The coastal breeze and picturesque views of Kenya’s Indian Ocean meets the busy port of Mombasa where heavy machinery awaits to ferry tonnes of cargo. Suddenly, the fresh and humid air is met with choking dust and screeching sounds of cranes as cargo is offloaded from the ship. Most of the shipment to Kenya includes food stuff, machinery, raw materials just to mention but a few. They are sealed and locked into containers ready for transportation to East African countries. Kenya Ports Authority (KPA) notes its Mombasa Port has the capacity to handle over 1.2 million containers annually and this number could be higher going by the several expansion works visible at the Port. Aside from this number, the challenge has been on how fast these goods are cleared for transportation to other regional countries. There is an average of 300 heavy commercial vehicles that leave Mombasa destined to East African countries on a daily basis. “Lift, pack, move… lift, pack, move” paints the picture of clockwork operations at the port. Our attention is drawn to these containers that have been a focus in the recent past. Most of the goods contained here do not reach their destination either due to highway insecurity, accidents or theft. A team of tax officials donning their usual white, army-like uniform are busy affixing a magnetic gadget to containers. This is their solution to the perennial problem facing transporters in East Africa. “A team at the gate identifies high risk goods in what we...

High trade facilitation costs and poor logistics services are hampering foreign direct investment and growth in the east African region, a senior Kenyan official said on Tuesday. Principal Secretary for Trade Chris Kiptoo said smooth logistics not only reduces the cost of imports but is vital to producers to be able to participate in global production circles and eventually move into new business. "Improving logistics includes several dimensions such as enhancing logistics capabilities, the development of rehabilitation of physical infrastructure, and the streamlining of trade-related procedure," said Kiptoo during the launch of the 2017 logistics performance survey in Nairobi. The report, released by the Shippers Council of East Africa (SCEA), said the climate of conducting business has improved in the region, thanks to right policy choices, the rise in intra-regional trade, and an enabled private sector. The report, which analyzed the performance of trade logistics with respect to indicators of time, cost and complexity against those of the world's leading trade hubs, indicates that reforms initiated by the region's member states are finally paying off. "We will use the indicators to interpret the performance of the logistics chain, reveal to both policy makers and businesses the full extent of bottlenecks, and propose appropriate redress measures," Gilbert Langat, the CEO of the Kenya Shipper's Council, said during the commissioning of the study. Road freight costs have fallen "due to improvements made in road infrastructure, reduction in the number of police checks and enhancement of weighbridge efficiencies through automation," Langat said. "However,...

East Africa’s free common market is not free at all. Seven years after internal custom tariffs were scrapped, a number of protectionist policies continue to pop up as countries try to limit the entry of foreign goods in favour of promoting local ones. This has dampened the spirit of a free regional market and raised questions over whether the East African Community is working. At a one-day private public sector stakeholders dialogue on strategies for enhancing regional compliance for national laws, which was held in Kampala on September 12, entrepreneurs raised concerns on the increasing level of business discrimination within the East African bloc. They argued that whereas Uganda is promoting the Build Uganda Buy Uganda (BUBU) policy, government was not helping local manufacturers penetrate the national and regional markets. While giving a recent incident she encountered at the Rwanda-Uganda border, Prudence Ukkonika, the proprietor and manufacturer of Bella Wines, narrated how her goods were confiscated and held for several days, and how she was forced to pay money far beyond the cost of the goods in order to have them released. “Every meeting I go to, they are encouraging people to export. But it is very different from the situation on the ground. They talk much about this but they don’t act. If other countries don’t want to take our goods, then let them tell us,” Ukkonika said. Ukkonika said Uganda’s BUBU policy has not helped local manufactures attain their dream. “Every time they say BUBU,... BUBU... but BUBU...

