Among optimists, the proposal by East African Community (EAC) member states to ban the importation of used clothes by 2019 is great because it could spark the growth of a local textile industry in the bloc. But pessimists say the move will complicate the region’s trade arrangements with leading partners including the U.S. which is also a large exporter of used clothes to the region. It could also increase the cost of clothes in countries where the majority of the population is poor and lead to the import of new cheap clothes to out-compete the very industries the regional governments seek to protect. Faced with these options, some business analysts are proposing a middle-ground that reflects the status quo. They say the region is better off allowing entry of used clothes as it also develops its own textile industry. “As a region, there’s need to allow entry of any products provided there  are no illegalities in the sale of those items on our markets while at the same time boosting  their  production locally,”  said Charles Ocici, the executive director at Enterprise Uganda, a USAID-sponsored agency for equipping skills to small and medium firms. He suggests a co-existence of used and new clothes in the regional markets and the use of taxes to ensure fair competition between them. That way, Ocici says, the burden of the ban will not only be felt by the poor but by all clothing consumers, who will, in turn, buy the locally made clothes. He added...

Plans to harmonize East Africa mobile tariffs to create a single mobile network face hurdles as some nations fear that their telecoms could suffer losses, officials said on Monday. Communication Authority of Kenya Director General Francis Wangusi told Xinhua in Nairobi that once a country is not sure of the consequences of the one area network, it needs to be conscious not to find itself making a mistake. Wangusi said that one of the things hindering the adoption of the single network is the fear of illegal termination of international traffic purporting to be local calls. "We are already experiencing cases where calls from outside East African Community (EAC) are being illegally terminated locally and then relayed as a local calls and this is denying revenues to local telecoms," he added. The one area network was introduced in 2014, but so far only Kenya, Uganda, Rwanda and South Sudan have joined the single network. Other EAC member states such as Burundi and Tanzania are not yet part of the network that seeks to ensure that all intra-EAC calls are treated as local calls. The regulator is seeking to purchase a device management system to monitor its network so as to prevent the illegal termination of internationals and raise the credibility of the single network. Wangusi said that EAC partner states are set to have a meeting towards the end of month in order to discuss ways to overcome the challenges. Source: Xinhua Net

Chinese firm Erdemann Property Ltd’s plan to construct an industrial park in Mavoko has moved a step forward with the submission of an environment impact assessment report to National Environment Management Authority (Nema). Erdemann is proposing to develop the park on Mombasa-Namanga road interchange, Machakos County. The property firm wants to construct 53 go-downs, gate house, power services buildings, office block, waste water treatment plant, landscaped gardens, drive ways and parking spaces and, ancillary facilities “Nema invites members of the public to submit oral or written comments within 30 days from the date of publication of this notice to the director-general to assist the authority in the decision making-process for this project,” Nema said in a public notice published yesterday. The firm’s first commercial and industrial property development Erdemann Industrial Park A is situated in Mlolongo town and was opened in 2005 The property comprises 15 go-downs covering a build-up area of 12,000 square metres. The property is leased to tenants on a long-term basis. In 2009, the firm also opened another park in Mavoko (Erdemann Industrial Park B) which comprises 24 units of go-downs. Of late satellite towns like Syokimau, Mlolongo, Limuru, Thika and Ruiru have been attracting new industrial park developments, unlike the traditional zones of Industrial Area, Mombasa Road and Embakasi. Source: Business Daily

Kenya’s tea export to major destinations registered a major decline in volume, even as the country continued over relying on traditional buyers that account for more than 85 per cent of the country’s market. Industry report from Tea Directorate for May indicates there was a decline in quantities imported by major buyers, except for Pakistan, compared with the same period last year, partly driven by low production. Egypt, which is the second largest buyer of Kenya’s tea, registered a 61 per cent fall to 3.5 million kilogrammes in May this year from 9.2 million kilogrammes in the corresponding period. “The total export volume for May was 28.05 million kilogrammes compared with 43.36 million kilogrammes recorded in the same period last year, representing a 35 per cent decrease,” says the report. “The Pakistan market recorded higher tea imports from Kenya while other markets recorded lower imports,” the report adds. The United Kingdom, a major buyer of the Kenyan beverage registered a 51 per cent drop compared with last year. The quantities imported dropped from 4.1 million kilogrammes to two million kilogrammes in May. Pakistan was the leading export destination for Kenyan tea having imported 11.36 million kilogrammes during the month, accounting for 40 per cent of the total export volume. The ten export destinations, most of which are traditional markets for Kenyan tea accounted for 86 per cent of Kenya tea export volume. During the month, Kenya tea was shipped to 39 export destinations compared with 45 destinations last year. Key...

