The Construction of Mbale-Tirinyi road generated a lot of excitement among the masses in late 1990s. This brand new tarmac road would provide a direct and faster route to Mbale bypassing the longer and busier, Jinja – Tororo – Mbale route. This road was envisaged to solve the problem of transporting foodstuffs and other commodities from the eastern part of Uganda to markets in the central part. However, some of the locals found a different use for the beautiful tarmac road, drying cassava. This has continued to date. This sad fact is one of the many activities happening on the many new multi-billion road infrastructure investments across the country. There is barely any meaningful economic boom coming out of some of the roads, remember that have been built on borrowed funds and tax payers’ money. Why is this so? Analysts believe the regions need to be supported in commercial agriculture to realize the benefits of such infrastructure. This may take some time though. It is predicted that the same could happen to Standard Gauge Railway (SGR) arguably, the country’s major infrastructure project since independence. The US $3.2 billion project will be funded with loan from Chinese Exim bank. Part of the funding is from the infrastructure levy of 1.5% on all imported goods. Analysts believe, the project may turn out to benefit more of Kenya and the Kenyan manufacturing sector which is said to be advanced than any of the other East African Countries (EAC). Could this be the reason...

Policies to Maximize the Gains of Trade Opportunities for the Poor, and Minimize the Risk This important report reviewed here was prepared by the World Bank which we hope will receive the due consideration it deserves considerable attention and study in the formulation of new development strategies in the future. Further progress in the Doha negotiations, and in particular achieving a substantive outcome on agriculture, is necessary to increase the effectiveness of trade in reducing poverty. The agriculture sector, which employs most of the poor, will continue to play a key role in lifting people out of poverty. Its role could be strengthened if more was done to remove remaining obstacles to agricultural exports. Tariffs and subsidies are particularly high in the agricultural sector and anti-competitive behaviour in some segments of the supply chain can make it particularly hard for the poor to benefit from trade participation. The increasing importance of supply chains in production has highlighted the linkages between the agriculture sector on one side and the services and manufacturing sectors on the other, showing that progress in removing obstacles to trade ideally should occur simultaneously across all sectors. In the long run, the capacity to leverage agriculture for reducing poverty will depend on achieving continuous improvements in productivity, reducing the costs to trade in agricultural goods, reducing tariffs on imports and key intermediates such as fertilizers and agricultural machinery, and improving access to a range of services that are key inputs in the production chain. The capacity to...

KIGALI, Rwanda - The government will continue to support and promote cross-border trade and capital flows in the East African Community (EAC) and Common Market for Eastern and Southern Africa (COMESA) to strengthen value chains and build partnerships. “Everything in Rwanda is profitable. Indeed according to the 2014/15 World Economic Forum annual report, Rwanda is the most competitive economy in the region and is ranked 3rd on the continent. The country has a strong investment environment including stability, peace and security. The continued reforms in the doing business environment has laid the foundations for Rwanda to develop into a top investment and trade destination,” Rwanda’s Premier, Anastase Murekezi said last week. He was officiating at the 18th Rwanda International Trade Fair (RITF) 2015 that brought together over 383 participants from 18 countries across the globe. “We need to mobilize the private sector, create a strong vibrant Rwandan private sector to harness opportunities created by donated policy reforms and embark on robust SMEs development strategy implementation to fully utilize the potential of our economy,” he said. However, as the country works towards creating a vibrant domestic trade and investment climate, it is challenged to increase exports to attract more investment, to provide more employment opportunities, and to speed up technology transfer and skills development. At the regional level there has been many efforts to facilitate trade and transport by building infrastructure for trade across EAC, countries, borders, especially the implementation of key initiatives in the northern corridor including the single customs...