A leading Tanzanian cooking gas vendor saw its share market in Kenya shrink by 4.7 percentage points in the second quarter of the year as an import ban from its home country into Kenya took a toll. Latest data from the Petroleum Institute of East Africa (PIEA) shows Lake Gas commanded 17.6 per cent of the Liquified Petroleum Gas (LPG) market in the three months ending June, second to KenolKobil with 18.4 per cent share. In March, it held the largest share at 23.1 per cent, having jumped from 14.1 per cent in December 2016. The firm had not featured on the list of PIEA’s top gas suppliers as recently as September 2016. It is owned by Dar tycoon Ally Etha Awadh who recently acquired Kenya’s Hashi Petroleum retail fuel business, although this did not include Hashi’s gas business. Lake Gas has been selling its branded gas locally, but also supplies independent re-fillers, cutting the retail cost substantially. Kenya banned gas imports through its border with Tanzania in April saying it wanted to eliminate illegal filling plants that are deemed a safety risk. Tanzanian border Before the ban, it was estimated that 2,000 metric tonnes of gas were coming into the country through the Tanzania border per month. KenolKobil’s  rise to the top of the gas market has come after the firm grew its share by 4.4 percentage points in the second quarter, while French oil giant Total slipped one place to third at 14.7 per cent. Vivo gained a percentage...

British credit guarantee firm GuarantCo and risk venture fund InfraCo Africa have opened a regional office in Nairobi targeting new infrastructure deals in East and southern Africa. The two are part of the London-based multilateral Private Infrastructure Development Group (PIDG), which has been active in the region for over 15 years. PIDG established GuarantCo in 2006 with the aim of encouraging infrastructure development in low income countries, through credit guarantees that enable infrastructure projects to raise debt finance. In April last year, the firm announced its intention to spend Sh20 billion ($200 million) to guarantee local infrastructure financiers over the next three to five years. Local contractors have found it difficult to win big infrastructure tenders for lack of financial guarantees. The 300 megawatts Lake Turkana Wind Power project, for example almost stalled after the World Bank withdrew its guarantee, but later the African Development Bank stepped in to offer a partial guarantee for the deal. The Nairobi office is PIDG’s first in Africa and is expected to boost engagement with local markets, originate new deals and mobilise private capital. “This office demonstrates GuarantCo’s commitment to the region to catalyse the delivery and roll out of infrastructure projects and help support the development of the local capital markets to deliver solutions that benefit society,’ said Janice Kotut, GuarantCo regional director, East and Southern Africa. The local team is also expected to strengthen relations with regional partners as well as respond rapidly and flexibly to needs of existing project portfolios. The...

The cornerstone of U.S. economic relations with sub-Saharan Africa since 2000 has been the African Growth and Opportunity Act, or AGOA. The program offers more than three dozen participants preferential access to U.S. markets by eliminating import tariffs. Policymakers hoped that AGOA, as the primary U.S. trade policy for the region, would foster economic and political development in Africa. However, the outsized role of oil and apparel in African export growth has raised questions about whether AGOA can diversify the region’s economies and increase its competitiveness in global markets. Meanwhile, U.S. trade with AGOA’s participants has dropped since its 2008 peak almost to its pre-AGOA total, while African trade relationships with other countries, particularly China, have expanded. Why was AGOA created? AGOA is a trade preference program established in 2000 as part of broader legislation to strengthen U.S. trade ties with Africa and the Caribbean enacted by President Bill Clinton. The act is unilateral, meaning that it does not require African countries to lower their own barriers to U.S. goods, though it encourages them to do so. President Clinton saw the policy as a way to boost growth and bolster democratic ideals across the continent. He also said that it would strengthen the U.S. economy by opening markets with “hundreds of millions of potential consumers” to American producers. The act is an extension of a U.S. trade preference system introduced in 1974 that allows more than one hundred countries, mostly in the developing world, to export many of their goods to the...

Member states of the Common Market for Eastern and Southern Africa (COMESA) have been urged to expedite the completion of the current infrastructure projects to boost regional trade. The call was made during the 10th Joint Meeting of the Committees on Transport and Communications, Information Technology and Energy held in Lusaka Zambia last week. According to the COMESA secretariat officials, member states need to take decisions that will help accelerate the implementation of the bloc’s infrastructure projects. Rwanda High Commissioner to Zambia and permanent representative to COMESA, Monique Mukaruliza, said the idea is to support the completion of most pending infrastructure projects to spur the region’s development. Mathew Nkuwa, the Zambian Minister for Works, Transport and Supply, said there is need for policies, systems, institutions and resources to support infrastructure development and maintenance, adding that this move would reduce the infrastructure gap, support poverty reduction efforts, as well as “create wealth and enhance economic development in the COMESA region”. Nkuwa highlighted lack of financial and technical resources to the support infrastructure projects as one of the main causes of delays in the implementation process. “There is need to develop modern infrastructure that will make it easy for member states to trade amongst themselves,” he added. Fast tracking airspace liberalisation Meanwhile, the COMESA infrastructure ministers agreed on the need to fast-track the liberalisation of air space in the region to increase connectivity and boost trade. They say, air transport liberalisation will lead to increased air service levels and lower fares and,...

