The East African Community regional integration process has seen the region register improvement in logistics performance which had stagnated in previous years, a World Bank report has said. The bi-annual report, ‘Connecting to Compete 2016: Trade Logistics in the Global Economy’, ranked 160 countries on their trade logistics performance as well as the region, identifying the challenges and opportunities. The report noted that the move by the East African Community nations to integrate into one bloc had elevated the region’s logistics performance, consequently making it more attractive for investments and reducing the cost of doing business. Among the most notable changes observed by the survey was the elimination of multiple barriers to trade and transport, such as cumbersome procedures. “The Northern Corridor was once known for multiple barriers to trade and transport, including lengthy dwell times at Mombasa port and cumbersome clearance procedures along the corridor. In 2012–13, the corridor countries started a series of reforms that significantly improved the logistics environment and drove down logistics costs,” the report’s authors observed. Integration, the report says, saw the establishment of a single customs territory, thereby tackling unbearable clearance procedures. “One of the reforms was to introduce Single Customs Territory clearance procedures within the East African Community, including Burundi and Tanzania. This means final customs clearances for free circulation can be made already at the port of entry in Mombasa. The system has significantly reduced administrative burden and shortened the time required for customs formalities,” the authors said. With the single customs...

Kampala — Cabinet has approved the ratification of the EAC-COMESA-SADC Tripartite Free Area Agreement (FTA), paving way for the implementation of the Agreement. In a Cabinet meeting that took place on Friday 4th August 2017, members unanimously agreed that Uganda was ready to start the implementation of the Tripartite FTA which will open up a wider market for Uganda's products and services in 26 African countries. The products for export will include agricultural products, sugar, tea, coffee and livestock products. The Tripartite FTA represents an integrated market of 26 countries with a combined population of 632 million people which is 57% of Africa's population; and with a total Gross Domestic Product (GDP) of USD$ 1.3 Trillion, contributing 58% of Africa's GDP.  This is a large area that provides expanded trade opportunities to Uganda's Private Sector. Appearing before Cabinet, Trade Minister Amelia Kyambadde said during the recent Tripartite FTA meeting that took place in Kampala in July 2017, the three regional blocs (EAC-COMESA-SADC) finalized and the adopted the remaining annexes on the Rules of Origin, Trade Remedies and Dispute Settlement, thus producing a full Tripartite Agreement. During the same meeting, South Africa signed the Tripartite Agreement, bringing the total number of countries that have signed to 19 out of 26. "Now that the Republic of South Africa has signed the agreement and is in the process of ratifying it, we see no reason not to ratify" said Kyambadde. Kyambadde says Uganda stands to benefit greatly from the Tripartite FTA given the...

The quantity of goods that Kenya sells to Tanzania has sharply reduced this year, indicating that a spat between the two countries is affecting cross-border business. The latest government data shows that Kenya's exports to its neighbour reduced by a third in the first five months of this year, a trend that is likely to be sustained throughout 2017 if efforts to resolve diplomatic and trade rows are not successful. Kenya National Bureau of Statistics (KNBS) data on the economy show that the value of the exports dipped by 33 per cent to Sh8.2 billion between January and May, compared to Sh12.5 billion last year. The two countries have historically held different positions on numerous issues, which has affected trade as well as movement of people across the border. This has in the recent past escalated, with the East African Community partners each banning the other's imports. The ministers of foreign affairs from the two countries last month agreed to lift the trade restrictions the countries had imposed on each other. However, the agreement was short-lived, with Kenyan manufacturers reporting that they have yet to gain access to the Tanzanian market and Kenyan universities being ordered to shut down their colleges in Tanzania. Among the products that have been banned from the Tanzanian market are milk and milk products and cigarettes. Tanzania is one of the largest export markets for Kenya and is the second largest in Africa after Uganda. According to the Kenya Economic Survey 2017, exports to Tanzania...

