Kenyan President Uhuru Kenyatta has urged African governments to open their borders, trade with each other and reduce dependency on foreign aid. Speaking at the Pan African Parliament in Midrand, Kenyatta told members of the house that the continent's potential could be realised only if African governments worked together and made it easier to trade with each other. "There cannot be a good reason why it is easier for us to trade with Asia, Europe and the Americas rather than our own fellow Africans. We have ended up as a source of raw materials. This must come to an end. Africa must use her resources to create jobs for our own young people." "Africa must significantly open her markets to African products to promote this ideal. That process can only be achieved if we start by opening up our borders to each other," Kenyatta said. He called for governments to significantly reduce the cost of inter-Africa trade and to forge partnerships which would take the continent into a new industrial development. Partnerships have started to emerge in East Africa. This process began in July 2000 with Kenya, Tanzania, Rwanda, Uganda and Burundi. This community undertook to establish a customs union, common market, monitoring union and a political federation. The customs union is already in place and the common market goal is gradually being achieved. "Despite our individually small economies, the integration has placed the entire region on a trajectory of growth that will fundamentally transform Africa," Kenyatta said. East African...

The East African Community Legislative Assembly recently passed a binding legislation to eliminate non-tariff barriers to trade among East African Community partner states. Known as the East African Community Elimination of Non-Tariff Barriers Act, 2015, the law is likely to contribute to increased intra-EAC trade once ratified nationally by each of the five states — Kenya, Burundi, Rwanda, Tanzania and Uganda. NTBs are partly to blame for the still limited intra-EAC trade, estimated at 13 per cent in 2013. NTBs often limit market access, changing the quantities of goods traded, or increasing the prices of goods. They come in various forms such as restrictive sanitary and environmental protection measures, import or export restrictions, price controls, arbitrary application of rules of origin and other trade-restrictive measures. Although there are no quantitative studies on the impact of NTBs in the region, the most recent Business Climate Index Survey in 2011 by the East African Business Council showed that businesses feel that NTBs have continued unabated in the EAC. Perhaps even worse, the general public seems to lack awareness of NTBs and their negative impact on their economic circumstances. The importance of the Act cannot be overstated. It provides the business community the opportunity to report NTBs and see to their final resolution through the formal channels of the EAC Secretariat, with a clearly defined elimination framework. Before that, businesses could report NTBs to their respective national monitoring committee (NMC), who would in turn report them during the regional forums of NMCs, usually...

East African Community countries and those of Central Africa are spending billions of dollars in freight costs on foreign-owned shipping firms that they would otherwise have used on their own. Between 2008 and 2012, Kenya, Tanzania, Uganda, Zambia, Malawi, Rwanda and Burundi paid $48.2 billion in freight costs, according to the Intergovernmental Standing Committee on Shipping (ISCOS). “These are colossal amounts of money. It is high time countries in East Africa explored the idea of investing in vessels,” ISCOS secretary Kenneth Mwige said, adding that apart from Ethiopia, most countries in Africa do not own ships. Kenya paid $15.6 billion in the five years of the review, followed by Zambia and Tanzania, which spent $11.2 billion and $10.5 billion respectively. “If EAC states are to grow their economies, they cannot afford to keep paying this kind of money to foreign companies. Their economies are growing and imports are increasing at an average rate of seven per cent annually, so these figures will keep rising,” said Mr Mwige. ISCOS — an initiative of Kenya, Uganda, Tanzania and Zambia — plays a key advisory role on maritime matters. According to Kenya Ports Authority statistics, the volume of cargo passing through Mombasa Port is projected to grow at between five and 10 per cent this year, that is, 27.36 million tonnes compared with the 24.875 million tonnes handled in 2014. Container traffic at the port is projected to rise from 1.012 million twenty-foot equivalent unit (teu) containers last year to 1.3 million teu...

