A number of ports development projects across Africa may be pointing to a positive outlook for capacity expansion in the region, but the myriads of uncertainties in economic growth become a limiting factor. The United Nations in its new report tagged: "Review of Maritime Transport 2017," is optimistic that the projects, when realised, would aid trade facilitation in the region. However, projects such as the $1.5billion Lekki Deep Seaport in Nigeria, and the proposed $2.5billion Badagry Deep Seaport are currently facing challenges ranging from economic considerations to inconsistency in policies. The United Nations Conference on Trade and Development (UNCTAD) report noted that container port volume in Africa dropped by 1.2 per cent in 2016, but will grow by 1.1 per cent in 2017, and by 2.5 per cent by 2018. It, however, forecast that world seaborne trade will increase by 2.8 per cent in 2017, with total volumes reaching 10.6 billion tonnes. Projections for the medium term also point to continued expansion, with volumes growing at an estimated compound yearly growth rate of 3.2 per cent between 2017 and 2022. UNCTAD noted that against the situation in some regions, the projected demand is expected to surpass planned capacity growth (East Coast of North America, China and Oceania). "Capacity expansion is expected to outweigh demand growth in Northern and Western Africa, Southern Asia and the Gulf Coast of North America, sighting Drewry Maritime statistics. "Assuming all planned projects are implemented, it is likely that capacity growth in Africa and Southern Asia...

A majority of East African economies are yet to make significant reforms to create an easier environment to do business, a new World Bank report shows. Only Rwanda and Kenya made notable changes to improve doing business in the region, moving more than ten places up globally, according to the World Bank's Doing Business 2018 report. Rwanda remains the easiest place to conduct business and is ranked 41 from 56 last year. Kenya, East Africa’s largest economy, moved 12 places up to position 80 from 92 last year. The two countries, which rank second and third after Mauritius (25) in sub-Saharan Africa, eased paying and filing taxes by establishing online platforms and dealing with construction permits by eliminating licence fees in the case of Kenya and introducing risk-based inspections in Rwanda. Kigali, the report notes, also improved in corporate governance, online registration of property transfers and allowing public access to judgements on commercial cases. Nairobi’s reforms included merging procedures for business registration, reliable electricity with specialised teams to restore outages, access to credit information and reducing time in cross-border trade by enabling electronic submission of customs entries through the single window system. Laggards Despite impressive economic growth, Ethiopia dropped ranking from 159 last year to 161. The country only reforms included removing the requirement to open a bank account for company registration and eliminating the paid-in minimum capital requirement. It also strengthened its customs authority to better cross-border trade. Tanzania increased land and property registration fees and was ranked 137 dropping five...

Buses plying the Mombasa-Nairobi route could be headed for another round of loss-making after Kenya Railways Corporation launched a morning inter-county train Wednesday. The Madaraka Express train that has been operational since June will now make stops at Athi River, Emali, Kibwezi, Mtito Andei, Voi, Miasenyi and Emali stations twice a day. The stops are in Machakos, Makueni, Taita-Taveta, Kwale and Kilifi counties. The express service has been rescheduled for 3.30pm daily. Using the train is cheaper than bus and matatu service. Bus fare from Voi to Mombasa is Sh300 but one will only use Sh210 by train. DEMAND Mombasa-Mariakani fare is usually Sh100 but the train charges Sh50. From Nairobi to Voi, bus passengers pay Sh1,000 as opposed to Sh510 on the train. Transport Cabinet Secretary James Macharia, who flagged off the first inter-county train said there has been an increased demand for transport provided by the Chinese built Sh327 billion standard gauge railway. “The train has been in operation for more than five months and we are also in the process of rolling out the second phase of construction connecting Nairobi to Naivasha which will be completed in about 36 months,” the minister said. The booking window has also been increased to seven days from three.” UPGRADE He added that the ministry would upgrade access roads to the nine stations in the coming six months. Matatu Owners Association chairman Simon Kimutai said passenger numbers for high capacity buses could be reduced but business would thrive for the small operators. “The...

