Service and industrial sectors registered sluggish growth in the second quarter of this year even though the overall performance of the economy is on track to achieve the projected 6.5 per cent. Service and industrial sectors recorded turnover of 6 per cent in the second quarter of this year compared with 20.1 per cent recorded over the same period last year. According to the August Monetary Policy and Financial Stability statement, the service sector showed a slow-paced growth of 1.1 per cent in the second quarter of this year compared with a 22.4 per cent registered over the same period last year. Industries The sluggish growth in the service sector, the statement said, impacted the performance of goods producing industries, which grew to 18.3 per cent from last year’s 14.6 per cent. Experts have observed that although the service sector has proved to be a key driver of economic growth, contributing up 47 per cent of gross domestic product, the sector still lacks the needed knowledge and skills to support it. Experts further noted that to optimise value from the industries, there is a need for specialised skills and technology to drive industrialisation. The increase in industrial sector was mainly due to the good performance in construction, manufacturing and energy, sub sectors. “Despite the high increase in turnovers for trade services and for banks and insurance companies, turnovers in the services sector in 2015 second quarter recorded low performance mainly due to the fall in international oil prices” said John...

At the beginning of this month, businessmen, policy makers and other economic stakeholders from within East Africa and across the globe convened at the Speke Resort Munyonyo in Kampala for the first ever high-level Manufacturing Business Summit and Exhibition in the East African Community. The fact that the forum was held at Speke resort, with its colonial undertones and heritage, reflects the fact that Africa is still grappling with the legacy of colonialism, especially the effects of national boundaries arbitrarily drawn up so many years ago in Europe, without recourse to local culture or historical affiliations. It also illustrates how these boundaries continue to affect the economics, trade, immigration and geopolitics of these former colonies. How so? For many nations in Africa today, it is easier to trade with Europe, America or China than it is to trade across what for many is an imaginary line in the sand denoting two different countries. Yet there are individuals and companies grappling with how to extend their business beyond borders, setting precedents for those wishing to realise the pan-African dream. The timing of the forum was also apt, coming at a time when many companies have embarked on regional expansion programmes that will see them grow their footprint across the East African market of more than143.5 million people. This ability to operate across borders is important. Cross-border trade within the region brings in economies of scale and enables research and development for a bigger market. According to experts, including the World Bank,...

The East African Community is pushing for a long-term preferential trade agreement with the United States that will remove uncertainties surrounding the Africa Growth and Opportunity Act (Agoa). The five member states have submitted their request to the United States Trade Representative (USTR) on the modalities and the time to start negotiations on the pact. According to EAC Director General of Customs and Trade Peter Kiguta, the USTR is expected to present the request at the next US Congress meeting. If accepted, the region expects to increase the volume of trade and the number of products exported to the US. “For EAC partner states to expand their trade partnership with the US market, there has to be a reciprocal free trade agreement like the one with the European Union,” said Mr Kiguta. READ: Region to export products under Agoa as a bloc “The challenge with Agoa is that it is unilateral; it can be withdrawn any time and the 10-year period is very short and limiting for trade. So we need to have a long-term trade partnership that is more predictable,” he added. Peter Njoroge, the director of economics at Kenya’s Ministry of EAC Affairs, Commerce and Tourism, said that the East African countries have not been able to fully utilise the US quota-free market under Agoa because the agreement does not comply with the World Trade Organisation’s framework for free trade agreements because of its 10-year period of operations.  With a preferential trade partnership like the EAC-EU Economic Partnership Agreement (EPA), Mr Kiguta said member states will be...