EAC ministers have agreed to align national tourism laws to the EAC Customs Management Act. Amending of the laws will accord privately owned non-commercial vehicles registered in a member state local status on excursions to tourism sites across borders. The agreement follows a recent dispute that saw Kenya ban Tanzanian registered tourist vehicles from accessing Jomo Kenyatta International Airport, national parks and other tourist sites. Tanzania retaliated by cutting down the frequency of Kenya Airways flights from Nairobi to Dar es Salaam, Zanzibar and Kilimanjaro by more than 60 per cent. Though the standoff was resolved, the chief executive officer of the Kenya Tourism Federation, Agatha Juma, said the problem of commercial vehicles not accessing each other’s airports and tourist sites should be addressed. “If laws are to be amended, then Tanzania should first amend its current Tourism Act that bars foreign registered vehicles from its national parks,” said Ms Juma. “We are waiting for the bilateral meeting between the two countries to see what decision will be taken to resolve the issue.” Tanzania’s Tourism Act 2008 stipulates that foreign registered tour operator vehicles are not allowed entry into national parks. According to Fred Kaigwa, the Kenya Association of Tour Operators chief executive, although the two presidents directed that Tanzania’s tour vans be allowed to access JKIA, it was an unfair decision for Kenya. “Tanzania still bars our commercial vehicles from their tourist sites,” said Mr Kaigwa. Richard Rugimbana, the executive secretary of the Tourism Confederation of Tanzania, said the...

Africa’s biggest trading blocs are next month set to sanction the creation of a grand free trade area while still seeking consensus on tariff liberation and rules of origin of manufactured products. The Common Market for Eastern and Southern Africa (Comesa) has been negotiating for agreeable tariff offers and the criteria for determining the national sources of products with its counterparts—Southern African Development Community (Sadc) and the East African Community (EAC). But the indecisiveness of some member states and trading blocs to table their own tariff proposals has delayed the launch of the Tripartite Free Trade Area (TFTA). The negotiations for the single market were launched in Johannesburg in 2011. “These issues will be renegotiated after the approval of the draft agreement establishing the Tripartite Free Trade Area among the Comesa, Sadc and EAC trading blocs,” Mark Ogot, a senior assistant director in charge of economic affairs at Kenya’s Ministry of East African Affairs, Commerce and Tourism told The EastAfrican, noting that only 40 per cent of the issues to do with rules of origin have been completed. “They have agreed on the way forward although there is still some work to be done. Rules of origin and tariff offers are the outstanding issues.” According to draft documents, the tripartite member states are expected to simplify and harmonise their trade and Customs documentation and procedures for trade in goods among themselves. The member states are not supposed to impose quantitative restrictions on imports or exports in trade with each other...

The East African Community states are among countries that will benefit from low cereal prices expected to prevail this year, following the record-breaking output in Europe and Asia last year. The world cereal output is forecast at 2,509 million tonnes (including rice in milled equivalent), which is 39 million tonnes lower than in 2014 but still nearly 5 per cent above the average of the past five years. According to the Food and Agriculture Organisation (FAO), exporting nations are still holding abundant stocks of cereals, hence an increase in prices will be unlikely. “The world food import bill is forecast to reach a five-year low in 2015, mainly driven by a decline in international prices, low freight rates and a strong US dollar,” said FAO in its latest global food outlook. The situation will benefit low-income countries that continue to spend millions of dollars importing cereals. As a result, these countries are expected to save on foreign exchange this year. The EAC member states do not produce enough wheat, rice and maize for their 134.5 million citizens. Although Uganda and Tanzania have increased their maize production, supply still remains erratic and heavily dependent on rainfall performance. Prices are expected to remain low despite a slight decline in global grain production this year compared with last year, as abundant stocks held by exporting countries and some importing nations are expected to offset any pressure from the demand side. “Worldwide cereal production will likely decline by 1.5 per cent from last year’s...

The cost of imports looks set to rise with the planned introduction of a one-per cent levy on goods coming outside the East Africa Community to fund the regional bloc’s budget. In the budget speech made to the East African Legislative Assembly last week, the levy was the only highlighted option among various choices for funding the regional budget. Currently, the budget is mainly funded by donors. This is the second time that the levy is being floated after it was rejected last year on grounds that it would sharply increase the cost of goods and doing business. “The ministers of finance received the proposals including a one per cent levy on imports from outside the EAC region,” said Harrison Mwakyembe, chairperson of the EAC Council of Ministers. “They will consider the comments submitted by partner states, finalise the proposal and recommend a sustainable financing mechanism for the community council and summit for consideration and approval during the financial year under review.” Kenya imported goods worth Sh1.6 trillion last year, meaning the levy would net the regional bloc Sh16 billion. Other EAC member states are Tanzania, Uganda, Rwanda and Burundi. The proposed levy is modelled on Kenya’s railway levy that charges 1.5 per cent on imported goods. Proceeds help to build the new Mombasa-Nairobi railway line. The EAC levy sets the stage for price increases, including fuel, food, cars and second-hand clothes, with the potential effect of eroding the purchasing power of most households. It would also see a dramatic...

