Travel within Africa is not easy, it is expensive and often frustrating. The regional blocs have been working on travel agreements, particularly air travel to facilitate easy travel, but the high cost of tickets and airport taxes are making travel still expensive and out of reach of many citizens. But the East African Community (EAC) is taking a giant step to make travel within the region cheaper by classifying air travel from one country to the other domestic. A report by the East African says by the end of 2017, flights between countries in the region will be classified as domestic. The benefits will accrue to travellers because, according to the report, it will lower the price of air tickets and increase the number of air passengers. “The change will see the price of air tickets drop by up to 12 per cent across the region, with domestic flyers charged a service fee of $5, compared with the $50 paid by international passengers,” it said. While it is easier and cheaper to travel from Kenya to Rwanda by air, it is practically impossible to travel from Ghana to Benin in West Africa. The EAC region is ahead of all the other blocs in Africa towards achieving integration. A 2016 Africa Regional Integration Index – which measure progress on regional integration, ranked the EAC the number in Africa. On the Index, the EAC came first with a score of 0.540, followed by the Southern African Development Community (SADC) which scored 0.531, and ECOWAS...

The year 2016 had a number of shocking global economic events, notable among which was the British exit from the European Union famously termed as the Brexit. This development came from a shock referendum whose results defied the predictions of many professional pollsters. There are several economic issues that informed the majority decision. To the British, it is those economic issues that seem to have made the EU seem more of a baggage than a benefit to them. Given that the East African Community (EAC), is an economic bloc built along similar tenets like the EU economic bloc, one needs to ponder whether such economic issues exist and could, therefore, potentially affect the EAC. Only taking early lessons and any appropriate corrective measures by the EAC member states would avert a future EU-Brexit situation in another economic bloc such as the EAC. The most visible 'Brexit' impact on the EAC was the fall in the value of the Pound Sterling. The Pound was massively sold off, which resulted in a rough 7 per cent decline relative to the Ugandan Shilling. For example, around June 2016 before the vote, the Pound was selling averagely at Shs4,884 and a week after the referendum, it was selling at an average of Shs4,483. The positive effect of the decline in the value of the Pound was to reduce the cost of studying and travelling to the UK. However, it made imports in Britain from the EAC such as flower cuts, vegetables and coffee less...

There has been a lot going on lately about the business climate in the region and the efforts necessary to locally make it more hospitable. Last week saw ministers from 26 African countries conclude a meeting in Kampala on Tripartite Free Trade Area (TFTA). Preceding this was the East African Manufacturing Business Summit in May in Kigali. The city also played host to the Common Market for Eastern and Southern Africa (COMESA) meeting last week to track implementation of the Airspace Integration Project. In the meantime, with an eye beyond the continent, the EAC Sectoral Council of Ministers of Trade, Industry, Finance and Investment were in Arusha last month where they adopted the terms of reference of a comprehensive cost-benefit analysis of the region’s trade with third parties. The first thing to note is that the TFTA brings together COMESA, EAC, and the Southern Africa Development Community (SADC). The other thing to note is the signing on of South Africa to be part of TFTA, which added the country’s heft to the free trade area’s viability. No matter that only Egypt has ratified it, with a minimum of 14 countries required to ratify the TFTA for it to become operational. The joining of South Africa, with Mauritius and Botswana expected to sign on in short order, means that the long held dream of Africa being able to trade with itself has taken another important step towards a Continental Free Trade Area. However, to this, the recent East African Business Council...

East African states once again missed the middle-income economy status by the end of June milestone, with per capita income of between $3,956 and $12,235. Data released by the World Bank recently shows that Kenya is the only country in the region that got close to becoming an upper middle-income economy. Its economy was rebased two years ago, branding it a lower middle-income country. Tanzania, Somalia, South Sudan, Uganda, Rwanda Burundi and Ethiopia are still classified as low-income, with gross national per capita incomes of below $1,045. Kenya has been ranked as a lower middle income economy with per capital of between $1,006 to $3,955, in the same category with Congo, Nigeria, Sudan and Egypt. Angola is one of eight countries in the world and the only African country that has moved from upper middle-income to a lower-middle income. Angola’s drop is a reflection of the structural economic shocks the country has faced as a result of the decreased oil prices and commodity prices in general. Individual governments in East Africa have been struggling to meet key growth targets under their long-term development blueprints in efforts to achieve middle income economy status. Kenya has Vision 2030, Uganda has formulated Vision 2040, Tanzania Vision 2025, Burundi Vision 2025 and Rwanda has Vision 2020, but there are plans to align all of them to the EAC’s Vision 2050. Though East African governments have laid down elaborate visions for their countries, the pace of execution remains largely unco-ordinated and execution has been relatively...

Rwanda, Tanzania and Uganda say their stance to phase-out used clothes imports should not result in their ejection from the US preferential trade programme. Senior officials from the three East African Community (EAC) countries, in Washington Thursday, opposed the move by a US trade lobby to restrict their eligibility status for the African Growth and Opportunity Act (Agoa). The Secondary Materials and Recycled Textiles Association (Smart) filed a petition with US trade authorities in March urging that the three countries, along with EAC member Kenya, be deemed ineligible for Agoa's allowance of duty-free textile and apparel exports to the US market. Lawrence Bogard, Smart's lawyer, said during Thursday's US government inquiry that the association's member companies would suffer major losses in jobs and revenues if the EAC ban on used-clothing imports is fully implemented. Partial loss Mr Bogard also argued that Kenya should be included among the EAC countries facing partial loss of their Agoa benefits. Top US trade agency had announced last month that Kenya would be spared review of its Agoa eligibility. The decision was said to be based on “recent actions Kenya has taken, including reversing tariff increases, effective July 1, 2017, and committing not to ban imports of used clothing through policy measures that are more trade-restrictive than necessary to protect human health.” But the Smart lawyer argued that Kenya ought to be included in the Agoa eligibility review until Nairobi clarifies its commitments. Smart specifically seeks confirmation that Kenya's reported imposition of minimum tariffs on containers...