President Uhuru Kenyatta Thursday directed the Kenya Revenue Authority to allow the Shimoni Port in Kwale County to operate around the clock. "We want this to be a major fishing port apart from just bringing in goods," he said. Locals had complained that they were unable to effectively trade on the Kenya-Tanzania border due to time constraints. Shimoni Port is the major link between the area and parts of northern Tanzania, including the islands of Pemba and Zanzibar. Entry point However, the port is said to be a major entry point for contrabands and KRA has been strengthening surveillance at the facility. The President said design work for expansion of Shimoni Port was on. "We want this to be a major fishing port apart from just bringing goods," he said. President Kenyatta, who is campaigning in Kwale along with deputy William Ruto, also asked residents in Lunga Lunga to support and vote for Jubilee in the August 8 elections. "This time we should walk together to end poverty and create jobs for youth," he said. Built roads He said his administration has built roads, increased electricity connectivity and water supply and also issued land title deeds to locals. He said more than 40,000 title deeds had been issued to residents in the county. He said the Jubilee government was keen on implementing free secondary education from January next year. "The work of parents now is to deliver and take care of the child," he said. Source: Business Daily

The East African Community is in the process of signing an economic partnership agreement with the European Union. So far, only Kenya and Rwanda have signed the agreement. Burundi is reluctant to sign the agreement in the wake of economic sanctions imposed on it by the EU. Meanwhile, Tanzania has commissioned a study on the effects of signing the agreement on the region. Uganda has stated that it will sign the agreement only if all the EAC member states reach a consensus, which seems difficult at this stage. However, of interest are the possible effects of such an agreement on the region as highlighted in the study commissioned by Tanzania. The research seems to conclude that it is not advisable for the EAC to sign the agreement due to a number of negative effects including the danger posed to local industries and reduced revenue from tax. The effect of the agreement, according to the study, is that it will open up the market to cheaper imports from the EU therefore posing danger to local industries. Furthermore, due to the reduction of taxes on such imports, revenue will be less. These are some of the reasons highlighted against the agreement. However, Kenya and Rwanda have signed the agreement as it gives them access to more markets. While I have not looked into the economic impact of such agreements, I believe that EAC member states can resort to using domestic laws to protect the local industry from whatever harmful effects that may...

As Kenya's general election beckons the race has effectively narrowed down to two horses. Either, opposition leader Raila Odinga , or incumbent Uhuru Kenyatta will be Kenya's president after August 8. The bid for State House has attracted eight presidential contenders in total. But in recent weeks the focus has shifted to Odinga's National Super Alliance and Kenyatta's Jubilee Party, both of which have recently unveiled their manifestos. While the manifestos look good on paper, depending on one's political leaning, they are unlikely to have a significant impact on how Kenyans will cast their votes. The majority of the electorate have already decided on their preferred candidate. Most will vote on the basis of their tribal affiliations. The latest polling by Infotrak shows that only 8% of Kenyans are undecided on which presidential aspirant to vote for. Despite the fact that party manifestos will not shift voting patterns, they do provide a policy snapshot of what the parties would prioritise were they to form the next government. The fact that neither the Jubilee Party nor the National Super Alliance manifesto takes much account of relations between Kenya and its peers in the East African Community, is noteworthy. And disturbing. A study of the two manifestos shows that neither has a coherent plan for regional integration. This should concern Kenyans, as well as the country's neighbours. Relations between Kenya and its neighbours aren't as they could be. A few months ago cabinet secretary for foreign affairs Amina Mohamed accused Kenya's neighbours of not backing her candidature for the chairmanship of the African Union commission. Uganda openly disputed...

