Businesses should seize a $6 trillion opportunity to invest in tackling climate change over the next two decades, the head of an Indian multinational said at Davos on Thursday (25 January). “Climate change is the next century’s biggest financial and business opportunity,” Anand Mahindra, chairman of the Mahindra Group, a $19 billion conglomerate, told the World Economic Forum (WEF), an annual meeting of global business and political leaders held in the Swiss Alps resort of Davos. Mahindra likened the transformation to when cars were first introduced and the industry that developed around them. Climate change will also bring new appliances, technologies and retrofitting of old ones, he said. “Why on earth are we talking about this as a compulsion or a burden?” he asked the audience. The idea that companies face a trade-off between improving the climate and their growth or profits is a “myth”, he added. “Everything our group of companies has done to try and improve energy (consumption) or to reduce greenhouse gas emissions has given us a return,” he said. “We have to dispel the idea that there is a trade-off (for business),” said Mahindra, who is co-chair of a climate action summit taking place in California in September. On Wednesday, Philipp Hildebrand, vice chairman of BlackRock, the world’s biggest asset manager, told the WEF a new generation is ramping up pressure on asset managers to put money into investments with a strong environmental agenda and to push companies to play a bigger role in addressing climate change....

The revival of railway connectivity is one of Africa’s top priority, African Union (AU) Commissioner for Infrastructure and Energy, Abou-Zeid Amani, affirmed Friday. Addressing the media on the sidelines of the 30th AU assembly of heads of state and government at its headquarters in Ethiopia’s capital Addis Ababa, Mr Amani added that railway connectivity is one of AU’s flagship projects. ‘I urge for implementation of AU’s Vision 2040 for Railway Revitalization in Africa that was adopted by the AU member states in June 2014,” he said. Part of this programme include the creation of an integrated high-speed train network that connects all African capitals and commercial centres on the continent, facilitating the movement of goods, people and services. Compared to other continents, Africa is the least interconnected thus hampering trade. “Until we begin to connect our countries, our trade will not be meaningful in terms of making a dent in the development that we need to undertake,” says Adama Deen, Head of Infrastructure at NEPAD. In recent years, rail construction has picked pace in some parts of the continent. In East Africa for instance, Kenya has completed the first phase of its standard gauge railway(SGR) running from the Coastal city of Mombasa to the capital Nairobi and has embarked on the second phase. Ethiopia on the other hand has inaugurated a major railway line connecting the landlocked country to Djibouti. The railway line links the capital Addis Ababa, to the Red Sea port of Djibouti – a stretch of more...

African economies have been resilient to negative shocks, yet poor infrastructure remains a key obstacle to the continent’s inclusive growth, according to the 2018 edition of the African Economic Outlook (AEO) presented to delegates at the African Union Summit on Friday. Africa’s average real gross domestic product (GDP) growth in Africa registered at 3.6% in 2017, increasing from 2.2% in 2016, according to the report. The report forecasted that Africa’s GDP growth will accelerate to reach 4.1% in 2018 and 2019. The main driver behind the witnessed growth was the overall improvement of global economic conditions, better macroeconomic management, recovery of commodity prices (mainly oil and metals), sustained domestic demand, and improvements in agricultural production. However, job growth remains a problem in Africa, as the continent still suffers from jobless growth as a result to limited structural change. Consequently, the report points out that sustained high growth did not substantially impact job creation. “Basically, a growth acceleration period is one in which the average growth rate of GDP per capita over a period of eight years is at least 3.5% per annum,” the report notes. “These studies present the behaviour of African economies in the face of difficult external conditions and announce the revival of growth with an estimated rate of 4.1% in 2018. We all know that growth is not yet inclusive in Africa, and unemployment affects more women and young people,” said the Commissioner for Economic Affairs at the African Union Commission Victor Harrison. Harrison urged member states...