Uganda has received the support of the East African Community Secretariat in its sugar and rice trade disputes with Kenya and Tanzania respectively. The Secretariat said the disputes go against the spirit of integration and free movement of goods and services in the region. According to the EAC, by requiring Ugandan traders to have permits to export sugar to Kenya, the country is imposing a non-tariff barrier, contrary to the EAC Treaty. “Sugar exports to the EAC partner states are duty-free and quota-free under the EAC Customs Union if wholly obtained from the partner states. This means that as long as the sugar is locally produced in Uganda the traders can sell it in Kenya or in any of the other partner states without having to be issued with permits or licences,” said Peter Kiguta, EAC Director-General in charge of Customs and Trade.  The EAC Secretariat’s position highlights the contradiction of one country having dual membership of different trading blocs. Kenya and Uganda are members of the Common Market for Eastern and Southern Africa (Comesa), under which permits and quotas — forms of non-tariff barriers for sensitive goods like sugar — are allowed in order to protect industries in member countries.   However, under the EAC, such products only attract punitive import duties ranging from 100 per cent to 35 per cent if they are imported from outside the region and sold to partner states — meaning the bloc relies solely on tariffs to protect domestic industries. In the 2015/2016...

AS Tanzania, Burundi, Kenya, Uganda and Rwanda head towards a joint monetary union, experts are of the view that it is high time the East African Community member states drop their individual procurement acts and adopt a single procedure. The view was among the considerations raised during the ongoing eighth East African Procurement Forum here, hosted by the Public Procurement Regulatory Authority (PPRA) and officially opened by Vice-President, Dr Mohamed Gharib Bilal. “Our community has already gone through the first three stages of integration including the Customs Union, Common Market Protocol and the ongoing monetary union process; but in order to make this effective, there is an important component left; the harmonisation of procurement procedures and Acts,” said the PPRA Chief Executive Officer, Dr Laurent Shirima. Dr Shirima explained that before the end of the three-day session, the meeting would have deliberated on a number of issues and policies towards the proposed harmonisation of procurement acts and procedures within the East African- Community. He reiterated that public institutions around East Africa and other procurement entities still need proper supervision to ensure adherence to authorised purchasing regulations. Vice-President Dr Bilal said unlike the industrialised world, the penetration of imports in East Africa is significantly high and the nature of goods and services that public sectors in the region consume are mostly imported. “If you analyse our budgets, you will find that public administration, education, health and social services make up of over 70 per cent of the public expenditures in each...

East Africa is emerging as a trade hub to rival sub-Saharan Africa’s two heavyweight states of South Africa and Nigeria, according to analysis by Barclays published on Thursday. However the UK bank identifies five “sleeping giants” that present significant new opportunities for foreign companies; Ethiopia, the Democratic Republic of Congo, Mozambique, Tanzania and Ghana. This quintet which are “playing catch-up after significant political and economic upheaval . . . are increasingly attractive to foreign firms and international investors with an eye on long-term returns from fast-growing markets,” Barclays said in its inaugural Africa Trade Index. Matt Tuck, head of global corporate banking at Barclays, said the five were open to international trade and had rapidly growing populations that are likely to reach 325m in total by 2020, comparable to that of the US. Moreover, any repeat of the 7.3 per cent compound annual economic growth they have experienced over the past five years would lead to a significant rise in household spending. Most are relatively unreliant on commodity exports by African standards, shielding them from some of the storms currently battering emerging markets. “The core underlying fundamentals are getting better and with more stable government it does represent an opportunity for growth,” said Mr Tuck. “It’s a much more encouraging outlook than in the past.” Overall, Barclays found South Africa and Nigeria offered the best opportunities for foreign companies, in terms of unmet demand, the absence of major barriers to cross-border trade and their connectivity with other African countries. While South Africa is the...

As Kenya prepares to host the Tenth World Trade Organisation Ministerial Conference in December, United Nations Conference on Trade and Development (UNCTAD) Secretary General Mukhisa Kituyi is urging African states categorised as least developed countries (LDC) to rethink their status because it stymies economic integration. The LDC status presents a trade barrier for countries that are not listed as least developed. Speaking to People Daily in Nairobi, Dr Kituyi noted with concern that economic partnership within the East African Community (EAC) bloc appears to be discriminating and could be punishing Kenya by denying it equal market access on the global platform because other partner states in the economic block are listed as LDCs. This is despite the fact that the principle of the EAC common market should be that of equal market access among partners. “Africa must understand why graduating from LDCs is made hostile, and why people are happy in being called poor,” Mukhisa said, adding that it is all about market access and resources. “We should not punish upward mobility but reward,” he said. Mukhisa said by not being listed as an LDC, Kenya must not be penalised but have similar market access in global trade and influence trade negotiations. To come up with the LDC statuses, every three years the UN Economic and Social Council evaluates countries based on three criteria: average household income, based on the country’s gross national income; human health, nutrition, average level of school achieved, and literacy rates (called “human assets”); and economic...

