News Tag: Rwanda

East Africa: Zitto – Tanzania to Lose Sh1.7 Trillion Through EPA

By Louis Kolumbia Dar es Salaam — Tanzania will lose $865 million (Sh1.7 trillion) in revenue during the 25 years of implementing the Economic Partnership Agreement (EPA) should the East African Community sign the pact with the European Union (EU), according to opposition politician Zitto Kabwe. Referring to renowned economist Jacques Berthelot, Mr Kabwe said statistics from Eurostat and the International Trade Centre (ITC) showed that EAC would lose 3.6 billion euros in revenue as a bloc. "Losses will mainly be caused by contractual demands requiring Tanzania to scrap tax barriers by 90 per cent on non-agricultural products from the EU and by 10 per cent on agricultural products," the ACT-Wazalendo leader said in a statement. "This means that Tanzania will remain a supplier of raw material and a market to value added products from the EU." Mr Kabwe also said Tanzania would lose anticipated revenue following removal of value added tax (VAT) payable as import duty to products from the EU. Relaxing import duty barriers would lead to trade diversion whereby products from the EU will tend to remove products from foreign countries, thus denying the country revenue, he added. The Kigoma Urban MP cited Section 99.1 of the contract, saying the partners recognised challenges that would lead to revenue losses, and suggested that a solution could be sought through introduction of a compensation system. Section 100 of the contract says following revenue losses, the EU will negotiate with partner countries on taxation policy changes, cooperate in changing revenue...

The Economic Impact of Road Traffic Fatalities in East Africa

In this monthly column called “The Indicator”, we take a economic or financial statistic from East Africa and break it down into bite-sized nuggets of knowledge for investors. This month’s Indicator is a sad one, dedicated to the loss of a good friend of the authors, Mohamed Mtaturu Mkonongo, and is intended to be a note of caution. 43,164 is the number of traffic accident fatalities found for the latest year studied in the East African Community countries, except for Burundi due to lack of available data. What do you mean by road traffic fatalities? Car, truck, motorcycle, and other automobile crashes on roadways that ended the life of a person are counted as road traffic fatalities. How big of an issue is road traffic for public health? The World Health Organization reports that “road traffic injuries are the leading cause of death among young people, aged 15–29 years and 90% of the world’s fatalities on the roads occur in low and middle income countries, even though these countries have approximately half of the world’s vehicles.” Weighted by population, each year EAC countries have 2.9 people die from road traffic per every 10 thousand people in the country. Which EAC country has the most and least per capita road traffic fatalities? Tanzania has the highest per capita traffic accident fatalities in the EAC at 3.2 for every 10 thousand citizens. Rwanda is close behind with 3.0 traffic deaths per 10 thousand people. Uganda has the lowest per capita rate at...

EAC asks for more money, despite low absorption

NAIROBI (HAN) September 12.2016. Public Diplomacy & Regional Security News.By DICTA ASIIMWE. The East African Community is not spending a third of the money it receives, despite the Secretariat’s complaints about underfunding. The Community has consistently complained about inadequate financing and has been pushing the Council of Ministers to come up with sustainable funding mechanisms. One of the options that was discussed by the Council of Ministers sitting in Arusha on September 5, include a hybrid of a levy and equal contribution by partner states with a commitment to increase the Community’s budget. The levy is expected to increase the Community’s financing, while the option of equal contribution is meant to retain the principles of equity, solidarity and equality as included in the Treaty. But even as the Council of Ministers considers these options, an accountability report by the EAC Audit and Risk Committee found that institutions and projects of the Community, whose budget for the 2014/15 financial year was $125.6 million, only spent $81.4 million. The report, which was discussed by East African Legislative Assembly (EALA) on September 2, found that the money spent represents just 65 per cent of what had been budgeted. Having utilised just 27 per cent of the total budget allocated, the African Peace and Security Architecture was one of the worst performing projects, despite the Community being a region with a large number of peace and security challenges. These challenges include the conflict in Burundi and the effects of conflicts in the Democratic Republic of Congo...