The new service that commenced on Wednesday, Nov 1, will be an express train set to depart the Nairobi and Mombasa Termini at 3:30 pm. The existing morning train has now been transformed into an inter-county train service, departing at 8am from both Nairobi and Mombasa termini, and stopping at all the seven intermediate stations. Infrastructure Cabinet Secretary James Macharia says that the new service is part of measures to increase access and lower the cost of transport across the country. “Since its launch five months ago, the Madaraka Express has moved over 337,000 passengers between the port city of Mombasa and Nairobi, with the number growing daily. We are currently performing at over 90 percent with regards to passenger numbers, and by introducing this additional service we expect to measure up to the type of service the public has demanded since we launched the passenger service in June; just one of the key highlights we have had as a ministry even as we seek to improve the overall transport sector,” he said. He said by introducing this second train, it will be more difficult for middlemen to take advantage of Kenyans by doubling the availability of train tickets as well as the daily train capacity. “Over time, KR and China Roads and Bridges Corporation have introduced a number of initiatives that we hope, have made Madaraka Experience better. They have introduced various ticket booking platforms, meaning you no longer have to physically visit the termini to purchase your tickets;...

EAST African Community (EAC) moves towards surmounting financial control to improve management of donor-funded projects amid shrinking contribution of development partners (DPs). EAC Secretary General Ambassador Liberat Mfumukeko (pictured) told the first EAC Development Partners Consultative Forum here yesterday that the secretariat has already recruited the manager for the Partnership Fund, with the view of enhancing fund management and efficiency. "The Partnership Fund is key in coordination of EAC development partner support. It has continuously played critical role in supporting activities to accelerate EAC agenda since its inception a decade ago," Ambassador Mfumukeko said, hinting that the fund manager has already reported for work. The EAC mission is to widen and deepen economic,political, social and cultural integration to improve the quality of life of all citizens in the region through increased competitiveness, value addition to agricultural produce, trade and investments. The community secretariat is responsible for fund mobilisation from DPs and other sources for project execution. Ambassador Mfumukeko said that the EAC has significantly strengthened its financial systems and procedures. The PF was established in 2006 to coordinate and channel contributions by DPs to projects and programmes towards regional integration and socio-economic development as well as facilitate harmonisation and alignment of their support to the EAC. Head of Corporate Communications and Public Affairs Department at the EAC Secretariat Owora Othieno said the new unit will deal with administration of the fund, communication with fund members, monitoring and evaluation of the achievements, budgeting, financial control, auditing and supervision of work-plan execution....

Logistics costs and operation time in Kenya significantly dropped last year on the back of strong digital processes at key points and improved infrastructure, a new survey shows. According to the 2017 Logistics Performance Survey recently unveiled by the Shippers Council of East Africa, cost and time indicators for road freight, sea, air and rail in Kenya last year dropped compared to 2015. Road freight turnaround time between Mombasa and Nairobi in 2016 was 26.4 hours down from 36.8 hours in 2015, and 10.7 days between Mombasa and Kampala, down from 15 days. Time taken by trucks from Mombasa to Kigali dropped from 17.5 days in 2015 to 12.5 days in 2016. This illustrates a 40 per cent truck turnaround between 2014 and 2016. Truck turnaround for Dar es Saam to key corridor destinations like Kigali, Bujumbura and Kampala remained steady with a marginal decrease of 18 per cent. Port dwell-time, the time it takes a vessel to arrive at the port area to the first berths, improved from 68 hours in January 2015 to about eight hours for the Port of Mombasa. This is attributed to the introduction of fixed berthing by the Kenya Ports Authority and the expansion of the port which increased its capacity. The custom processes at the port also decreased from 55 hours to 43 hours within the year. Nairobi has the shortest airport dwell-time in the region at an average of 28 hours for exports and 33 hours for imports while the airport in...

Kenyan farmers are set to enjoy a bigger market share after the European Union committed to cut agricultural export subsidies by end of January in line with a World Trade Organisation (WTO) landmark decision passed in Nairobi. Export subsidies refer to an array of credit and guarantee schemes extended to EU traders to make their products cheaper in foreign markets. The incentives include forex loss compensation, freight cost refund and total tax refund on exportable products. They are offered in addition to domestic support which is extended to farmers to lower the production cost. Over the years, export subsidies have allowed EU exporters to grow market share for its products in developing countries while exerting downward pressure on world market prices. Kenya, for instance, exported vegetable products worth €119 million (Sh14.3 billion) and animal products worth €9 million (Sh1.1 billion) to the EU in 2016, data produced by the European Commission indicates. The EU’s 28-member states have released a draft schedule showing that export subsidy cuts will take effect by the beginning of February if members don’t raise any objections. In a statement, chair of the WTO agricultural committee, Alf Vederhus, said the EU has become the second member to initiate the process of eliminating subsidies after Australia. “The EU submitted, as part of the draft goods schedule for its 28 member states, a change of commitments incorporating the implementation of the landmark 2015 decision by WTO members to eliminate farm export subsidies,” Mr Vederlus said. Source: Business Daily

