EAST African Community (EAC) states are aspiring for a single EAC currency by 2024. Tanzania, Kenya and Uganda are determined to merge their respective shillings with Rwanda and Burundian Francs to form the single legal tender for the bloc in the next seven years. South Sudan will also lose its relatively valuable pound, melting Juba’s currency into the envisaged EA currency. Latest reports on the process for the proposed Monetary Union (MU) for the six EAC member states indicate that the envisaged MU is expected in 2024, with introduction of the common currency to replace the national currencies as well as establishment of the regional central bank, East Africa Central Bank (EACB). “Transition to the EA Monetary Union (EAMU) is as a two-phase process, with the initial convergence phase enabling partners to work towards achieving preconditions designed to limit the union’s exposure to internal economic strains,” said EAC Principal Communication Officer Simon Owaka. He revealed the preconditions as macroeconomic convergence criteria, full implementation of the Common Market protocol, establishment of institutions to support the MU and harmonisation of policies and practices. “Once these preconditions are satisfied, partners will enter the final conversion phase, announcing a predetermined date for the union formation.” According to the EAMU protocol, the EAC members have agreed on four primary convergence criteria, which all partner states have to attain and maintain for at least three years before joining the MU. The criteria are headline inflation of eight per cent ceiling, reserve cover of 4.5 months of...

Arusha — Multiple border checks in East Africa have been wasteful, the East African Community (EAC) secretary General Liberat Mfumukeko has said. "They have caused unnecessary costs to business. Unnecessary restrictions should be done away with", he said last week during the opening of the One Stop Border Post (OSBP) at Mutukula. He said as the facility was launched by Presidents John Pombe Maguruli and Yoweri Museveni of Uganda that OSBPs were not entirely knew because they were envisioned in the EAC Common Market Protocol. "The first OSBP operations was at Malaba railway station between Uganda and Kenya over ten years ago. These pilot programmes provided a practical justification for upscaling the One Stop Border programme in the entire region", he said. He added that it was long that the Customs Departments of the partner states realized that multiple examination of goods at their internal border within EA was "wasteful and caused unnecessary costs to business". The construction of the Mutukula OSBP was carried out with funding of $11.7million from the United Kingdom through the Department for International Development (DFID). The systems and other related soft infrastructure equivalent to $1.2million was funded by the Government of Canada, through Global Affairs, Canada. The OSBP investment includes office buildings, roads and parking yards, cargo verification bays, scanner shed, passenger sheds and targeting booths. Others are warehouse and canopies, ICT networks and hardware, furniture, and institutional support to the border agencies. EAC says OSBPs would not only ensure effective border control mechanisms were...

The industrial sector should take advantage of the East African Community (EAC) 150 million people and opportunities created by the regional Common Market Protocol to stimulate demand and competitiveness. Alphonse Kwizera, the Rwanda Association of Manufacturers (RAM) technical expert, said the success of the EAC industrialisation programme will depend on the manufacturing sector’s ability to leverage the opportunities the bloc and other markets on the continent present them to deepen their reach and become sustainable. Kwizera added that a fully functioning common market and deepening of regional integration through a monetary union could provide the much-needed stimulus to drive industrial growth across the region. The RAM official was speaking after the release of EAC Industrial Competitiveness Report 2017 on Friday by the East African Community secretariat, United Nations Industrial Development Organisation (UNIDO) and the Government of Korea. The report with a theme, ‘Harnessing the EAC Market to Drive Industrial Competitiveness and Growth’ assesses the region’s industrial performance vis-à-vis other regions and role models in Asia and Africa, and sheds light on strategic short and long-term industrialisation paths that the EAC should pursue. It also provides a compass to policy-makers, the private sector, particularly manufacturing firms and associations, and other stakeholders on the broader direction of the EAC industrial development trajectory and the internal competitiveness dynamics among partner states. It also points out the need to embrace uniform and sustainable approaches that will help boost competitiveness of manufacturers in the region. Uniform approach to industrial development According to Kwizera, supporting regional...