EU should focus more on regional governance in Africa

Migration is a priority issue all the way from Oslo to Cape Town, so the EU and Africa need to work together more effectively in order for it to be better managed in the future. Aderanti Adepoju describes how this can be done. Professor Aderanti Adepoju is the founder and coordinator of the Network of Migration Research on Africa (NOMRA). At present, over 31 million Africans are migrants who live outside the country of their birth, the majority within the African continent itself. In 2015, about 14% of arrivals in Europe were African migrants. Several migrant related events in recent years, most notably perhaps the April 2015 shipwreck that claimed the lives of 800 Africans off the coast of Italy, have significantly raised the discourse on migration to centre stage in both public and political arenas, leading to the Valletta Euro-Africa Summit in November 2015. The challenges posed by African migration are many; stretching from risks of brain drain to a lack of orderly, legal and effective labour migration. The question is therefore what the EU can do to support Africa to properly manage migration? In the study ‘Migration within and from Africa’, published today (12 September) by the Swedish Migration Studies Delegation (Delmi), I argue, among other things, that the EU should focus more on regional governance in Africa. Africa now experiences all types of migratory configurations within and outside the continent. More than half of Africans that migrate internationally do so within Africa, and only 27% go to...

East African states delay signing of EU trade deal

East African heads of state met the capital of Tanzania, Dar es Salaam, on Thursday, September 8, to discuss the ratification of the European Partnership Agreement (EPA). Tanzanian president John Magufuli (pictured above), who is also chair of the bloc demanded more time to assess the impact of the agreements before the actual signing takes place. The day-long meeting concentrated on Tanzania's reluctance in signing the trade deal with the EU. The "Daily News" of Tanzania has quoted Magufuli as saying: "There are a number of questions to be looked upon, why are we signing the agreement while the EU has imposed sanctions on Burundi? Why are we signing while UK has pulled out of the EU?" According to Honnest Prosper Ngowi, an economics lecturer at Mzumbe University in Tanzania, the country needs investment in areas of roads, water and power for it to compete in European markets. "I think, what Tanzania has done means that it wants to assess the situation so that it does not lose out once it joins," he said. South Sudan is the newest member of the East African bloc Kenya would pay more taxes Out of the six EAC countries, Kenya stands to lose the most if the deal is not signed. Other member states, like Tanzania, Burundi, Uganda, would still be elligible for duty and quota-free access under EU's Everything But Arms initiative for teh world's "Least Developed Countries". Kenya does not fall under this category. "If the EPA is not signed and...

Endorse EU pact to benefit East Africa

The signing of a trade pact with the European Union for free market access for East Africa’s horticultural crops about a decade ago significantly improved foreign earnings for the region. Under the Economic Partnership Agreement (EPA), East Africa was granted a duty-free quota market access by the EU in efforts aimed at balancing the skewed terms of trade. The agreement is coming to an end this month and a new one is due by October 1. In the trade agreement, EU treats East Africa as a single trade entity and offers it a common package. However, East Africa is now pulling in different directions. Kenya and Rwanda have signed and committed themselves to the extension of the pact, but the others have not. This is why Deputy President William Ruto yesterday reached out to the other EAC heads of state, during a meeting in Arusha, to sign the deal. In particular, Tanzania has been reluctant to sign, arguing that it was interrogating its impact on its industrial production. Perhaps there are other underlying concerns. Burundi is unhappy because of a trade embargo by the EU over its recent controversial elections. Clearly, the hesitation over signing the partnership exemplifies the challenges of regional economic blocs, where at times countries focus on individual, rather than the union’s greater interest. Yet there is much value in hunting as a pack in pursuit of common interests. Among other advantages, this enables a region to attract more investment and puts it in better stead to...