The financial cost of meeting Africa's infrastructure needs is estimated at $93 billion annually until 2020 to close the infrastructure gap, states Giovanie Biha, deputy executive secretary at the United Nations Economic Commission for Africa. Speaking at the 23rd inter-governmental committee of experts of Southern Africa last week, Biha expressed concern that the financial cost of meeting the continent’s infrastructure needs are substantial. “According to the African Development Bank, it is estimated that Africa needs about $93 billion annually until 2020 to close the infrastructure gap. Africa must look inwards in financing its infrastructure development and dismantling obstacles to intra-Africa trade and the movement of persons across the continent. "We need to prioritise and sequence the implementation of our infrastructure needs,” she stressed. Infrastructure deficit stumbling block for trade According to Biha, the continent’s road freight cost was about four times more than other regions of the world. Specifically, the intra-SADC cost of export is $1,904 per container and to import is $2,428 per container. Whereas the equivalent figures for intra-Association of South-East Asian Nations trade were $743.5 and $787.5, respectively. “Other RECs (regional economic communities) in Africa register even higher figures. Up north of the continent, a truck transporting millet/sorghum on the Koutiala–Dakar corridor has to pass through almost 100 checkpoints and border posts, and the driver can expect to pay bribes of about $437,” she said. As such, the infrastructure deficit is a major contributing challenge to trade facilitation, intra-regional trade and economic development and transformation in Africa. Energy...

Regional business leaders and experts have called for harmonised Information Communication Technology (ICT) and e-commerce policies, saying this would help fast-track socio-economic development in East Africa. Lilian Awinja, the East African Business Council (EABC) chief executive, noted that ICT is a key business enabler for sectors like trade, tourism, education and agriculture, finance and transport, among others. She added that many components of the ICT sector are cross-cutting and cross-border, hence the need for a harmonised legal and regulatory framework. The official added that the region must improve its e-commerce systems to boost trade and related services, among others. “The EAC region needs improved cross-border ICT infrastructure development to facilitate interoperability, and increased connectivity and digitalisation of government processes to reduce transaction cost of operations and ensure efficient and quality public services delivery,” said the EABC chief executive last week in a statement. Awinja was speaking ahead of the second East African Business and Entrepreneurship Conference and Exhibition, scheduled for November 14 to 16 in Dar es Salaam, Tanzania. EABC is the apex advocacy body of business associations of the private sector and corporate firms from East African Community (EAC) bloc. Lack of regional financial interoperability platform Robert Ford, the Northern Corridor Technology Alliance chief coordinator, said different ICT laws have hampered growth of regional e-commerce sector as they affect transactions. He said, without uniform policies, growth of services like mobile money and other money transfer services is limited due to lack of a regional financial interoperability platform. “So, we...

From a slugging economic growth, job losses and rising concerns of food shortages and high costs, the administration of President Uhuru Kenyatta’s second term will have its plate full as he starts his last five-year term. The administration will now be keenly watched by the business community with expectations that it will move quickly to prop up an economy greatly hit by the political stalemate that has dragged on since the country’s Supreme Court annulled the August presidential election. This looming standoff between the government and the opposition has done more damage to the economy, scaring away investors, slowing down the economy and depressing tax collections. On Monday, the Kenya Private Sector Alliance (Kepsa) said that the four-month electioneering period had cost the country $7 billion in losses, with most of it coming from the frequent disruption of transport and industrial operations during the campaigns ahead of the August 8 election, and the persistent protests after the nullification of the results later in September. In the past one month alone, investors at the Nairobi Securities Exchange (NSE) have lost $2.27 billion. The bourse has seen the monthly volume of trading drop by almost 50 per cent to more than 490 million shares traded from a monthly high of 740 million, while the average traded volume before the August 8 election was 640 million shares data from Reuters shows. The administration will have to work overtime to inspire confidence in all economic sectors. Carole Kariuki, chief executive officer of Kepsa said...