The trade row between Kenya and Tanzania cost the former Sh2.6 billion in the first seven months of this year, data shows. The latest figures from the Kenya National Bureau of Statistics show that Kenya’s exports to Tanzania dropped by 17.8 per cent between January and July to Sh11.9 billion, from Sh14.5 billion in the same period last year. And with the value of exports to Dar es Salaam averaging Sh1.7 billion a month, total exports at the end of the year are likely to hover around Sh20.4 billion, a far cry from the Sh34 billion that Kenya raked in from its exports to the neighbouring country. Besides the trade row, which saw relations between the two countries hit rock bottom when Nairobi banned the importation of LPG and wheat from Tanzania a few months ago, the heightened political activity in Kenya for the better part of the year has also contributed to the plunge in exports. Experts believe that things can only get worse, aggravated by the toxic political climate following the annulment of the August 8 presidential results by the Supreme Court. A number of traders from Uganda, Rwanda, and Burundi have given Kenya a wide berth in transporting their goods, fearing the possibility of ethnic skirmishes similar to the ones that erupted after the disputed presidential election in 2007. The Petroleum Institute of East Africa (PIEA) recently released a report showing that diesel consumption has gone down due to, among other factors, traders from the neighbouring landlocked...

James Ssewankambom stares blankly as cameras click away while a revenue officer fits a tracking device onto his truck. The truck driver is about to set off for his weekly journey, ferrying goods from the port of Mombasa on Kenya’s coast to Uganda’s capital Kampala — a journey of more than 900km. It is the 14th time that Mr Ssewankambom’s truck is being fitted with the tracking seal, a requirement under the regional electronic cargo tracking system (Rects) programme. The web-based system under pilot from March this year, seeks to facilitate trade on the Northern Corridor by allowing revenue authorities from Kenya, Uganda and Rwanda to jointly monitor goods from loading to destination. This is aimed at improving safety and promoting fair terms of trade by eliminating cargo theft. Initially Mr Ssewankambo was sceptical about the system, referring to the gadget as a mulika mwizi. Translated loosely, mulika mwizi is a Kiswahili phrase meaning to shine a spotlight on the thief. But he is now accustomed to having the little gadget on his truck. “When this device is fitted, you are under watch. Even a two-minute stop to relieve yourself is enough to earn you a call from the monitoring agents in Nairobi and Kampala,” he said. “Initially, the process was cumbersome. But I am now used to it and I feel safer.” On this day, his truck is full of used clothing which authorities say carry a high risk of diversion into the Kenyan market. Important information The electronic gadget is attached...

harmonisation of the microfinance sector policies in East African Community (EAC) will improve financial inclusion, ensure efficiency and support poverty eradication efforts across the bloc, according to the Association of Microfinance Institutions in Rwanda (AMIR). Jean Pierre Uwizeye, the senior programmes manager at AMIR, said the law will also ease market entry for MFIs across the region, noting that it calls for mutual recognition by EAC sector regulators to enable MFIs to operate freely across the bloc without any restrictions. “For instance, if a Ugandan-registered MFI wants to operate in Rwanda, the National Bank of Rwanda, as regulator, will facilitate its entry because the draft policy provides for recognition of certificates and licences from member states,” he added. Uwizeye was speaking to The New Times on the sidelines of a consultative workshop on the EA microfinance draft policy last week in Kigali to get the views of local stakeholders to enrich the final draft of policy before it is presented before the regional assembly, EALA. The regional consultation exercise covered Kenya, Tanzania, Rwanda, Burundi and Uganda. The draft policy recommends interventions like liquidity gaps in the sector and policy actions whereby regional governments and the EAC secretariat will seek to institute funding mechanisms to support groups like the youth and women. “Generally, the draft law reinforces the current thinking in Rwanda and among the local microfinance stakeholders represented by AMIR. Otherwise, we are happy for the opportunity to contribute to EAC microfinance policy framework formulation and efforts that aim at...