Kenya’s mobile money transactions rose 6.5 percent in the first 11 months of 2017 as compared to a similar period last year, Central Bank of Kenya said in a report released on Thursday. The East African nation’s citizens made transactions valued at 33 billion U.S. dollars between January and November 2017, up from 31 billion dollars in a similar period in 2016. The surge showed that the country would surpass 2016 figures in use of the service, which stood at the 33 billion dollars mark. During the 11 months, according to the apex bank, the largest transactions were done in March, where they stood at 3.2 billion dollars, while the least was recorded in February at 2.7 billion dollars. The number of people employed as agents in the sector also surged significantly in 2017, peaking at 176,986 in November, having started at about 150,000 in January. Source: Coast Week

Reluctance by individual East African Community (EAC) countries to fully open their borders is hurting trade and growth of local manufacturing firms, a regional business lobby group has said. East African Business Council acting chairman Jim Kabeho said partial harmonisation of trade rules by the six EAC states has hurt expansion in regional trade. Some EAC countries, he said, are still erecting non-tariff trade barriers at official borders such as refusal to recognise certificate of origin for some goods, more than seven years after the Common Market Protocol was enforced on July 1, 2010. The pact allows for free movement of goods, people, labour, services and capital among the six partner states — South Sudan being the latest member. “There are many positions we (EAC) have agreed upon which are not being implemented. Individual countries do not want to give away their authority to the common market,” Mr Kabeho told the Business Daily in Nairobi. “We do not have a common market per se as far as I am seeing in trade. We still have official borders being non-tariff barriers.” Kenya and Tanzania, for instance, continue to disagree partly over certificates of origin at the Namanga border. The Kenya Association of Manufacturers has blamed the Tanzania Food and Drugs Authority’s for demanding that some of the products from Kenya be registered, re-labelled and retested. The suspicion among EAC states, Mr Kabeho said, has provided room for an influx of cheaper goods available in the region into the bloc, largely from China and...

The Jomo Kenyatta International Airport will, over the next 100 days, undergo major changes as Kenya gears up for the roll-out of direct flights to the United States. Cabinet secretaries James Macharia (Transport and Infrastructure), Fred Matiang’i (Interior) and Najib Balala (Tourism) last week announced a raft of changes that seek to transform the country’s premier airport into a global aviation hub. Create harmony Mr Macharia said the changes were meant to create harmony among workers at the airport so that they can deliver services at international standards, after the airport’s status was upgraded to Category 1 to pave the way for direct flights to America starting October. “We want to ensure all agencies at the airport work together. JKIA is a key hub in the region and we should therefore meet the expectations of the international community,” he said. Dr Matiang’i said the changes will improve efficiency in handling travellers and creating order at the airport. To begin with, there will be new regulations to control taxis and tour vans. Customer care Public servants at the airport including the police, Kenya Revenue Authority and Immigration officials will be trained on customer care, he added. And there will be more service desks to handle the anticipated increase in the number of travellers. “We must make tough decisions to ensure that there is maximum order at the airport,” said Dr Matiang’i. “But we need to improve efficiency at Immigration. This is the front desk for the country. We received many complaints...

Kenya has opted out of the East African capital markets integration (CMI) project that is to be effected later this year in a bid to make trading in shares quicker and cheaper. In a letter written to the EAC Secretariat in mid-November, Kenya said it would not join Burundi, Rwanda, Tanzania and Uganda to launch the platform in September, suggesting it had concerns on the infrastructure. It said it would monitor the performance of the regional platform vis-à-vis its ongoing modernisation of trading interfaces. Kenya pulled out of the CMI project in 2015, citing irregularities in the $3.3 million tendering process of the software and requested for more time to consult on the matter. Quality of the software Among the concerns Kenya had was on the quality of the software being purchased and whether it will be compatible with the Nairobi Securities Exchange’s clearing and settlement system as well as the capacity of the vendor to deliver on the project. Burundi, Rwanda, Tanzania and Uganda are working on a schedule to have the project up and running by its September 2018 completion target. The project involves acquisition and installation of an information technology platform, the Smart Order Routing System, linking the clearing and settlements systems of securities trade among the EAC member states. It is part of a wider World Bank-funded EAC Financial Sector Development and Regionalisation Project 1, which seeks to support the establishment of a single financial market among the EAC member states. To ensure that the project...

Six years ago, African leaders decided to establish the Continental Free Trade Area (CFTA), a flagship project of the African Union’s Agenda 2063 aiming to fast-track the continent’s economic growth and development by creating one gigantic market of more than 1.2 billion people with a combined GDP of US$2.19 trillion. Prudence Sebahizi, the Chief Technical Advisor and Head of the CFTA Unit at the AU Commission’s Department of Trade and Industry, talked to The New Times’ James Karuhanga about the project’s progress ahead of the upcoming 30th AU Summit, in Addis Ababa, Ethiopia later this month. Excerpts: You say the CFTA is a game changer for Africa and its people. For readers who might not have followed developments, what is this CFTA and how is it a game changer for people on the continent? The Continental Free Trade Area is a continental geographic zone where goods and services are supposed to move with no restrictions among member states. Once established, there shall be no administrative barriers at any country’s borders in regards to movement of goods and services. The CFTA will be established by a comprehensive agreement to be concluded by African Union Member States within the broader framework of continental integration agenda and the Abuja Treaty Establishing the African Economic Community. The CFTA aims to achieve a comprehensive and mutually beneficial trade agreement among member states covering trade in goods, trade in services, investment, intellectual property rights and competition policy. It is a game changer in the sense that it will be...