The cost of transporting goods has dropped by over 30% for Uganda destined goods A delegation from Uganda to the World Trade Organisation in partnership with Trade Mark East Africa (TMA) has impressed Swiss investors with how efficient Uganda’s borders during a  a side event on Trade Facilitation on the sidelines of the Sixth Global Review of Aid For Trade in Gevena. The objective of this session was to show the extent to which Uganda with the support of TMA had undertaken deliberate and strategic moves to ease the cost of doing business. Amelia Anne Kyambadde, Minister of Trade, Industry and Cooperatives together with Frank Matsaert, Chief Executive Officer of TMA were on the panel to show case the One Stop Boarder Post (OSBP) in Busia. A live link connection was done to feed directly into the panel discussion to an audience of over 500 trade facilitation enthusiasts. A video highlighting the OSBP processes at Busia was showcased. The three-minute video highlighted: the One Stop Border Post; the Authorised Economic Operator (AEO) Scheme; and the Regional Electronic Cargo Tracking System. During the discussion, the Kyambadde fielded several questions moderated by Matsaert on why the OSBP; the challenges that obtained before; and the benefits of the OSBP in terms of cost reductions with regard to movement of cargo and clearance of goods. Matsaert observed that TMA’s efforts to facilitate trade in East Africa had focused on removing bottlenecks and improving efficiency along the main transport arteries. He noted that, after the...

Plans to extend the standard gauge railway (SGR) from Naivasha to Kisumu have started taking shape after the State submitted an environmental impact assessment report. The Kenya Railways Corporation (KRC) is seeking approval for the project that will cost about Sh370 billion ($3.59 billion), funded by the Exim Bank of China. The 255km-line is the third phase of the SGR, that is set to push the total cost of President Uhuru Kenyatta’s administration pet project to Sh847 billion. “The proponent Kenya Railways Corporation is proposing to construct a 255 km SGR track between Naivasha and the proposed Kisumu Port,” an audit submitted to the National Environment Management Authority (Nema) reads. “This project is phase 2B of the ongoing SGR construction and will cut through four counties, namely Narok, Bomet, Kericho and Kisumu.” Even though the SGR is targeted to be built up to the border town of Malaba, experts say linking Kisumu port to Mombasa is seen as an early landmark as it will allow cargo to be transported over lake Victoria to other East African states, making the SGR a more viable economic project. For decades, Kisumu port registered robust business activity helped by a reliable railway system and maritime vessels that ferried cargo to ports such as Mwanza and Bukoba in Tanzania and Jinja and Port Bell in Uganda. Lake port Construction of a lake port is planned on the shores of Lake Victoria in Usare village, boosting trade with Kenya’s regional neighbours via Uganda’s Port Bell, Tanzania’s Mwanza Port...

Civil society organizations have backed the East African Community (EAC) heads of states to ban the importation of secondhand clothes in order to build the capacity of cotton and textile industries within the region. “It is important that the decision by the heads of states to phase out secondhand clothes be supported in order to enable the EAC in general and Uganda in particular grow and enhance her local production capacity,” said Faith Lumonya. She is the programme officer of Southern and Eastern Africa Trade Information and Negotiations Institute (SEATINI). With specific reference to Uganda, the group argued that Uganda National Textile policy value chain analysis indicates that with added capacity at spinning, weaving and finishing stages, more revenue can be generated and more jobs could be created internally beyond the 2.5 million across the value chain. “As such, the EAC can implement measures to phase out secondhand clothes so as to boost her domestic industries,” the civil society groups told the media in Kampala. On February 20, 2015, the EAC heads of states directed the council of ministers to study modalities for the promotion of textile and leather industries in the region and stopping the importation of used clothes, shoes and other leather products from outside the region. This decision arose out of the need for the EAC to advance a market-driven integration by boosting manufacturing and industrialization; promoting forward and backward linkages and achieve structural transformation through high value addition and product diversification as stipulated in the EAC...