Kenya and Australia are this year celebrating 50 years of bilateral relations. A number of Australian firms have either invested or expressed interest in key sectors of the Kenyan economy, including mining, education, healthcare and agribusiness. In October 2012, the Australian International Food Security Centre (AIFSC) opened an office in Nairobi to finance applied research for faster agricultural technology adoption across 10 countries in Eastern and Southern Africa. The two countries have also strengthened ties on security, counter-terrorism and piracy, mining exploration and education. The Business Daily’s Allan Odhiambo spoke with John Feakes, Australia’s High Commissioner to Kenya, on the state of Kenya-Australia relations and what lies ahead for the two countries. What is your assessment of Kenya’s socio-economic environment so far? I am very positive about Kenya’s progression because all the factors requisite for development are gradually being addressed. The country’s growth would have been quicker but the promise remains strong. Kenya’s human capital is particularly attractive, especially given the drive its young entrepreneurs have. The geographical placement also places the country in an advantageous position for growth because it’s the gateway to the region. The investment being made in infrastructure development is impressive and will pay dividend in future. What is the cornerstone of Australia’s ties with Kenya? The two nations are relatively young members of the Commonwealth and share a lot in terms of progression lessons. The melting point in our relations is the dynamism we both have to grow the private sector. We have a strong...

A platform to connect farmers to grain buyers in the region was launched in Nairobi, Kenya. The platform, dubbed G-Soko, was developed by a Kenyan-based IT firm Virtual City in partnership with the Eastern Africa Grain Council (EAGC) and the Food Trade Eastern and Southern Africa Organization. G-Soko, the online trading platform will now enable Smallholder farmers in the East Africa to sell their produce at favorable prices. Speaking at the launch of the platform, the Secretary General of the East African Community Amb. Dr. Richard Sezibera commended EAGC for partnering with the Secretariat to implement the EAC Food Security Action Plan, which is the EAC strategy to achieve food security in the region. The secretary general, who was represented by the Director for Productive Sectors Jean Baptiste Havugimana, also hailed the EAGC for the online initiative and pledged 'EAC continued support in automating agricultural crops trading systems and processes to reduce commercialisation cost and all related challenges and bridge the gap between farmers, traders and consumers for increased food security in the region.' Speaking at the same occasion, the Executive Director of EAGC Gerald Masila disclosed that G-Soko was part of a five-year trade enhancement and promotion programme in the region. He said linking rural food production zones in East Africa to urban consumption centres requires a well-functioning regional market and that by adhering to the system, farmers in the region will, among others, be able to access credit while waiting for prices to increase through pledging the electronic...

Barack Obama has called for an increase in intra-African trade alongside a renewed economic engagement with the United States, arguing that countries on the continent can do much more to build links with neighbouring states. "The biggest markets for your goods are often right next door. You don't have to just look overseas for growth, you can look internally... it shouldn't be harder for African countries to trade with each other than it is for you to trade with Europe and America," he said. Obama was delivering a keynote speech to the African Union in Addis Ababa, the first sitting US president to address the body since its foundation in 2001. The speech capped off a five-day trip to Kenya and Ethiopia. According to UN figures, the share of intra-African trade in Africa's total trade over the past decade was only about 11 per cent, compared to 70 per cent for Europe. In response, Obama said that the US would step up efforts to encourage regional integration, building on previous US assistance in modernizing customs and border crossings in the East African Community. The president also highlighted US efforts in battling corruption, tackling illicit capital flows and building power capacity on the continent. Obama praised African countries that have torn down barriers to investment, but argued that much more needs to be done to spark business growth on the continent. "In many places in Africa, it's still too hard to start a venture, still too hard to build a business,"...

