Regional economies have allocated a third of their individual budgets in the new financial year to infrastructure projects, aiming to boost economic activity and spur growth. Of the $15.8 billion going to development projects, Kenya allocated $6.25 billion (39.5 per cent), followed by Tanzania at $5.3 billion, then Uganda at $3.05 billion and Rwanda at $1.28 billion. Kenya reduced its allocation from $7.4 billion in the 2017/18 fiscal year. Tanzania’s allocation increased from $5.27 billion in the year ending June 30. Uganda had set aside $1.32 billion, while Rwanda had earmarked $924 million for development expenditure last year. The projects range from airport upgrades to aircraft purchases, modernisation of road and railway networks, and energy generation. Tanzania says it will prioritise the construction of its Central Railway Line under the standard gauge railway project, for which it has budgeted $3.14 billion, with about half of it paid to the contractor. Kenya has allocated $747 million in the new financial year for the construction of Phase 2A of its SGR, from Nairobi to Naivasha in the Central Rift. Uganda is juggling between upgrading its metre gauge railway and initial work on its SGR, which is currently at the land compensation stage. Uganda Railways Corporation took over the operation of the metre gauge railway, after the termination of the Rift Valley Railways concession. Railway services on the Eastern Route resumed in February, and they reinstated the passenger rail service in the Kampala Metropolitan Area. Ugandan Finance Minister Matia Kasaija reiterated the country’s...

The Intergovernmental Authority on Development has adopted a regional policy framework on cross-border trade that promises to be a lifeline for the region’s small-scale traders. Trade ministers from Djibouti, South Sudan, Sudan, Uganda, Somalia and Kenya and a representative from Ethiopia meeting in Mombasa last Thursday signed a policy document seeking to strengthen border security systems, support trade facilitation at border crossings and promote participation of border and communities in policy making. The Informal Cross-Border Security Governance policy tackles issues related to food security, employment, peace and security in the region’s borderlands. Kenya’s Trade Cabinet Secretary Adan Mohamed said the initiative is expected to sensitise on cross-border trade among member states. “The beneficiaries are likely to be women and youth, and we are happy that today we have a framework that will recognise the socioeconomic contribution of informal cross-border trade within member states,” Mr Mohamed said. “It will also help us understand the linkages between cross-border informal trade and cross-border security,” he added. The policy document will be presented to the Igad Heads of State for onward transmission to the African Union. Mr Mohamed said that improving cross-border trade is one step towards the Continental Free Trade Area that the Heads of State signed in Kigali in March. Uganda’s Trade Minister Amelia Kyambadde said the policy will regulate the informal trade within Igad countries and provide an opportunity to grow the informal sector. HORN OF AFRICA SUMMIT TO DISCUSS CROSS-BORDER TRADE, SECURITY. “This policy will have an impact because every...

EAC countries have turned to tax incentives in a bid to boost industrialisation. Finance ministers from Kenya Uganda, Rwanda and Tanzania all presented their budgets on Thursday last week. The four countries also had one common theme; ‘Industrialisation for Job Creation and Shared Prosperity’. The budgets, however, took varied approaches to spur their growth agenda. The budget speeches showed how the governments planned to support and promote their priority areas. One common incentive was tax exemptions. For instance, neighbouring Tanzania is moving to support their local pharmaceutical industry by exempting tax on packaging materials produced specifically for use by products in the field. Experts say that among other things, this is likely to act as an incentive for investors and entrepreneurs in the sector. The Tanzanian Government also exempted tax on purchase of sanitary pads a move which gender activists have applauded saying it will significantly reduce the prices of the items. David Baliraine a senior Manager at Ernst and Young noted that the East African nation had also exempted taxes on government projects funded by non-concessional loans and also on agreements signed between the Government and a Financial Institution. This, he noted is a move geared at attracting more funding for projects being undertaken in the country. Baliraine was speaking at a breakfast meeting convened to analyse the budget for the firm’s clients and stakeholders on Monday morning. Exemption of imported animal and poultry feeds additives was also heighted in the new Tanzanian budget which points towards promotion of...