Kenya is third in the usage of the dollar for domestic transactions in the East African Community countries according to a newly released report by the International Monetary Fund (IMF). The report shows that Uganda has the most dollarised economy in the region, followed by Tanzania while the least dollarised is Burundi. The latter also happens to be the smallest in terms of the annual gross domestic product in the Community. The IMF measures financial dollarisation in an economy to be represented by the foreign currency deposits and loans in commercial banks. Kenya has in the past few years kept high amounts of dollars in reserves and has also a facility with the IMF to access up to Sh155 billion ($1.5 billion) in the case of emergency. Currently Kenya and Uganda hold official foreign currency reserves equivalent to 4.7 and 5.1 months of imports, respectively. The multilateral lender has in the report recommended that countries with big transactions in dollars also keep a bigger amount of reserves in the same currency, indicating that Tanzania and Uganda should have dollar amounts of not less than 4.5 months of imports. “Given the high level of financial dollarisation, staff recommended maintaining international reserves at about 4.5 months of prospective imports rather than the earlier target of four months of imports,” the IMF said in its latest report on the Tanzanian economy, but also focusing on the other EAC countries. In a working paper released last year, the IMF staff indicated that dollarisation was...

For months it had been billed as a game changer in cargo transport - a development that would get trailers off the road, move cargo to Nairobi from Mombasa in record time and finally silence critics of the Standard Gauge Railway (SGR). But a month since the Government launched the much-awaited SGR cargo service, policymakers are still scratching their heads on how to make it more attractive to importers. The low uptake of the service is despite the State setting the price of transporting a 20-foot container from Mombasa to Nairobi at $500 (Sh50,000), a 37 per cent discount on what truck operators charge. The Government had anticipated similar success witnessed from the passenger service launched in June last year but has been putting on a brave face as questions emerge on why cargo transporters are yet to warm up to its cheaper and faster method of transporting cargo. “Trains have been bringing cargo. The first weeks are usually slow, but we anticipate this will hit five million tonnes very soon,” says Transport and Infrastructure Cabinet Secretary James Macharia. Unlike the passenger service which was hurriedly launched before the elections in what was seen as an attempt by the Jubilee administration to gain political mileage, the cargo service was unveiled on a pilot basis for six months before President Uhuru Kenyatta flagged off the first train. Kenya Railways had insisted that the pilot run was meant to identify and weed out any challenges before an all-out roll-out of the services....

Plans by the Kenya Railways Corporation to build a two-kilometre Standard Gauge Railway line linking the Miritini passenger train terminus to the central Mombasa train station is welcome. It is a worthy investment as it will enhance faster movement of passengers between the two locations. How this vital link was initially not factored in is not clear as Mombasa- bound passengers travelling from Nairobi have been alighting at Miritini and finishing the journey by road. This has proved quite cumbersome for many as it  has seen scores of passengers heading to the Western parts of Mombasa, including Moi International Airport, being caught up in traffic jams that have been blamed on trucks carrying cargo from the Port of Mombasa. The main purpose of investing billions of shillings in the new railway system was to ease transportation of passengers and cargo. Easing congestion on our roads should be the main priority when we embark on such massive infrastructure projects. We urge the government to hasten the feasibility studies process and the sourcing of finances for the project. Source: Business Daily

Kenya has dropped plans for electrification of the standard gauge railway (SGR) line between Mombasa and Nairobi, citing its high costs and irregular power supply. Kenya Railways managing director Atanas Maina said on Thursday preliminary research had shown inadequate demand for electric trains in Kenya. The government had earlier planned a Sh49 billion electric upgrade before 2021 and ahead of Uganda linking its SGR line to the Kenyan one. “Electrifying this line also depends on our ability as a country to finance that kind of infrastructure,” said Mr Maina. “It was something that we would love to have, however, the country does not have a dependable source of electricity.” While the frequency and severity of outages in Kenya have fallen over the years, many firms still run stand-by generators to cope with any supply interruptions. China Road and Bridge Corporation, which was appointed to build the Mombasa-Nairobi line, will be offered 15 per cent over the current construction costs of Sh327 billion or Sh49.05 billion more to upgrade the line. An electric track was needed for fast movement of bigger containers and passengers in the quest to boost East Africa’s competitiveness as an investment destination. The faster SGR railway, which was built in two-and-half years, started passenger services mid last year and commercial cargo services this month. The design of the SGR rail line — which is currently run by diesel-powered locomotives — allows for the addition of a single electric line. On Thursday, Mr Maina said in a TV...