Key tourism stakeholders from across Eastern Africa will have their first opportunity in Kigali tomorrow, September 3, to see Carmen Nibigira in action, since she took over from Waturi Wa Matu who left the organization to join Trade Mark East Africa. The meeting will take place as a collaboration between the Rwanda Development Board and fellow tourism boards and Rwanda as the host country will be holding a networking session in Kigali for tourism stakeholders from Burundi, Kenya, Rwanda, Tanzania and Uganda. Taking place at the Kigali Serena Hotel Conference Centre this will follow the morning session of ‘Conversation about Conservation’ which RDB has also organized as part of their annual ‘Kwita Izina’ festival week celebrating the conservation efforts towards the endangered mountain gorillas. The EATP networking session is geared to offer stakeholders a platform to start a conversation about intra-inter-regional tourism collaboration in East Africa. Highlighted will be some of the significant topics of why selling the region as one single tourist destination is a smart and sound way forward. With the EAC Single Tourist Visa and the use of national IDs for traveling within the 3 countries: Kenya, Rwanda and Uganda, EATP thrives to see now a more integrated the tourism sector. This platform will encourage stakeholders to introduce and sell multi country packages, improve cross- border economic and tourism growth which are the main objectives of this networking session. The vision of East Africa Tourism Platform is to see a vibrant and diverse single tourist destination that...

Dubai Exports, the export promotion agency of the Department of Economic Development in Dubai, is leading a trade mission to Kenya in a bid to further strengthen bilateral exchanges and connect more and more UAE businesses to the promising East African markets. The five-day mission will include conferences, business-to-business (B2B) meetings and site visits in the Kenyan cities of Nairobi and Mombasa. Political stability and competitive human capital along with a strong agricultural sector and transport infrastructure have enabled Kenya to lead the East African Community (EAC) by way of a 40% GDP share. In 2014 Kenya was ranked 136 by the World Bank in the Ease of Doing Business and 133 in Trade Across Borders. In Mombasa the Dubai Exports mission organised a business forum together with the local government, supported by the UAE embassy in Kenya. A series of meetings with senior officials, buyers, and government agencies was also organised and field visits conducted to a number of companies in Nairobi and Mombasa. More than 100 B2B meetings were also held as part of familiarising UAE companies with government tenders and export procedures. “We are delighted to be partners with Dubai Exports in organising this event, which indeed is a strategic opportunity to highlight export opportunities for UAE companies. Kenya is regarded as the fast growing in Africa in light of the economic boom in the region around us,” said His Excellency Ali Hassan Joho, Governor of Mombasa. “We will support the UAE companies and seek to learn...

East African Community Secretariat, Kampala, Uganda, 1st September, 2015: The President of the Republic of Uganda, H.E. President Yoweri Kaguta Museveni has said that Africa and many developing countries face the challenge of high and growing youth unemployment, which if not addressed can potentially be a source of instability as has been the case in North Africa. The President, who was this afternoon officiating at the official opening of the 1st East African Manufacturing Business Summit and Exhibition 2015 (EAMBS’15) at the Speke Resort, Munyonyo in Kampala, Uganda said many African youth had lost lives as they attempted to cross the Mediterranean Sea in search of employment opportunities in Europe. In a speech read on his behalf by the Prime Minister, Rt. Hon. Dr. Ruhakana Rugunda, President Museveni said “this is a painful lesson and we as leaders must think of a collective regional strategy to respond to unemployment including expanding the manufacturing sector capacity, promoting micro, small and medium enterprises (MSMEs) and youth entrepreneurs. President Museveni urged the private sector to invest sufficient funds in research, technology and innovation and called on both the public and private sectors to come up with a regional research, technology and innovation network to serve as a vehicle for fostering collaborative research and transfer of technology into the sector. The President noted that EAC Partner States were giving high priority to the development of infrastructure and energy, which were critical for efficient operations of the manufacturing sector in particular, and facilitating business, and...