Tanzania, Uganda and Rwanda are defending their decision to raise tariffs on imported secondhand clothes, saying it is based on current value, trade realignment and that —for Rwanda— it’s a one-off. The three countries are reacting to calls by a US business association to restrict their eligibility for the Africa Growth and Opportunity Act (Agoa). Together with the East African Community Secretariat, they have written to the panel of the out-of-cycle review, comprised of representatives of six US government agencies: the Departments of Commerce, Labour, Treasury and State, as well as the US Agency for International Development and the Office of the US Trade Representative. The review could decide if the three countries should lose some of the benefits of Agoa. Tanzania and Uganda, in their submissions, insisted that the doubling of levies on imports of used clothing, from $0.20 to $0.40 per kilogramme, was for realignments with the current value. Tanzania’s Trade Permanent Secretary Adolf Mkenda said increase or decrease of tax, duties and fees is a fiscal decision, which is implemented as part of annual fiscal measures. Tanzania also argued that the EAC decision to phase out importation of secondhand clothing and leather is yet to be implemented, meaning claims about loss of jobs by the Secondary Materials and Recycled Textiles Association (Smart) cannot be justified. “There is no scientific proof that changes in the trade pattern and other macroeconomic variables, including jobs and shipping were caused by the EAC decision as pointed out in the petition and...

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...

Twenty-six African countries are rapidly moving towards finalising a preferential trade agreement which will open up significant opportunities for South African exports. The countries being integrated into a tripartite free trade area (TFTA) — seen as a critical driver of regional integration on the continent — have a combined population of 625-million people and a total GDP of $1.6-trillion. Once the tariff negotiations are finalised, the TFTA will offer exporters preferential or zero tariffs into the markets of member countries. Department of Trade and Industry deputy director-general of international trade and economic development Xolelwa Mlumbi-Peter notes that this preferential access will provide better terms of trade than are currently enjoyed. "It means that we will be able to increase our exports and advance a developmental integration agenda and the development of regional value chains, as it would be cheaper, for example, for SA to import inputs from African countries." Currently, intra-regional trade on the continent is very low. Trade Law Chambers director Rian Geldenhuys said the progress made with the TFTA was "fantastic" and would offer huge opportunities for South African businesses if implemented, particularly as the Southern African Development Community (SADC) was largely dysfunctional in terms of the implementation tariff agreements. At this stage, the TFTA agreement consists only of the legal framework with detailed negotiations on tariffs for the different products still to be finalised. Non-tariff barriers and infrastructural blockages will be addressed at a later stage. The TFTA agreement which SA signed in Uganda last week is...

One of the issues raised by National Super Alliance (NASA) flag bearer Raila Odinga is whether the setting-up of the Naivasha dry port will kill the Mombasa Port and the county’s economy. Raila, while speaking at a campaign rally in Kwale County, was emphatic that the proposed Naivasha dry port will result in the death of the port of Mombasa since, through the Standard Gauge Railway, all the containers will be transported to Naivasha using the railway. His sentiments were echoed by Mombasa Governor  Hassan Joho who has repeatedly stated that many people will be left jobless in Mombasa as major services like clearing and forwarding will be done in Naivasha at the expense of the coastal people. The question that arises is: What is a dry port? A dry port, which is sometimes called inland port, is an inland inter-modal terminal directly connected by road or rail to a seaport and operating as a centre for the transhipment of sea cargo to inland destinations. In short, a dry inland port speeds up the flow of cargo between ships and major land transportation networks, creating a more central distribution point. Further, inland ports improve the movement of imports and exports, moving the time-consuming sorting and processing of containers inland, away from congested seaports. The Mombasa Port activities are not being transferred to Naivasha since the region does not border the Indian Ocean. Just like the Embakasi dry port, the Naivasha facility will provide storage of cargo especially those destined for...

The World Trade Organization issued the text of the following remarks by Director-General Roberto Azevedo: "Good morning everybody. "Welcome to the WTO and to the 2017 Global Review of Aid for Trade. "It's great to have a full house for this very important event. I am sure we will have some dynamic and fruitful discussions over the coming days. "To start things off, we have a fantastic line-up this morning. "I am pleased to be joined today by: * "the Vice President of the Gambia, Fatoumata Tambajang, * "OECD Secretary-General, Angel Gurria, * "UNCTAD Secretary-General, Mukhisa Kituyi, * "the CEO of the International Islamic Trade Finance Corporation, Hani Salem Sonbol, * "Executive Director of the International Trade Centre, Arancha Gonzalez, * "and Senior Director at the World Bank, Anabel Gonzalez. "This is one of the biggest Global Reviews so far. "We have more than 1,500 delegates taking part from around the world. "More than 20 ministers. "And leaders from a range of international organizations. "Thank you all for joining us and for making the journey to Geneva. It is a great pleasure to host you this week. "Excellencies, "Ladies and gentlemen, "17 years ago, world leaders came together to pledge to halve extreme poverty by 2015. "They met that goal - and they did it way ahead of schedule. It remains one of the most astonishing achievements of our lifetime. And trade helped to drive much of the growth and development that led to that success. "Then, two years ago, just after the last Global Review, world leaders came together again. This time they pledged to...