The construction of the Ugandan stretch of the Standard Gauge Railway (SGR) has been the subject of speculation with talk implying that Kenya will only stop in Kisumu. Kisumu is about 100Kms from the Kenya – Uganda border town of Malaba. Kenya is about to clinch financing for the Naivasha-Kisumu link. There has been speculation that Kenya will only stop at this point. However, Mr James Macharia, the Kenyan Cabinet Secretary for Works insists that Kenya has no intention of terminating the SGR in Kisumu. “We’ve agreed that we need to sit with the financiers and have these joint commitments that we’ve agreed upon. That way, the issue of a hanging railway – Kampala to Malaba or Nairobi to Kisumu – will be no more. It will be a joint seamless connected railway. We must synchronise the completion of the project. In terms of viability, we see it as one project - A to Z -, initially being Mombasa to Kampala,” he told reporters last week. Last week, the SGR cluster of the Northern Corridor Infrastructure Projects (NCIP) met in Kampala and on the sidelines, the Works ministers for Uganda and Kenya issued a joint statement on the project. The financiers of the project, EXIM Bank of China, are said to only be considering granting Kenya more financing for to Kisumu, only if there is a commitment to reach Malaba. “The commercial contract up to Naivasha has been signed but the application has not yet gone to China. Once that...

The past few weeks had been a surprise for Kassim, a worker at Fort Jesus, as the UNESCO’s World Heritage Site in Kenya’s coastal city of Mombasa saw an increase of visitors in a usually low season. Francis, a reservation official with Voyager Beach hotel, which sits on rocks overlooking the Indian Ocean, told Xinhua that “the hotel recorded 10 more reservations each day on average from the figures in May.” All this is attributed to the launching of the Mombasa-Nairobi Standard Gauge Railway (SGR) train service on May 31. Kenyan President Uhuru Kenyatta launched the modern train dubbed Madaraka Express to replace a century-old locomotive nicknamed “Lunatic Express” that was introduced by British colonialists to link Mombasa and the resource-rich hinterlands. The passenger service of the 480-kilometers line, built by China Road and Bridge Corporation, has caused quite a stir in the Kenyan society given its exemplary service. Recent media reports indicated that Kenyans have been scrambling for tickets to travel from Nairobi to Mombasa and vice versa using the SGR train whose speed and comfort is unrivalled by the old trains or the inter-city buses. Since first week in service, local dailies have reported that SGR train tickets have been sold out at unprecedented rates in both Nairobi and Mombasa terminus. Images of excited passengers enjoying the SGR train ride have dominated evening news bulletin in local television stations. Nearly 12,000 passengers had traveled on the newly launched SGR in the week ending June 7, according to operators,...

As you take on the mantle, what key areas are you focusing on to ease doing business in the region? One of the issues I want to look at is harmonising domestic taxes and free movement of persons. We want to see Ugandan workers, Tanzanian workers or Burundian workers seeking temporary employment crossing the borders to any of the member states freely. But this has not been happening and it is inhibiting the principles of the Common Market which seeks for free movement of services, free movement of persons and free movement of capital. But we also want to see the EAC partner states harmonise the laws to control illicit trade in the region. The laws are taking long yet we want them to be done very fast to improve trade in the region. Illicit trade has continued to affect industrial growth in the region going by substandard and counterfeit goods and products clogging our market. What is stalling these processes? The East African Community (EAC) is an independent organ and we have no capacity to push them to do things according to the speed of the private sector. Private sector is profit oriented and we want to see things done yesterday, not or tomorrow. We are now involving Heads of State in the challenges we are facing in doing business so that decisions are made quickly. How are you going to boost intra-regional trade as a Council? I am glad to mention that intra-regional trade is booming among the...