A new bill against non-tariff barriers that is awaiting assent by the heads of state of East Africa will add legal strength to the push against trade barriers in the region. A new bill against non-tariff barriers that is awaiting assent by the heads of state of East Africa will add legal strength to the push against trade barriers in the region. According to Jim Kabeho a board member of the East African Business Council, the war against the non tariff barriers has always been left to consensus as opposed to strong legal support. Source: NTV

Direct flights to the US could lower freight costs by an estimated 20 per cent, cargo handlers have said, even as focus stays on the government to comply with the requisite security and safety standards that have delayed the resumption of the non-stop connection. The US Federal Aviation Authority is scheduled to perform a fresh audit on the Jomo Kenyatta International Airport (JKIA) in October after a previous review earlier this year failed to attain the minimum threshold of security and safety performance set by the American regulator. US President Barack Obama, during his visit to Nairobi last month, said there was no definite timeline for the resumption of direct flights between the two countries due to the ongoing audit. Kenya has been implementing a raft of recommendations by the US government to enhance security, among them separation of passenger arrival and departure terminals, clearing the flight path and fencing off the airport. Freighters said resumption of direct flights between the two countries would immensely boost trade through lower charges. “If the US allows Kenya’s bid to have direct flights then we will save up to 20 per cent on our cargo operation cost,” Astral Aviation chief executive officer Sunjeev Gadhia said. “The multiple connections make the trip longer and compromises on on-time performance as there may be connection delays and missed connections, while multiple handling in the hubs exposes the cargo to mishandling that may reduce or degrade the cargo quality,” Jared Oswago, the divisional manager at Siginon Aviation...

The 172-kilometre Ahero- Isebania highway is set for an upgrade, complete with new service roads at commercial centres along the corridor to help boost trade with Tanzania. The project traversing four counties - Migori, Kisii, Homa Bay and Kisumu- is expected to improve trade in the Lake Victoria basin. The African Development Bank (AfDB) and the government will fund the project, which is a major boost to traders in Kenya and Tanzania who have been struggling with the narrow and worn road. “The rehabilitation of the Isebania-Kisii-Ahero section of the Tanzania-Kenya-South Sudan Corridor will facilitate cross border movement of passengers and freight, and further enhance access to regional markets,” says the environmental and social study report. “The project road condition has deteriorated over the years due to increasing transit traffic on the road. Currently, the road carriageway width measures 4-5m wide, and increasingly is becoming a major constraint for the main economic activities within the Lake Victoria basin.” The report adds that traffic accidents have increased due to the narrow and heavily potholed road condition. Besides the improvement of the main road, the project will also entail upgrading 75km of feeder roads that connect to the highway. These include the Oyugis-Kendu Bay road (19.5km), Nyachenge-Tabaka-Ogembo road (15km), Sondu-Nyabondo road (6km), Oyugis-Gamba road (7km), Suneka-Rangwe road (18km), and Misambi-Ekerenyo road (11km). “The population of Lake Victoria Basin is over four million and up to two million people are directly served by the Isebania-Kisii-Ahero road and the associated feeder roads for their...

The US is proposing radical changes in Kenya’s port cargo handling procedures to help reduce illicit trade and lock out high-risk consignments. The US government wants Kenya to adopt the Cargo Targeting System (CTS) for cargo processing, the two nations said in a joint communiqué following the recent visit by President Barack Obama. The revelation came ahead of a visit to Washington by a senior Kenyan delegation to discuss best practices in port management. “In addition, the United States commits to work with the government of Kenya to explore the possibility of developing a CTS to receive electronic cargo manifest data from shipping lines to target high-risk shipments based on risk profiles,” the document released by the White House read in part. The CTS enables port and security authorities to access electronic cargo manifest data in advance and carry out assessment of risks and target high-risk consignments moving through the supply chain. This has a benefit to the international trade community by increasing supply chain visibility and security, promoting fair and effective revenue collection, reducing levels of illicit trade and allowing better allocation of resources. Of late, Kenya has been facing security threats from the Somalia militant group, Al-Shabaab, which has been blamed for recent attacks on civilians and security personnel. There has also been concern about the incessant trafficking of small arms, drugs and contraband sugar worth millions of shillings. International navies have recently nabbed large consignments of drugs off the Kenyan Coast, raising fears that the port of...

