for clearance under the seamless tax system. “In addition, SCT clearance procedures will also be extended to containerised cargo of the following products; bitumen, cement, steel and steel products with effect from September 7, 2015” Kateshumbwa further said in a notice to traders. Under the SCT deal that began in 2014, importers of commodities are required to lodge the import declaration forms in their home country and pay relevant taxes first to facilitate the export process. The tax authorities in the respective countries would then issue a road manifest against the import documents submitted electronically by the revenue authority of the importing country. READ: Kenya, Tanzania add more goods to joint taxation pact ALSO READ: How cargo clearance will change from July 1 Clearing agents within EAC have been granted rights to relocate and carry out their duties in any of the partner states as part of a strategy to improve flow of goods and curb dumping. Several commodities including petroleum, steel, edible oils, confectionery and milk are currently traded between Kenya, Uganda and Rwanda under the SCT platform. Cement, cigarettes and neutral spirit were...

East Africa is the fastest growing sub-region on the continent, with economic growth expected to expand by 5.6% this year, well above the continental average of 4.5% or Southern Africa’s 3.1%. But in an odd contradiction to regional growth trends, East Africa’s infrastructure is one of the least developed in Africa. Infrastructure development is thus paramount for the sub-region to reach its full potential and many ‘mega’ infrastructure projects are currently under way in the region. By LYAL WHITE and ADRIAN KITIMBO. Kenya’s standard gauge railway (SGR), a new rail track that will stretch from Mombasa to Nairobi, is the most ambitious infrastructure project in the country since independence. The 609km-long line is expected to cost $3.6-billion, with China’s Exim Bank footing 90% of the bill and the Kenyan government providing the other 10%. The SGR is part of the grand trans East African railway project, one of many ‘mega’ infrastructure projects currently under way in that region. It is a direct effort to connect East Africans and their economies, and in so doing build economies of scale, lower the cost of doing business, attract foreign investment and ultimately accelerate growth and development. East Africa is currently the fastest growing sub-region on the continent. With economic growth expected to expand by 5.6% this year, well above the continental average of 4.5% or Southern Africa’s 3.1%, investors and credit rating agencies are increasingly bullish about the region. In an odd contradiction to regional growth trends, East Africa’s infrastructure is one of...

At the beginning of this month, businessmen, policy makers and other economic stakeholders from within East Africa and across the globe convened at the Speke Resort Munyonyo in Kampala for the first ever high-level Manufacturing Business Summit and Exhibition in the East African Community. The fact that the forum was held at Speke resort, with its colonial undertones and heritage, reflects the fact that Africa is still grappling with the legacy of colonialism, especially the effects of national boundaries arbitrarily drawn up so many years ago in Europe, without recourse to local culture or historical affiliations. It also illustrates how these boundaries continue to affect the economics, trade, immigration and geopolitics of these former colonies. How so? For many nations in Africa today, it is easier to trade with Europe, America or China than it is to trade across what for many is an imaginary line in the sand denoting two different countries. Yet there are individuals and companies grappling with how to extend their business beyond borders, setting precedents for those wishing to realise the pan-African dream. The timing of the forum was also apt, coming at a time when many companies have embarked on regional expansion programmes that will see them grow their footprint across the East African market of more than143.5 million people. This ability to operate across borders is important. Cross-border trade within the region brings in economies of scale and enables research and development for a bigger market. According to experts, including the World Bank,...

The East African Community is pushing for a long-term preferential trade agreement with the United States that will remove uncertainties surrounding the Africa Growth and Opportunity Act (Agoa). The five member states have submitted their request to the United States Trade Representative (USTR) on the modalities and the time to start negotiations on the pact. According to EAC Director General of Customs and Trade Peter Kiguta, the USTR is expected to present the request at the next US Congress meeting. If accepted, the region expects to increase the volume of trade and the number of products exported to the US. “For EAC partner states to expand their trade partnership with the US market, there has to be a reciprocal free trade agreement like the one with the European Union,” said Mr Kiguta. READ: Region to export products under Agoa as a bloc “The challenge with Agoa is that it is unilateral; it can be withdrawn any time and the 10-year period is very short and limiting for trade. So we need to have a long-term trade partnership that is more predictable,” he added. Peter Njoroge, the director of economics at Kenya’s Ministry of EAC Affairs, Commerce and Tourism, said that the East African countries have not been able to fully utilise the US quota-free market under Agoa because the agreement does not comply with the World Trade Organisation’s framework for free trade agreements because of its 10-year period of operations.  With a preferential trade partnership like the EAC-EU Economic Partnership Agreement (EPA), Mr Kiguta said member states will be...