An official from the European Union has asked the East African Community to sign the Economic Partnership Agreement, saying it will not necessarily affect the region’s industrialisation drive. Commissioner for international co-operation and development Neven Mimica said the EU will continue negotiations so that all member states can endorse the EPA which “will open European markets to East Africans.” The region is divided on the EPA which needs approval from all member states. Kenya and Rwanda signed the deal last year. In September, Uganda’s President Yoweri Museveni led trade ministers from the region to the EU headquarters in Brussels in an effort to reach a regional consensus. In March, Kenya accused Tanzania and Uganda of insincerity in their refusal to sign the EPA. President John Magufuli had in February described it as a form of colonialism at a joint press conference with President Museveni at State House in Dar es Salaam. “We have discussed the EPA for a long time but it seems like another form of colonialism… it is bad for our country,” said President Magufuli. He said that after studying the EPA, he had realised that African countries would not benefit from it economically as its architects touted. President Museveni warned African countries that EPAs might break up their unity. “It is better if the signing is shelved until further consultations are made,” he said. Source: The East African

Trade disputes and mistrust among member states threaten to scuttle efforts to integrate the East African Community into a single economic and political bloc. Hardline positions taken by the member states on various issues affecting the region has watered down provisions in the Treaty, which provides for peaceful settlement of disputes. Chapter six of the EAC Treaty lays down the fundamental principles designed to govern the achievement of the goals of the regional bloc by partner states. These include mutual trust, political will and sovereign equality. Others are peaceful co-existence and good neighbourliness, peaceful settlement of disputes, and equitable distribution of benefits. The EastAfrican reviewed major trade deals that have caused friction among EAC partner states while threatening the stability of the bloc. While EAC Common Market Protocol liberalised the movement of labour in the region and set December 31, 2015 as the deadline for the partners states to waive permit fees, only Kenya, Uganda and Rwanda have complied. Tanzania and Burundi still require work permits for which all non-nationals have to pay fees, contrary to the protocol. Tanzania has since disregarded calls to abolish work permit fees for other citizens of the EAC and in November last year, the country’s Immigration Department only reduced the fees to $500 from $2,000 for EAC citizens seeking to work in Tanzania. The Protocol for the Establishment of the East African Community (EAC) provides for the establishment of a Customs Union and a Common Market as transitional stages to and integral parts of the Community. But a report on the elimination of non-tariff barriers in...

Protection of East Africa’s dairy and motor vehicle industries from competition is one of the stumbling blocks facing a trade agreement with southern African states. The East African Community (EAC) is negotiating a deal with the Southern African Customs Union (SACU) to scrap import duty on at least 60 per cent of products traded between the blocs. However, a report released last week by the Council of Ministers on EAC Affairs and Planning shows that the two bodies failed to agree on several key tariff lines in a September meeting in Johannesburg. SACU requested that the EAC scrap duty on dairy products and motor vehicles within five years of signing the deal. The EAC did not respond positively. “On motor vehicles and dairy products, (the) EAC has responded that the products are sensitive due to their strategic importance for economic development in the EAC,” says the report. The EAC did agree to carry out an analysis on the implications of scrapping duty on motor vehicles. SACU also asked for immediate the liberalisation of trade in refrigerators, plastic tubes, beef, salt and wines once the deal is signed. EAC “agreed to offer only refrigerators for immediate liberalisation,” pleading time to consult on the rest. The southern African countries were similarly unreceptive of EAC’s request to liberalise trade in textiles, cut flowers, edible oils, fruit juices, coffee and vegetables. SACU’s member states are South Africa, Botswana, Lesotho, Namibia and Swaziland. The blocs have already agreed to liberalise 66.7 per cent and 64.25...

Grain handlers have asked millers to collect subsidised maize from Mombasa port and forestall a looming shortage. Grain Bulk Handlers Ltd (GBHL) on Sunday said more than 20,000 tonnes of maize was at the port awaiting collection by processors. The government allowed importation of duty-free maize on May 4 as drought ravaged many parts of the country. The window was to expire on July 31 but was extended to September 30. SHIP Millers on Friday said delays at the port had resulted in maize shortage and warned that it would hamper their efforts to process the Sh90 per 2kg-pack subsidised flour. However, GBHL terminal manager Michael Mwakamba asked the companies to get their stock. “There were delays in offloading cargo because of heavy rains but operations are back to normal. We are offloading at least 14,000 tonnes of grains daily, 6,000 of them maize,” he said as 42,000 tonnes were being unloaded from a ship. “We have witnessed a drop in off-take of the maize as millers concentrate on wheat. In total, there are about 135,000 tonnes of maize and wheat in our silos awaiting collection.” He said whereas at least 350 trucks were required to meet the demand of packaging daily, transporters were sending only 200. The official said priority was on offloading maize to clear a backlog of at least 160,000 tonnes in 20 days. Due to the anxiety associated with the unpredictable political climate in the country, transporters scaled down their fleets, fearing their vehicles would be...