US President Donald Trump barely mentioned Africa or trade with the continent during his whirlwind campaign and has been mostly silent about the region since taking office. But the annual African Growth and Opportunity Act (AGOA) forum being held in the Togolese capital Lome this week will bring together top US officials and African ministers. The gathering will finally shine a light on Trump's policies toward the region of 1.2 billion people. What is the African Growth and Opportunity Act? It was a trade deal inked between the United States and eligible African countries nations under Bill Clinton's presidency and enacted in 2000. It gives 39 African nations duty-free access to the US market for about 6,500 products including textiles, cars, fruit and wine. Those countries permitted to participate in AGOA are obliged to prove that they are making efforts to improve human rights, the rule of law and worker protections. Is Trump getting involved in Africa? Early signs were not good for the 45th president's interest in trade with the continent. He spoke regularly on the campaign trail about the need to renegotiate the North American Free Trade Agreement and to get a better deal with China -- but Africa did not feature in his top priorities. But he has now sent his top trade negotiator Robert Lighthizer to Lome for the two-day meeting that concludes on Thursday along with a top level negotiating team. Trump himself will not attend the talks. A good deal for Africans? When asked...

The just ended 2017 election outcome, agriculture output, and inflation levels are set to determine Kenya’s second half year growth, a new insight by Bloomberg Intelligence Economist has revealed. Dubbed East Africa Insight, the analysis by economists Mark Bohlund also reveals that Uganda may expand faster than Kenya for the first time since 2011 amid stronger farming output. Based on the outcome of the election results, analysis Bohlund shows that if the opposition is granted victory, there are high chances that the GDP will grow. “BI Economics expects that an opposition victory would engender a more expansive fiscal policy in coming years than outlined in the 2017-18 budget, because of pledges to accelerate fiscal devolution and undertake structural reform” He said. The analysis shows that Kenya’s Gross Domestic Product growth fell to 4.7 per cent year-over-year in first quarter from 6.1 per cent in the preceding quarter, partly reflecting a 1.1 percentage point drop in agricultural output, the sharpest contraction since 2009. It also pointed out a 2.7 per cent month-over-month drop in food prices in June, the largest drop since 2010 as a cause for the GDP growth drop as compared to -3.2 per cent and -2.0 per cent drop in Rwanda and Uganda respectively. According to statistics from Kenya Bureau of Statistics, Uganda’s GDP data showed growth of 1.8 per cent quarter-over-quarter in first quarter, following a relatively robust expansion of 1.4 per cent in the fourth quarter. The growth was attributed to a 3.4 per cent rise...

The dry port to be set up in Naivasha is part of the northern corridor whose master plan aims to establish inland freight hubs to end congestion at the Port of Mombasa. The Mombasa port's total annual freight handling is expected to exceed 50 million tonnes by 2030, doubling from 24 million tonnes in 2015. The dry port is expected to reduce the overall cost of handling goods at the seaport, which faces cutthroat competition from the Port of Dar es Salaam. The purpose of dry ports the world over is not to drive existing mother seaports and inland depots out of business, but to complement them. Dry ports allow the provision of additional logistic services for the mother ports such as cargo consolidation, provision of additional storage space for both cargo and empty containers, as well as container cleaning, fumigation and light repairs. All these cannot be undertaken in congested seaports and inland container depots. The establishment of dry ports, therefore, relieves the stiff competition for space between cargo storage and clearing as well as customs activities at the seaports and makes them more efficient, neat and competitive. The proposed dry ports in Voi and Naivasha are therefore expected to complement the traditional cargo freight services at the Port of Mombasa and the inland container depots in Embakasi, Eldoret and Kisumu. The need for such ports is now urgent, following the commencement of SGR operations. In Tanzania, for example, the government aims at operating the internal container terminal at...