In recent days, the big story in the East African region has been the US threat to withdraw export benefits enjoyed by Tanzania, Kenya, Rwanda and Burundi through what is popularly known as Agoa. Agoa is the acronym for "African Growth and Opportunity Act", backed by a law passed in 2000 in the US to provide a window in which tax-free products would be exported to the US domestic market from Agoa qualifying countries in Africa, including those in our East African Community bloc. For countries which fully utilised the opportunity, Agoa benefits have been immense. Kenya, for example, has so created nearly 70,000 Agoa-related jobs and in 2016, it exported to the US products valued at Sh867 billion, eight times more than the combined exports of Sh100 billion by Tanzania, Rwanda and Burundi. The Agoa Act has thus been a signature trade deal between the US and African fledgling economies. With another extension of the benefits in the last term of President Obama's presidency, the Agoa deal was expected to continue. But now things are changing. A powerful US trade lobby group wants Agoa benefits for EAC withdrawn and have petitioned President Donald Trump to kick the EAC out of the arrangement. The lobby group is targeting Tanzania, Rwanda and Burundi because of their decision to phase out importation of second hand clothes and shoes. Kenya is spared because it has rescinded on the EAC agreement to ban "mitumba" or impose huge taxes on such imports. The US lobby...

In line with what was reported last year, there continues to be a noticeable disparity in performance between the two core trade corridors of East Africa. Container trade in the Northern Corridor, which serves Kenya, Uganda, South Sudan and parts of Rwanda, expanded by 1%, whereas the Central Corridor, serving Tanzania, parts of Rwanda, Burundi, Zambia, Malawi and DRC, saw a contraction of 12%. This is according to Steve Felder, Managing Director at Maersk Line Eastern Africa – a member of A.P. Moller–Maersk – who says the 2017 First Quarter East Africa Trade Report issued by the company reveals that aggregate trade levels in the region have improved slightly since 2016, resulting in overall year-on-year growth of 1%. “While conditions in the East Africa region have continued to be challenging due to political instability, ongoing macro-economic headwinds and drought conditions affecting certain countries, we’re seeing healthy competition between the two corridors, both fighting for position in terms of some of the ‘swing’ countries that could export or import cargo through either corridor, specifically Rwanda, Burundi, Uganda.” The Northern Corridor While the Northern Corridor (serving Kenya, Uganda, South Sudan, and parts of Rwanda) import market experienced year-on-year growth of 6% in the first quarter, it declined slightly (by 1%) from the last quarter of 2016, says Felder. “In Kenya, liquidity is still very tight, caused by last year’s interest rate capping on the bank lending rate. In the next quarter we are expecting to see a slowdown in the import market...

Ethiopia's move and interaction on the economic fronts has not been as anticipated as its contribution and influence on the continent politics and peace building efforts, scholars argue. Scholars argue that owing to the ever growing economy of the county and market the country need to focus on Africa market as well, according to a report filed by Addis Zemen daily. According to 2016 African Development Bank Report, Benin, Botswana, Côte d'Ivoire and Senegal are the leading countries for their market supply to other African countries. Ethiopia and other African countries have the lowest share in this regard. Africa's GDP has reached over 5.8 trillion USD, registering on average five per cent growth and predicts to reach 29 trillion USD by 2050. The same report indicated that the African foreign trade volume has grown by 200 per cent. Having such growth and market potential, the share of Ethiopia is very much limited, according to scholars. Jimma University Economics Lecturer Dr.Wondaferahu Mulugeta said Ethiopia's trade relations with African countries is very much low. He attributed similar products, lack of infrastructure connectivity with African countries to the reason for low level of the trade relations. According to him, industrial parks and agro processing factories are expanding. The FDI is also increasing. The government is also working to be hub of the light and medium manufacturing in 2025. He said against this backdrop the African market would be essential for Ethiopia in the coming couple of years. President of the Pan African Chamber...

Kenya has withdrawn a proposed ban on used clothes by the East African regional bloc after threats by the United States to review trade benefits to specifically Rwanda, Tanzania, and Uganda.   Kenya’s Trade and Industrialization Principal Secretary Dr Chris Kiptoo said the country had decided to comply with the African Growth and Opportunity Act (AGOA) conditions, reports web portal The East African. “When we saw the petition filed in March, we knew that the lobby group had strong arguments,” he said. Kenya, Uganda, Rwanda, Burundi, Tanzania and South Sudan decided to fully ban imported second-hand clothes and shoes by 2019, arguing it would help member countries boost domestic clothes manufacturing. As signatories to the AGOA trade programme which offers them duty-free access to the United States, their decision violates the conditions including eliminating barriers to U.S. trade and investment, among others. The U.S. Trade Representative said last Tuesday that it was reviewing trade benefits to the three countries in response to a petition filed by a United States body that complained that the ban “imposed significant hardship” on the U.S. used-clothing industry. Rwandan President Paul Kagame has stated that his country will proceed with the ban on used clothes and will choose to grow its local textile industry at the expense of being a member of the AGOA. This is the choice we find that we have to make. As far as I am concerned, making the choice is simple, we might suffer consequences. Even when confronted with difficult...