Uganda has received the support of the East African Community Secretariat in its sugar and rice trade disputes with Kenya and Tanzania respectively. The Secretariat said the disputes go against the spirit of integration and free movement of goods and services in the region. According to the EAC, by requiring Ugandan traders to have permits to export sugar to Kenya, the country is imposing a non-tariff barrier, contrary to the EAC Treaty. “Sugar exports to the EAC partner states are duty-free and quota-free under the EAC Customs Union if wholly obtained from the partner states. This means that as long as the sugar is locally produced in Uganda the traders can sell it in Kenya or in any of the other partner states without having to be issued with permits or licences,” said Peter Kiguta, EAC Director-General in charge of Customs and Trade.  The EAC Secretariat’s position highlights the contradiction of one country having dual membership of different trading blocs. Kenya and Uganda are members of the Common Market for Eastern and Southern Africa (Comesa), under which permits and quotas — forms of non-tariff barriers for sensitive goods like sugar — are allowed in order to protect industries in member countries.   However, under the EAC, such products only attract punitive import duties ranging from 100 per cent to 35 per cent if they are imported from outside the region and sold to partner states — meaning the bloc relies solely on tariffs to protect domestic industries. In the 2015/2016...

International trade has grown rapidly in recent years, thanks to the progressive reduction of tariffs and quotas through multilateral trade liberalisation. More trade means more goods crossing borders and having to comply with Customs formalities. Businesses suffer both direct border-related costs, such as expenses related to supplying information and documents to the relevant authority, and indirect costs, such as those arising from procedural delays, lost business opportunities and lack of predictability in the regulations. Surveys aimed at calculating these costs suggest that they may range from 2 per cent to 15 per cent of the value of traded goods in developed countries and upto between 30 per cent and 42 per cent in production costs in developing countries. Inefficient border procedures cost governments in terms of lost revenue, smuggling and difficulties in implementing trade policy, for instance because of difficulties in determining the origin of products or in collecting accurate statistics. With increasing integration of economies around the world, facilitating the smooth flow of trade becomes a pressing requirement for governments and businesses. Efficient information systems and procedures can significantly reduce the time taken to move goods, reduce costs and improve business. In Kenya, trade facilitation is carried out by a number of institutions. The roles of the trade facilitating agencies range from revenue collection, provision of services for cargo movement and ensuring that goods conform to the set standards and health regulations, efficiency and enhance the overall economic performance of a country. The overall objective of the Kenya Electronic...

The gap between exports and imports widened in the year to May as Kenya bought more goods from abroad to further expose the local currency. According to newly released Treasury data, the gap — also called the current account deficit — increased by 22.7 per cent to Sh623.2 billion (or $5.99 billion). This amounted to an actual expansion of the deficit by Sh115.4 billion (or $1.11 billion). The deficit has eroded the value of the shilling, which has fallen a notch lower every month this year, meaning it is 13.5 per cent weaker compared to the beginning of the year. This happened as the current account deficit progressively deteriorated. “The current account deficit worsened by 22.7 per cent to $5.992 billion in the year to May 2015 from a deficit of $4.882 billion in the year to May 2014,” said the Treasury. It added that as “a share to GDP, current account deficit amounted to 9.8 per cent from 8.9 per cent over the same period”. The export-import gap was caused by falling export values affecting crops such as tea, re-exports and manufactured goods. The data shows value of exported tea fell by 4.6 per cent or Sh5.3 billion ($51 million) in the period to stand at Sh110.4 billion. The value of manufactured goods also slumped by 22 per cent or Sh15.5 billion ($149 million) in the same period to hit Sh54.9 billion ($528 million). The value of chemicals and related products that were exported also fell by Sh3.6 billion...

KENYA is ready to host the World Trade Organisation's Ministerial Conference and there are no difference in government over the meeting. Foreign Affairs and International Trade Cabinet Secretary Amina Mohammed has reassured that all is set for the four-day conference from December 15 to 18. Kenya has set up the National Negotiations Committee to help Kenya
reach trade deals during the December conference, said Mohammed, who has been
chosen the chair of the meeting, branded MC10 Nairobi
2015. She said the negotiations are expected to end negotiations before
November, paving way for a common position with increasing global market access for agricultural produce a key priority. As of last year, intra trade among EU nations stood at 60 per cent, in Asia
its 40 per cent and the Americas is 20 per cent while in Africa it is a mere 6 per cent. Priority for Kenya during the conference is
ensuring that Kenya gets wider market access for its agricultural
produce such as tea, coffee, and horticulture. Kenya will also be pushing for liberalisation of
services which will allow for the free movement of professionals
across borders. Mohammed said her ministry is leading the preparations and all logistics are in place. "There are no differences between my ministry and any other. This is an important meeting for Kenya to host and we are prepared," she said. She added the meeting was important for Kenya's trade and tourism and should be supported by everyone who wants to see progress in the growth and development of the country. "My ministry has...