Kenya has agreed to allow wheat and Liquefied Petroleum Gas (LPG) imports from Tanzania following bilateral talks. According to a joint communique issued by the Kenya’s Ministry of Trade, the Tanzanian products had been prevented from entering Kenya due to a number of administrative issues. “Tanzanian LPG and wheat should flow without restrictions to Kenya with immediate effect,” the ministry said on Friday. Following consultations between trade officials from Tanzania and Kenya, the two governments undertook a fact finding mission on Thursday at the Namanga border Post to further follow up the progress made on the decisions of the Heads of State of Kenya and Tanzania to unlock the trade impasse. Kenya’s Trade principal secretary Chris Kiptoo said that regarding LPG imports into Kenya, the delay in the implementation of the directive issued on July 28 to allow free flow of LPG from Tanzania was due to an administrative challenge. He added that Tanzanian wheat imports were restricted from entering Kenya due to an existing East African Community legal provision. “Therefore, the 26 trucks currently stopped at the border should be released immediately since the legal lacuna has been resolved,” Kiptoo said. The statement added that a meeting of key stakeholders including wheat millers and farmers association should be held during the next bilateral meeting to agree on how to support wheat farming in the two countries. Source: New Times

The Kenya National Bureau of Statistics figures show that Kenya’s exports to Tanzania went down by 34 per cent in the first five months of the year, perhaps reflecting the negative effects of a trade war between them. Exports to the neighbouring country plunged by a huge Sh4.35 billion to Sh8.2 billion in the review period while Tanzania has been Kenya’s second biggest export market in the region after Uganda. A number of things are wrong in this whole standoff. One, the negotiations have been anything but transparent going by how one truce after another is ignored while senior officials in Nairobi report inability to reach their counterparts in the neighbouring country. But, two, and more important, the two countries ought to revisit the East African Community (EAC) integration ideals, which should be easy to pick out after many years of discussing the subject. While it’s expected that trade deals will be full of back and forth, such a longstanding disagreement is worrying for nations working on free  movement of goods, services, and people. Dar and Nairobi must sit at a table and iron out the differences, once and for all. We ask the two countries to dust themselves up and talk conclusively. Source: Business Daily

Kenya has moved to secure its Sh102 billion horticultural export market by establishing an agency to ensure adherence to standards and quality. The Kenya Horticultural Council (KHC) will ensure all processes from cultivation to chemical application, packaging, transportation and marketing comply with the newly introduced quality standards for flowers and ornamentals (KS1758 Part 1) as well as the fruits and vegetables (KS1758 Part 2) guidelines. The Kenya Flower Council (KFC) and the Fresh Produce Exporters Association of Kenya (FPEAK) welcomed the development saying it will boost confidence in local produce while helping improve the safety of produce. Acting KHC chairman Richard Fox said all fresh produce will be subjected to KHC scrutiny thereby curbing produce containing prohibited chemical levels. “KHC creates a single strong platform where all players will be held accountable. It will address common issues affecting the industry from numerous interceptions at the marketplace occasioned by a myriad factors...,” he said. Kenya Bureau of Standards MD Charles Ongwae said its quality management system will act as a reference point for all players thereby ensuring fresh produce sold locally and abroad is safe. Source: Business Daily

A senior US trade official on Thursday urged three East African Community countries to “revisit” their collective ban on used-clothing imports. Arguments in support of the ban put forward by Rwanda, Tanzania and Uganda “are not supported by data or research,” said Ms Constance Hamilton, acting assistant US trade representative for Africa. Ms Hamilton’s comments seemed to suggest that the Trump administration is siding with a US business association that claims the three countries are in violation of eligibility criteria for the preferential trade programme known as Agoa. The African Growth and Opportunities Act stipulates that participating countries must eliminate “barriers to US trade” or be making progress in that direction. The US-based Secondary Materials and Recycled Textiles Association (Smart) says the three-year phase out of used-clothing imports, commonly known as mitumba, amounts to such a barrier. Smart petitioned US trade officials in March to exclude Rwanda, Tanzania and Uganda from the Agoa provision. The three-year phase-out of mitumba jeopardises 40,000 jobs in the US recycled-clothing industry, according to Smart. Ms Hamilton cited that figure during a press teleconference on Thursday, and added that many of the threatened jobs are with small firms that have only “three or four employees.” Kenya had initially agreed to implement the EAC ban on mitumba, but rescinded the decision. Source: Daily Nation