December 20 is the target to have at least 30 African countries to have ratified the African Continental Free Trade Area (AfCTA), members of the Senate heard on Tuesday. Updating the Senators on where Rwanda stands since it ratified the agreement in April, the Minister of Trade and Industry; Vincent Munyeshyaka said that though only 22 countries are required to sign before the agreement comes into force, the target is to have 30. Rwanda is the current chair of the African Union. “The threshold is normally 22 countries but we are targeting 30 by December. We know it’s ambitious but are hoping that by end of the July African Heads of State summit, we will have seen some improvements,” he said. So far, just four countries – Rwanda, Kenya, Ghana and Niger, submitted their instruments of ratification to Treaty to the African Union Secretariat in Addis, Ethiopia. If the 22-country threshold is met, it means the agreement, which intends to make Africa the largest trading bloc in the world, can get into force. Munyeshyaka said that to achieve this, he was lobbying other Ministers of trade but there was also support from the African Union Commission and the AfCFTA both which had their lobbying campaigns. He pointed out that all the concerned institutions were working tirelessly to create a continent that would be viewed as a global competitor on the world market. “To do that, we have to prioritize some things such as the service sector, beating non-tariff barriers and open...

An investor perception survey released Monday shows that Rwanda is a preferred destination due to the political stability and security. The investors also pointed out the country’s present market opportunity and economic trajectory as incentives that influenced their decisions to set up in Rwanda. The survey was jointly undertaken by the Rwanda Development Board and the World Bank Group, with support from the UK Department for International Development (DFID). The survey focused on a database of over 600 international firms built over time, across various target sectors. The findings also show that investors perceive Rwanda’s biggest challenges to be a limited market, skilled labour and high production costs. The perception of high production costs are linked to logistics, finance and energy especially for those in manufacturing and processing. Access to a skilled workforce was also found to be a cross cutting challenge. To address this, Lisa Kaestner, a practice manager for Finance Competitiveness and Innovation at International Finance Corporation said regional countries should take advantage of regional cooperation for cross border transportation and regional infrastructure projects. “I see Rwanda is keen on this and trying to support through the East African Community. This is one way to reduce the cost of doing business. If you look at it through the doing business lenses, all countries are trying to improve,” she noted. Experts also say that the costs of doing business can come down significantly if energy costs and supply are addressed adequately. Hamidou Sorgo, a senior private sector specialist at...

For a country like Rwanda, with no access to the continent’s massive water bodies, the cost of moving goods from ports in Mombasa and Dar la salam is very high. But yet still, the distance that exists between the country and the closest ports is long, hence a need for added facilities if trade in the country especially export is to be increased to more volumes. It is in line with this that Kenya Ports Authority is finding possible solutions to ease the movement of goods to Rwanda which is vital to boosting trade.  Today, the distance has been reduced and importers in Rwanda can clear their containers from the Inland Container Deport in Nairobi. William Ruto the GM Operations and Harbour Master at KPA, one reason why Rwanda should use Inland Container Depot (ICD) in Nairobi is the distance aspect. “We need to compare the return journey between Kigali and Darla Salam which is 3400km yet from Kigali to Nairobi and back; the distance is 2200 which means traders will be saving 1400km if the clear their goods from our ICD in Nairobi” Ruto was speaking during the stake holders forum on inter Agency Marketing Mission held at Serena Hotel in Kigali on the 7th June 2018 where many delegates from Rwanda, Tanzania, Kenya and Rwanda were discussing on the progress made in handling imports at the ports and easing trade in the region. According to Ruto, KPA has improved efficiency at the ICD and has been it easier...