Kenya Railways might be forced to further reduce rates on the standard gauge railway freight trains for the service to be competitive, stakeholders in the logistics sector said on Saturday. Express Shipping and Logistics Limited CEO Silvester Kututa said for the freight trains to attract importers who already have existing contracts with transporters, the rates must be lowered. “Importers are enjoying generous discounts from transporters and to lure them and attract high volumes to be designated to the Inland Container Depot (ICD), their rates will need to be irresistible. We are talking of an offer of up to Sh30,000 for the 20 foot container,” he said. KR started commercial operations of freight trains on the SGR track on January 1 and is charging Sh50,000 and Sh70,000 for the 20 and 40 foot container respectively from Mombasa Port to the Nairobi ICD. But importers have to spend between Sh15,000 and Sh20,000 on the last mile transport to industries within Nairobi depending on the distance from ICD. With transporters charging between Sh60,000 and Sh80,000 to ferry the 20 foot container from the port to the door step of the importer in Nairobi, KR has faced challenges getting enough cargo. After the first train ferried 216 containers, the second one was delayed and left after two days. “I believe that even with a rate of Sh30,000 the corporation would still make money,” Mr Kututa added. KR is operating freight trains with 54 double-stack flat wagons, carrying 216 twenty foot containers each with a...

NAIROBI, Jan. 10 (Xinhua) -- The apex body of business associations in the East African Community (EAC) on Wednesday said food, drugs and cosmetics are the most affected by non-tariff barriers in intra-EAC trade. East African Business Council (EABC) Executive Director Lilian Awinja told Xinhua in Nairobi that trade barriers of most other products have been resolved and these goods are freely flowing across the EAC member states. "The main reason why food, drugs and cosmetics face trade barriers at the EAC border points is due to lack of harmonized standards across the three sectors," Awinja said during a media briefing. EABC draws membership from private sector organizations in Kenya, Uganda, Tanzania, Rwanda and Burundi. The regional body has already established an East African Private Sector Standards Platform that addresses trade barriers faced by suppliers in intra-regional trade that are caused by differences in technical regulations among EAC member states. Awinja noted that while Kenya and Tanzania have foods standards bodies, Uganda is yet to fully operationalize its organization. "This has resulted in different laws on food safety that have hampered intra-EAC trade," she said. The East African Legislative Assembly has already endorsed the EAC Standardization, Accreditation and Conformity Assessment (SACA) Bill that seeks to harmonize foods, drugs and cosmetics standards across the region. The heads of states of the EAC partner countries are set to sign the bill so that it becomes law later this year. Source: Xinhua

Dar es Salaam. Economic growth in the Africa region is projected to continue to rise to 3.2 per cent in 2018 and to 3.5 in 2019, on the back of firming commodity prices and gradually strengthening domestic demand. However, this growth will remain below pre-crisis averages, partly reflecting a struggle in larger economies to boost private investment. According to the World Bank latest analysis of Global Economic Prospects (GEP), South Africa is forecast to tick up to 1.1 per cent growth in 2018 from 0.8 per cent in 2017. “The recovery is expected to solidify, as improving business sentiment supports a modest rise in investment,” reads the report. However, policy uncertainty is likely to remain and could slow needed structural reforms. Nigeria is anticipated to accelerate to a 2.5 per cent rate this year from 1 per cent growth in the year just ended. An upward revision to Nigeria’s forecast is based on expectation that oil production will continue to recover and that reforms will lift non-oil sector growth. Growth in Angola is expected to increase to 1.6 per cent in 2018, as a successful political transition improves the possibility of reforms that perfect the business environment. The regional outlook is subject to external and domestic risks, and is tilted to the downside. “Although stronger-than-expected activity in the United States and Euro Area could push regional growth up due to greater exports and increased mining and infrastructure investment, an abrupt slowdown in China could generate adverse spillovers to the region...

Kenya has initiated informal bilateral talks with Britain as it seeks to establish a new trade deal to protect its exports to the European market now that Brexit will likely affect duty free access of Kenyan goods to the country. Trade Principal Secretary, Chris Kiptoo, says though the UK will be officially pulling out of the European Union next year, there is a likelihood of Brexit negotiations affecting the movement of Kenyan goods to the country. “We are currently holding some informal talks with the UK to ensure our exports to Britain is not impacted when the country eventually pulls out of EU in 2019,” said Dr Kiptoo Thursday. The PS said the discussion revolves around having Kenyan goods access the British market under the duty free tariff as is currently the case with horticultural produce destined to the EU market under the Economic Partnership Agreement (EPA). Source: Business Daily

Players in the shipping and logistics business have spoken on the rocky start of the cargo train on the standard gauge railway, including delays tied to limited cargo. They have blamed efficiency hiccups and lack of a clear agreement between the SGR operator and cargo owners for the cargo shortage that has hit the SGR goods haulage launched on Monday, forcing Kenya Railways to delay the daily service. Performance of the rail freight sector needs to be stimulated by improving customer service to boost uptake of the service. Shippers reckon the cargo shortage is an artificial one caused by unclear operational steps. For example, they say, it is not clear who between the Kenya Ports Authority (KPA) and the railway firm will handle the cargo invoices. After the expansion of the Mombasa port, it was anticipated that growth in volume of cargo would automatically boost hauling. “But this is not the case because of technical hitches in sections of the value chain despite the SGR launching its goods haulage business just the other day,” said a maritime operator. These reservations have been registered despite assurances by Kenya Railways Corporation that the offloading of cargo at the Mombasa Port, transport and delivery is “now very efficient.” Delays were reported to have hit the second cargo train that finally arrived at the newly expanded Embakasi Inland Container Depot (ICD) in Nairobi on Saturday. KR said the train was stuck at Mombasa port awaiting containers, raising fears that investors were still opting for...