Egypt will sign a free trade agreement with Africa’s three biggest economic blocs on June 10, a senior official said Sunday. Industry and Trade Minister, Mounir Fakhri Abdel-Nour, added that the signing of the agreement would take place in the resort city of Sharm el-Sheikh. He noted that the agreements would be signed with the Southern African Development Community, the East African Community and the Common Market for Eastern and Southern Africa. He added that delegations from 26 African states would attend the event in the Egyptian resort city. Abdel-Nour said the agreements would be beneficial for Egypt, on one hand, and member states in the three blocs, on the other. He said the agreement would open the door for the creation of a free trade zone in the future. “This will pave the road for the removal of import tariffs and the elimination of non-tariff barriers along with any fees that negatively impact the flow of trade,” Abdel-Nour said in a statement. He added that the deal would also lead to the removal of quantitative restrictions on imports and exports, the introduction of measures to facilitate cooperation between customs authorities, and the adoption of anti-dumping measures and countervailing duties. The three blocs contain a huge consumer market of up to 625 million people, Abdel-Nour said. They also represent 62 percent of the total volume of trade in Africa and a total GDP of up to $1.2 trillion, he added. Source: News video news.us

Experts query benefits Uganda would reap from EAC-COMESA-SADC FTA On June 10, representatives from Uganda along with counterparts from 26 other member countries of the three regional trade blocs— the Common Market for Eastern and Southern Africa (COMESA), the East African Community (EAC) and the Southern African Development Cooperation (SADC) — will finally convene in Sharm el Sheikh, Egypt, to sign the long-awaited tripartite free trade area (FTA) agreement. A free trade area is a geographical region that covers a trading bloc, whose member states have signed a free trade agreement, and in the process eliminate barriers to trade such as tariffs and import quotas. Once it is endorsed by all the members, the FTA will stretch from Cairo in Egypt to Cape Town in South Africa, only skipping the newest nation on the continent, South Sudan, which is not yet a member of any of the three regional blocs. The countries have a combined population of over 600 million people and a gross domestic product (GDP) of $ 1.3 trillion - almost 60% of the continent’s total GDP - according to a 2013 COMESA policy document. When signed, the tripartite FTA sometimes referred to as the ‘grand free trade area,’ would be the largest economic bloc on the continent. Though Amelia Kyambadde, Uganda’s minister of trade, industry and cooperatives is positive, other experts are not very excited yet. Kyambadde told The Independent on May 9 that the FTA, which will be transformed into a common customs union at a...

CAPE TOWN, South Africa - Having a regional cross-border payment systems in Africa goes a long way towards easing concerns that have arisen about the general reduction in correspondent banking relationships globally writes PAUL TENTENA. This, according to Lesetja Kganyago the Governor South African Reserve bank (SARB) will bring about greater efficiencies in the payments process. Kganyago said the South African Development Community (SADC) Integrated Regional Electronic Settlement System (SIRESS), launched in July 2013, is already having a significant impact on cross-border payments. Ablout 43% of intra-SADC payments were now taking place through SIRESS. “By the last week of April this year, SIRESS had reached the R1 trillion settlement mark,” he said. He praised other regional solutions implemented in the payment systems environment since the year 2000 like the West African Monetary Zone (WAMZ), and the East Africa Payment Systems (EAPS) of the East African Community (EAC). “The EAPS is a secure, effective and efficient funds transfer system that enhances efficiency and safety of payments and settlements within the region. It also facilitates cross-border transactions that are essential for boosting intra-regional trade among East African countries. “Some of the benefits of EAPS include real-time funds transfers, finality and irrevocability of payments, increased accessibility and same-day settlement. The initiative is indeed a success that is worth celebrating,” Kganyago said. He was speaking during the 22nd SWIFT African Regional Conference (ARC) held in Cape Town recently. Society for Worldwide Interbank Financial Telecommunication (SWIFT) brings together, bankers, policymakers, industry leaders and the broader...