A second one-stop-border-post (OSBP) to be launched by the East Africa Community at Mutukula Town on the Uganda -Tanzania border will cut clearance time by one third, an official said. TradeMark Africa (TMA) says the OSBP will bring together immigration and customs officials from the two countries under one roof at the crossing point, doing away with need for trucks and persons to undergo clearance twice at both sides of the border. “This improves ease of doing business across borders,” said TMA communications manager Ann Mbiruru. “Increased efficiency in border controls boosts trade by cutting the time taken to clear goods and people between the two nations, thus contributing to a reduction in transport cost, whilst increasing volumes of transhipment cargo through the transport Corridor.” Ms Mbiruru cited a time and traffic survey at the Mutukula border which shows time spent crossing the border has reduced by over 50 per cent after the first OSBP was opened. It is expected that time to cross the border will reduce by at least a third. TMA through funding from the UK Department for International Development and Global Affairs Canada has funded the construction and operationalisation of the Mutukula one-stop border post. This is in addition to supporting other OSBP’s including: Busia/Busia; Malaba/Malaba; Kabanga/Kobero; Holili/Taveta; Elegu/Nimule; Mirama Hill/Kagitumba) across the region. These projects cost investments worth about $117 million, with an estimated return of $30 for every dollar spent. OSBPs complement other initiatives TMA is undertaking to reduce trade barriers. Source: Business Daily

Kenya Association of Manufacturers (KAM) in partnership with TradeMark Africa have launched an online portal in a quest to provide investors in the country with up to date data on the sector. The centralized business portal will provide industry stakeholders and potential investors with information on economic and legal environment, industrial and trade statistics relevant to the manufacturing sector and its sub sectors. Speaking during the launch, Ministry of Information, Communication and Technology, State Department of ICT and Innovation Principal Secretary, Mr. Victor Kyalo noted that the ICT sector is envisaged to transform Kenya into knowledge and information based economy. “ICT sector is the catalyst for competitive and dynamic economies. Kenya is considered the leading technology and innovation hub in Africa. The development of a large-scale telecommunications infrastructure in Kenya, capable of delivering efficient and affordable info-communications services is recognized as a critical prerequisite for the country’s economic growth. The Ministry of Information, Communication and Technology is therefore keen to partner with KAM to mainstream innovation in industries,” added Mr. Kyalo. KAM Chairlady, Ms. Flora Mutahi noted that the information shared through the portal will provide investors with the necessary data needed to map out areas of investment and potential sectors for businesses to scale into. “Kenya moved a notch higher in e-commerce following the recent launch of the devolution portal which seeks to provide an interactive platform for information sharing between the Business Membership Organizations County Governments and Constitutional Implementation Bodies. Another key milestone for industry has been the...

And in common with other container ports around the world, the number of vessels serving those trades has dropped as the average teu has increased to a record 4,400 teu. Even after removing distorting wayporting calls, the trend is still for less ships of larger sizes. This has clearly placed pressure on ports serving these African trades, where private ownership is very much the exception rather than the rule. Dynamar’s in-depth study of the East & Southern Africa Container Trades (2017) finds that the Far East and the Middle East vie for the lion’s share of East and Southern Africa container trade. With a forecast growth of 12% in the overall region’s economy to 2019, East African trades seem to offer better prospects to those of Southern Africa, according to the report. Dynamar even goes so far as to predict that East Africa and the Indian Ocean Islands might supplant Southern Africa as the larger container trade in the future. The Study features an interesting summary of ESAF ports and their respective capacities, highlighting 24 ESAF ports that appear on the schedule of intercontinental liner services. Seven are in East Africa, eight are in the Indian Ocean Islands and the remaining nine are in South Africa. Interesting developments cited include: Mombasa’s capacity now being at a level that puts it into second place behind Durban; Dar es Salaam inching up to just behind Ngqura and the rise of Port Reunion as a hub thanks to its increased use by CMA...