Trade ministers from the Intergovernmental Authority on Development (Igad) member states will on Thursday meet in Mombasa to discuss how to improve cross border trade. The ministers are expected to consider the adoption of a regional policy framework to solve cross-border security challenges. The meeting will be held at the Serena Beach Resort & Spa. It will be presided over by Kenya’s Industry, Trade and Cooperatives minister Adan Mohamed, Igad Executive Secretary Mahboub Maalim and senior representatives from the African Union Commission. The Igad members are Kenya, Ethiopia, South Sudan, Sudan, Djibouti, Uganda, Somalia and Eritrea. Formed in 1986 initially to tackle effects of drought, the bloc grew both in size and mandate to be a forum for discussing other development issues such as cross-border trade, energy, transportation and migration. Source: The East African

Many East Africans are largely ignorant of the East African Community (EAC) programmes and opportunities. The EAC secretary general, Ambassador Liberat Mfumukeko, admitted on Saturday that the six-nation bloc has not done enough to make people aware of its affairs. This calls for an aggressive approach to raise awareness if East Africans are to effectively tap into the opportunities it offers. There is so much to benefit from regional integration, but little is being done to prepare citizens. Poor feedback from the EA Legislative Assembly (Eala) members is seemingly the cause of the unawareness. The EAC has registered increased intra-regional trade – and we believe we can do better. Eala members should not relax; they have an obligation to raise awareness and enable the public to harness the integration opportunities. With a population of 170 million, the EAC has a huge potential for growth considering its abundance of resources and trade opportunities. It is high time our legislators acted proactively to inform the public on EAC activities. By the time $450 million infrastructure projects are completed, it is our expectation that majority of the East Africans will be involved in various intra-regional economic activities. Source: The Citizen

Kigali. Technology promotion and development can accelerate economic growth in East Africa if appropriately applied. Major beneficiaries will include the industrial and entrepreneurship sectors and assure employment to thousands of jobless youth. “Application of science, technology and innovation (STI) will also support other key sectors like agriculture and energy,” affirmed Dr Saidi Kibeya, the deputy executive secretary of the East African Science and Technology Commission (Easteco). He told visiting journalists from across the region that the institution, operationalised only three years ago, was geared to carry on its mandate with support from the partner states. “In so doing we are set to identify potential regional centres of excellence and create a network of industrial research and development institutions,” he said. The Kigali-based institution of the East African Community (EAC) will soon start to develop a protocol on intellectual property rights (IPR) for the region. Dr Kibeya, however, appealed for increased budget to enable the institution acquired adequate office space to cater for its expanding needs as well as enable it recruit more staff members. For the coming 2018/2019 financial year budget unveiled recently, Easteco has been allocated $ 1.6 million for its expenditure, trailing seven of the nine other EAC institutions. Speaking during the visit, EAC secretary general Liberat Mfumukeko said STI can transform the largely agro-based economies of the region into a competitive industrial zone. He said it was worrying that the region was consuming goods that were manufactured elsewhere “and by so doing exporting jobs that would ordinarily...

GENEVA – According to an old African proverb, “When elephants fight, it is the grass that suffers.” The same is true for full-blown trade wars: when major economies clash, developing countries will be among the hardest hit. On June 1, the US administration imposed import tariffs of 25% on steel and 10% on aluminum. The levies will affect not just China, but also Canada, Mexico, and the countries of the European Union. As Cecilia Malmström, the EU Commissioner for Trade, observed at a recent event held by the United Nations Conference on Trade and Development (UNCTAD), “We are not in a trade war, but we could be.” It is a situation that should concern everyone. We know from history that nobody “wins” in a trade war. Tariff hikes by major trading countries represent a reversal of efforts since the end of World War II to eliminate trade barriers and facilitate global commerce. Since the General Agreement on Tariffs and Trade took effect in 1947, the average value of tariffs in force around the world has declined by 85%. That is no coincidence; rather, it is the result of multilateral cooperation, and eight rounds of global trade negotiations, first under the GATT, and then under its successor, the World Trade Organization. Tariff reductions, together with technological advances, drove the extraordinary expansion of global trade that we have witnessed just in our lifetimes. In 1960, trade as share of world GDP stood at 24%; today it is nearly 60%. The expansion of...