East Africa: Venture Capital to Dominate EA Business Conference

Financing entrepreneurial ventures is one of the key issues to feature prominently in the forthcoming maiden East African Business and Entrepreneurship Conference and Exhibition in Nairobi, Kenya. EABC Executive Director Ms Lilian Awinja said one year after the Global Entrepreneurship Summit, they realised the need for a critical follow up on the actual tangible impacts of initiatives like "Trade Africa" or "Power Africa", that have come along with large funds to promote entrepreneurship. "This is why we will have two sessions on the opportunities and experiences to access those funds and on the requirements for other ways of financing," she said. Slated for October 10 to 13 in Nairobi, the crucial conference is organised by the East African Business Council (EABC) in partnership with the East African Community (EAC) respective national investment agencies. On the session, financial Institutions such Kenya's KCB Bank will elaborate on the key issues relevant for the financing of entrepreneurial enterprises. EABC chief added: "This is not on big funds and programmes only but also a chance to learn about innovative sources like crowd funding, impact investment and other incubator initiatives". The conference will also focus on Manufacturing, infrastructure, leather and textiles and energy in parallel sessions, Ms Awinja said. The exhibition expects to pull some 300 participants from the infrastructure-, manufacturingand energy sector, from ICT - and leather and textile industries, as well as from financing institutions. "Important policy makers and top representatives of relevant international organisations have committed themselves to participate," she said. In...

East African Bloc Says Three Months Needed for EU Trade Pact

The six-nation East African Community bloc said it would deliberate over a free-trade agreement with the European Union for three months before committing to a treaty that should be in place before October. “We have considered all the issues on EPA and we have given this issue another three months until January so that we can come up with a solution,” Tanzanian President John Magufuli said after a regional summit in Dar es Salaam, the commercial capital of Tanzania. The countries have been negotiating the so-called Economic Partnership Agreement, or EPA, with the European Union since 2002, a reciprocal pact that will extend their duty- and quota-free access to the bloc, while opening up their economies. The EAC groups Kenya, Tanzania, Uganda, Rwanda, Burundi and South Sudan. While Rwanda and Kenya have already initialed the treaty, all other nations are required to commit to the deal for it to take effect. Kenya is the only nation that stands to lose access to Europe because it isn’t grouped among the Least Developed Countries. The others can continue exporting to the bloc under a separate Everything But Arms treaty for LDCs.   Source: Bloomerg

Now is the time to phase out the Dollar in regional trade, not tomorrow

Recently, member states of the East African Community (EAC) discussed the need to accept regional currencies as a means of payments in cross-border trade. This means traders will now transact without having to convert their respective currencies to US dollars and back to their own – a process which was not only tedious but time consuming and costly. On Monday this week, while opening the Global African Investment Summit (TGAIS) in Kigali, President Paul Kagame called on African governments to be time conscious in the implementation of regional integration projects, highlighting the enormous cost that is incurred when such projects are delayed or stalled. This brings to mind English Playwright, William Shakespeare, who once said “better three hours too soon than a minute late”. The move to accept regional currencies as a means of payment will not only be timely but will see the region’s member states save a substantial amount of money that was previously lost through exchange. Implementing this will cushion our local currencies’ against drastic fluctuation against foreign currencies as it has been before. The move to trade in national currencies will protect them from adverse vulnerability of the local currencies in the member-countries of the bloc. Experts attribute our struggling currencies to keep afloat against the US Dollar to a globally strengthening dollar and reduced foreign exchange inflows from tourism, trade and agriculture. The global currency and exchange movement remains one of the most important developments in human liberation since the World War Two. It evidences a...

EAC pushes back free trade pact with Europe to Jan

IN SUMMARY Otherwise, Kenyan exports could be asked to start paying taxes from as early as October 1, a development that will make its produce — mainly flowers and fish — uncompetitive in the EU market. The fate of Kenya’s Europe-bound exports rests with the European Union parliament after the East African presidents pushed back the date for reaching final decision on free trade pact to January. President John Magufuli who chaired yesterday’s extraordinary heads of state summit said the bloc would continue to discuss the Economic Partnership Agreement (EPA) with the aim of concluding it at the start of next year. “We have given ourselves three months to discuss further the signing of the EPA agreement and we will meet in January 2017 over this issue,” Mr Magufuli, who is also the East African Community chairman, said during the extraordinary summit in Dar es Salaam. “We appeal to the EU not to punish Kenya by denying it access to the European market,” he said in a statement. Tanzania had earlier indicated it would not sign the EPA during yesterday’s summit. The EU had given the region up to September 30 to sign and ratify EPA. Sources said it later asked EAC to show commitment by November 30 after Kenya’s Industrialisation secretary Adan Mohamed and his Rwandese counterpart Francis Kanimba asked EU parliament for more time few days ago “to prove region’s commitment.” Start paying taxes Kenya, the only state classified as developing country among the EAC’s six members, ships...