Kenya’s trade deficit has for the first time crossed the Sh1 trillion mark driven by the more than doubling of food imports and machinery purchase from abroad amid sluggish exports. The deficit — the gap between imports and exports — widened to Sh1.034 trillion in the 11 months to November, up from Sh778.04 billion in the same period in 2016, the Central Bank of Kenya (CBK) data shows. Crossing the psychological level of Sh1 trillion underlines the economic impact of the increased food imports due to a drought that posed a major risk to people, livestock and wildlife. Imports increased 20.93 per cent to Sh1.58 trillion in the period to November while exports rose a measly 3.37 per cent to Sh549.18 billion. Analysts say the widening deficit is piling pressure on the shilling against global currencies such as the dollar, denying Kenya an opportunity to create more jobs because locals lose out to foreign manufacturers. The high demand for the dollar to fund imports forces the CBK to intervene, depleting foreign exchange reserves. A wider deficit is watched closely by global investors, especially when Kenya seeks foreign debt, as it affects the recommended external debt service to exports ratio of 21 per cent, which Kenya has already breached. “Kenya’s export performance has been relatively weak compared to a lot of sub-Saharan Africa’s peers and … that means considerations around foreign exchange stability are even more important to Kenya’s macroeconomic stability outlook than what has been the case traditionally,” said Standard...

Can citizens afford new, locally made clothes? And how will Chinese factories change the landscape? In 2015, shareholders of manufacturing corporations from across the East African Community (EAC) — including Rwanda, Burundi, Kenya, Uganda, South Sudan, and Tanzania — met for a summit in Uganda to discuss “a new dawn in the history of manufacturing in [the] East Africa region.” During the summit, resolutions were made, including one stipulating that the EAC would develop a policy to support the development of sectors such as textiles and apparels, “which are crucial for employment creation, poverty reduction, and advancement in technological capability.” A year later, a handful of countries in the EAC proposed banning imported used clothing in an effort to boost the development of local textile and clothing manufacturing. In Rwanda, the Ministry of Trade and Industry developed a new strategy for “Made in Rwanda,” a campaign it had started in 2014 to boost local economy by celebrating Rwandan designers and products. Linda Mukangoga, co-founder of Haute Baso, a clothing and design shop in Kigali, Rwanda, is excited about what the future holds for Rwandan designers. “Made in Rwanda,” she says, “means being able to create clothing and services in collaboration with Rwandans for both local and international consumers.” “Made in Rwanda means being able to create clothing and services in collaboration with Rwandans for both local and international consumers.” Although efforts to stimulate East African domestic markets might appear to some to be a promising sign of the EAC’s dedication to growth, the United...

Arusha — The East African Legislative Assembly (Eala) wants speeded up removal of trade barriers hampering regional integration. Newly-elected Speaker Martin Ngoga said in Kampala on Tuesday that non-tarriff barriers (NTBs) in particular were a matter of concern. "We should continue to address these challenges in order to secure East Africa's future for prosperity," he said when the fourth Assembly began its business. Mr Ngoga, a Rwandan member who was last month elected as new Speaker for Eala,insisted NTBs in particular should be stamped out quickly in order to enhance free movement of goods, labour and services. "We need to venture into new areas of integration and consolidate those we have agreed upon," he pointed out. The Speaker cited problems which have impacted the education sector in the region such as lack of uniform fees as among issues that must be sorted out quickly. Ugandan President Yoweri Kaguta Museveni reiterated increased productivity and free trade within the bloc when he addressed the Assembly on Tuesday. He said at a time of reports Uganda was facing a shortage of food, there was a huge stock of five million tonnes of maize capable of sufficiently meeting the current needs. "We need a situation where all producers in the partner states are able to freely sell their produce," the Uganda leader said in his address, according to a dispatch to The Citizen. President Museveni also called for the region to effect better use of the existing common natural resources for its own prosperity,...