The East African Community (EAC) leaders were on Tuesday urged to pool together and initiate dialogue with the Burundi leaders to end the stalemate in the country. Deo Hakizimana, President of the Independent Centre for Research and Initiatives for Dialogue (CIRID), a Geneva-based civil society organization, called on leaders of the regional bloc to work together to solve the stalemate through dialogue to save citizens from suffering. "The EAC is a respected strong bloc hence the need for the leaders in the region to strongly come out and engage the Burundian leadership and the opposition in solving the long standing misunderstanding in the country," Hakizimana said in Nairobi during the launch of Macky Sall Prize for Dialogue in Africa (PMSDA) in Kenya. The tiny central African nation has been in the midst of a political crisis since President Pierre Nkurunziza decided to run for a controversial third term earlier in April 2015. Since then several people have been killed, with the toll possibly considerably higher, and 250,000 have fled to neighbouring States with many others internally displaced. The UN has warned of a relapse into full-fledged civil war, calling the government to take all necessary steps to disarm pro-government militias and bring operations of the police, intelligence services and other security forces under the mantle of the law. The Burundi diplomat, who has been involved in peace initiatives, said that Africa is not rich in resources alone but has a wide range of bright people that could help solve internal...

The U.K. government unveiled plans over the weekend to replicate current European Union-negotiated trade terms with the poorest 48 countries after it leaves the bloc, signaling the first major milestone for Secretary of State for International Development Priti Patel’s pledge to put post-Brexit trade at the center of her department’s new economic development strategy. The announcement commits to maintaining the current quota-free, duty-free trade access to the British market currently enjoyed by the poorest 48 countries through the EU. The government also announced it intends to maintain current trade advantages for other developing countries and, in some cases, to “explore options to expand relationships,” although specific terms can only be announced after bilateral negotiations. The news falls in line with the Department for International Development's new economic development strategy, released in January, as well as its cross-government strategy, which commits to spending 30 percent of U.K. aid through departments other than DfID by 2020. It will likely mean a greater emphasis on some of the work DfID is doing around trade facilitation and through the CDC, the U.K.’s development finance institution, a DfID official told Devex. Rachel Turner, director-general of economic development at DfID, said the primary objective behind the announcement is to provide continuity for current and potential investors in the region. She emphasized some of the new strategies DfID is considering to promote better access to global markets. About 20 billion pounds ($25 billion) worth of goods are exported to the U.K. from developing countries every year, according to government statistics. “We...

The United States has raised concerns that future trade and investment deals with East African countries based on a continent-wide free trade agreement may be unrealistic due to their diverse interests. According to Washington, the differences could lead to a lowest common denominator agreement and consensus on the African Growth and Opportunity Act (Agoa) would be difficult. Last year, the EAC told the US that, in order to increase trade and investment between the two parties, the general outlook of post-Agoa should take on a development dimension based on trade facilitation and investment promotion as well as address supply constraints and improve the business environment in the region. “Future agreements with the US, post-Agoa, should be discussed at the continental level in line with the African Regional Integration Agenda,” said Beyond African Growth and Opportunity Act, a report of the meeting of the Sectoral Council on Trade, Industry, Finance and Investment held on June 2 in Arusha. “Special and differential treatment should be factored into any trade and investment agreement post Agoa, as well as development support, in order to enhance EAC capacity to trade with the US. Therefore, there may be a need to qualify reciprocity that would take into account the asymmetrical nature of the economies involved.” According to the EAC, although policy reforms can have a positive impact on the private sector and influence the global competitiveness of the region’s firms, future trade relations should not be made conditional on these reforms. Such agreements should focus on trade...