Central Corridor member states are finding it difficult to attract private investors to finance prioritised infrastructure projects because of the huge financial outlay and the delayed return on investment involved. This puts the governments under pressure to either finance the projects from their budgets, or mobilise donors to fund the activities. These financing issues were raised last week during the 4th Central Corridor Transit Transport Facilitation Agency (CCTTFA) regional task force meeting to review the Presidential Round Table (PRT) resolutions and finalisation of an implementation plan. “What private investors want is to put money in projects that make quick returns, but projects like railways are long term and this is partly why the private sector is shunning these projects,” said George Rukara, Assistant Commissioner of Water and Rail Transport Regulation in Uganda’s Ministry of Works and Transport. The five Central Corridor member states are Rwanda, Uganda, Tanzania, Burundi and the Democratic Republic of Congo. Unlike Tanzania, the other Central Corridor members are landlocked and any efforts to access to the sea would facilitate trade. Drawing funds from their coffers would strain regional governments given that some have a tight budget for domestic expenditure and the Central Corridor projects have not been included in this year’s fiscal budget. Member states have the huge task of securing funds to finance more than 10 new joint development projects that have been prioritised and will be jointly owned and funded. The projects are to enhance intra-regional trade by lowering the cost of doing business...

One of the East Africa’s community countries ‘Rwanda’ has expressed great Interests in a contract to finance, design, build, operate and maintain a 1661 km railway linking the port of Dar es Salaam in Tanzania with Burundi. Rwanda has proved to highly support the business Idea and the contract than the two other project partners; Tanzania and Burundi. The Procurement is being led by the Rwanda Transport Development agency on behalf of the three countries, which have appointed CPCS of Canada for an advice on the contract structure and the selection of private-sector partners. Two PPP contract models are being considered: a turnkey build-operate-transfer concession, or the award of separate construction and operations & maintenance contracts which may enable the states to source financing at lower cost. The DIKKM railway as it is known from the initials of the main places to be served, the railway would largely follow the alignment of the existing metre gauge line for the 970 km from Dar es Salaam to Isaka, (Kahama District of the Tanzania’s Shinyanga Region) replacing the current line without disrupting its operations during construction. From Isaka the DIKKM railway would follow a 494 km Greenfield alignment to Kigali in Rwanda, with a 197 km branch from Keza to Musongati in Burundi. A feasibility study for the project was completed by Canarail and Gibb Africa last year, building on work previously undertaken by BNSF and DB International. This recommended that the line be developed through single joint infrastructure company and regulated...

Sun City, South Africa - The recently launched African free trade area can succeed only if it is backed by good credit insurance that covers payment risk as well as political and country risk. This is according to Gregory Nosworthy, managing director of Euler Hermes, the credit trade insurer and subsidiary of German insurer Allianz that opened its South African office in May this year. The Tripartite Free Trade Area (TFTA) was launched in Egypt in June this year by the Common Market for Eastern and Southern Africa, the East African Community and the Southern African Development Community. The three blocs bring together 26 countries with a population of around 625 million people and GDP of $1.6 trillion. Nosworthy told a media briefing at the Insurance Conference: Africa Rising 2015, held at Sun City this week, that trade between African countries had increased by 300 percent over the past 10 years, albeit from a low base. Euler Hermes underwrites $102 billion worth of trade between TFTA countries at present. Nosworthy says the most important risk to underwrite is payment risk to ensure that an exporter of goods receives payment once the goods have reached a customer in another country. The second risk to underwrite is country and political risk, which covers factors that could prevent a company from taking goods into or out of a country, most notably conflict or political upheaval, but also developments such as the outbreak of Ebola. Euler Hermes currently underwrites 860 billion euros worth of...