An online platform that is intended to connect farmers to grain buyers was launched in Nairobi, Kenya. The platform, which has been dubbed G-Soko, was developed by a Kenyan-based IT firm Virtual City in partnership with the Eastern Africa Grain Council (EAGC) and the Food Trade Eastern and Southern Africa Organisation. G-Soko is intended to enable Smallholder farmers in East Africa to sell their produce at favourable prices. Speaking at the launch of the platform, the Secretary General of the East African Community, Amb. Dr. Richard Sezibera commended EAGC for partnering with the Secretariat to implement the EAC Food Security Action Plan, which is the EAC strategy to achieve food security in the region. The Secretary General, who was represented by the Director for Productive Sectors Mr. Jean Baptiste Havugimana, also hailed the EAGC for the online initiative and pledged “EAC continued support in automating agricultural crops trading systems and processes to reduce commercialisation cost and all related challenges and bridge the gap between farmers, traders and consumers for increased food security in the region”. Speaking at the same occasion, the Executive Director of EAGC, Mr. Gerald Masila disclosed that G-Soko was part of a five-year trade enhancement and promotion programme in the region. He said linking rural food production zones in East Africa to urban consumption centres requires a well-functioning regional market and that by adhering to the system, farmers in the region will, among others, be able to access credit while waiting for prices to increase through pledging...

Director General of the Standards Organisation of Nigeria Joseph Odumodu, discuses how the Africa Standards Organisation under his leadership, is enhancing trade on the continent, he spoke with Crusoe Osagie. Excerpts: As President of ARSO, what stage are you now in terms of harmonisation of standards across the region and the enhancement of intra-African trade? I will like to do some introductions. In 1991 I think, there was what they call the Abuja treaty and it was in that treaty ‎that African countries talked about the creation of Africa economic community. I do recall again that in that treaty, they identified the importance of quality infrastructure in the development of the African continent and there were other issues that they highlighted at that time, pointing out that African countries were not trading with each other enough but trading with other economic communities. What was also identified as a major constraint was the fact that we were already used to the quality of products coming from other continents but apparently, we do not trust each other about the quality of products we were circulating amongst ourselves. ARSO was actually formed about 50 years ago by the Organisation of African Unity (OAU), but I must say that not much was done after the formation of ARSO in terms of using it as a vehicle for creating economic development for Africa. Just as in the case of Nigeria, nobody thought of how we can use standards to develop our economy. Today, at least...

The tax bodies of the region have rolled out a scheme to consolidate gains from local Customs incentives in order to increase import revenues and minimise trade bottlenecks faced by business people while clearing goods. The Authorised Economic Operator (AEO) scheme allows accredited firms to enjoy shorter turnaround times for clearing goods at border points across the region and faster verification checks, according to officials. Local AEO schemes offer faster Customs clearing procedures to gazetted firms within national borders. Leveraging efficiency gains By leveraging the efficiency gains generated by the Single Customs Territory arrangement rolled out in February 2013, regional AEO firms could register Customs turnaround times of one day on certain trade routes compared with the current three-and-a-half days, sources said. Richard Kamajugo, a trade and Customs expert based at Trademark East Africa said: “For example, cargo consignments between Kampala and Katuna border station will take less than a day for beneficiaries.” Over the medium term, businesses should post higher profits due to the cost-saving thus effected. The AEO model is the brainchild of the World Customs Organisation, which offers incentives to importers and exporters for the purpose of improving tax compliance, increasing revenues from Customs transactions and boosting efficiency levels among beneficiary companies. After nearly three years of preparation, 13 pioneer firms were awarded regional AEO status last month, with revenue officials citing delays in resolving tax-related queries concerning selected businesses as a major challenge during the vetting process. Eligible firms were selected from the pool of existing...