The recently launched African free trade area can succeed only if it is backed by good credit insurance that covers payment risk as well as political and country risk. This is according to Gregory Nosworthy, managing director of Euler Hermes, the credit trade insurer and subsidiary of German insurer Allianz that opened its South African office in May this year. The Tripartite Free Trade Area (TFTA) was launched in Egypt in June this year by the Common Market for Eastern and Southern Africa, the East African Community and the Southern African Development Community. The three blocs bring together 26 countries with a population of around 625 million people and GDP of $1,6 trillion. Nosworthy told a media briefing at the Insurance Conference, Africa Rising 2015, held at Sun City this week that trade between African countries had increased by 300 percent over the past 10 years, albeit from a low base. Euler Hermes underwrites $102 billion worth of trade between TFTA countries at present. Nosworthy says the most important risk to underwrite is payment risk to ensure that an exporter of goods receives payment once the goods have reached a customer in another country. The second risk to underwrite is country and political risk, which covers factors that could prevent a company from taking goods into or out of a country, most notably conflict or political upheaval, but also developments such as the outbreak of Ebola. Euler Hermes currently underwrites 860 billion Euros worth of global trade. Source: The Citizen

“The biggest markets for your goods are often right next door. You don’t have to just look overseas for growth, you can look internally…it shouldn’t be harder for African countries to trade with each other than it is for you to trade with Europe and America,” he said. Obama was delivering a keynote speech to the African Union in Addis Ababa, the first sitting US president to address the body since its foundation in 2001. The speech capped off a five-day trip to Kenya and Ethiopia. According to UN figures, the share of intra-African trade in Africa’s total trade over the past decade was only about 11%, compared to 70% for Europe. In response, Obama said that the US would step up efforts to encourage regional integration, building on previous US assistance in modernising customs and border crossings in the East African Community. The president also highlighted US efforts in battling corruption, tackling illicit capital flows and building power capacity on the continent. Obama praised African countries that have torn down barriers to investment, but argued that much more needs to be done to spark business growth on the continent. “In many places in Africa, it’s still too hard to start a venture, still too hard to build a business,” he said. Obama said that the United States stands ready to assist African nations who intend to “make doing business easier” and called for an increase in US trade efforts on the continent. “I want Africans and Americans doing more...

AFRICA: Expressions of interest in a contract to finance, design, build, operate and maintain a 1661 km railway linking the port of Dar es Salaam in Tanzania with Burundi and Rwanda have been invited by the three countries. Known as the DIKKM railway from the initials of the main places to be served, the railway would largely follow the alignment of the existing metre gauge line for the 970 km from Dar es Salaam to Isaka, replacing the current line without disrupting its operations during construction. From Isaka the DIKKM railway would follow a 494 km greenfield alignment to Kigali in Rwanda, with a 197 km branch from Keza to Musongati in Burundi. The DIKKM railway would be built to 1 435 mm gauge, in line with East African Community and African Union policies for new lines in the region, and would be suitable for heavy freight trains with 32·5 tonne axleloads and up to 2 000 m long. Two PPP contract models are being considered: a turnkey build-operate-transfer concession, or the award of separate construction and operations & maintenance contracts which may enable the states to source financing at lower cost. Procurement is being led by the Rwanda Transport Development agency on behalf of the three countries, which have appointed CPCS of Canada to advise on the contract structure and the selection of private-sector partners. A feasibility study for the project was completed by Canarail and Gibb Africa last year, building on work previously undertaken by BNSF and DB...

Dar es Salaam — After a long and strenuous tussle among 28 members of the Euro Zone on the economic bailout of their 29th member-state based in Athens, the people of Greece finally secured what can be equated to pulling a meat chunk from the Lion's teeth. Three months on, their economic life had come to the brink of total collapse. Bank doors had been shut leaving clients with limited daily ATM cash withdrawals. People had literally to choose between food and medicine. The banks are now open. Thanks to the European Central Bank (ECB) decision to provide the country with an additional Seven Billion Euro bailout after reaching an agreement within the zone. Without having to recount the painful process that Athens had to go through, it would be proper for the governments and people constituting the current East African Community bloc to read the Euro Zone developments between the lines to enable their integration deliver the goods. For, what really matters at the end of the day would be the state of well-being of the people rather than the individual governments in power at the material time. Governments change but the people remain. To the emerging economic blocs, particularly on the African continent, the EU has been something to model themselves upon. Some EU members have actually been supporting the formatting of these blocs, including the current East African Community. Now here we were. The EU centre seemed could no longer hold. Athens reached the stage of not...