Debate on whether Rwandans should amend the Constitution to allow President Paul Kagame to run for a third term could affect the country’s economic prospects if investors decide to adopt a wait-and-see attitude. While the country has in the recent past witnessed growing calls from top members of the ruling Rwandan Patriotic Front, politicians aligned to the ruling party and civil servants for a referendum to change the Constitution, RPF is yet to come up with an official position on the matter. Analysts warn that investors could hold back their capital as they wait for a clear political roadmap. “Investors all over the world value certainty, predictability and transparency. This also applies to Rwanda,” said Mitra Farahbaksh, IMF resident representative to Rwanda, declining to comment further on the issue, arguing that the Fund’s mandate is to “focus on economic issues.” World Bank lead economist and programme leader for Eritrea, Kenya and Rwanda, Apurva Sanghi, added: “One thing that has been proven many times in different contexts, is that security and political stability are important factors for investment.” However, Leonard Rugwabiza, the chief economist in the Ministry of Finance and Economic Planning, said, “Whatever Rwandans decide, stability will continue. At the end of the day, stability is about institutions and people. If you look at one of the [unspecified] World Bank reports on political stability, you find that Rwanda is ranked as more politically stable than China and India.” A resurgent Rwandan economy — which expanded by 7.1 per cent last...

The duty on cement imported into East Africa has been lowered from 35 per cent to 25 per cent, heralding good news for the construction sector. But manufacturers warn that the resultant price crash could send them out of business and lead to massive job losses. According to a gazette notice of the EAC released last month, apart from the reduction in the common external tariff (CET), cement has also been removed from the list of sensitive products that require protection until domestic industries can compete. Decisions on the CET are made by the East African Council of Ministers. Despite the current 35 per cent duty on cement from non-EAC countries, imports are still largely cheaper than the locally produced commodity. Cement manufacturers fear the latest move is opening a window to cheaper cement imports that are likely to leave them staring at idle capacity and losses. “This will only create unnecessary competition from manufacturers outside the region, leading to an influx of cheap cement imports,” said Ronald Ndegwa, Savannah Cement chief executive. Mr Ndegwa said that the costly business regime in East Africa will render the local firms uncompetitive against rivals who operate in “subsidised economies.” Electricity, which on average makes up 40 per cent of the direct cost of cement manufacturing, is four times cheaper in Asian countries. “Until the cost of production in the region comes down, we still feel that it is unfair to remove cement from the sensitive items list it is likely to put...

The East African Community Council of Ministers has initiated the process of fast-tracking the Non-Tariff Barriers Bill into law. This is expected to compel partner states to eliminate the numerous NTBs that hinder smooth movement of goods and services within the economic bloc. The EAC Elimination of Non-Tariff Barriers Bill, 2015 was passed by the East African Legislative Assembly in January to enable partner states to completely remove NTBs to allow free movement of goods, people and labour as a requirement by Common Market Protocol. Non-tariff barriers have been cited as the biggest threats to doing business in East Africa. While the five EAC partner states have agreed in principle to remove non-tariff barriers by December this year, this largely depends on good faith on the part of the five countries due to the absence of a legal framework. A report on the status of NTBs released last year indicates that last year, the economic bloc eliminated 66 per cent of the non-tariff barriers, enhancing trade. The report, which was released by the EAC Secretariat, showed that 18 NTBs remained unresolved while four new ones were introduced by the partner states. However, 78 NTBs were reportedly resolved cumulatively by the member states. Tanzania, Kenya and Uganda were reported to have imposed the highest number of NTBs during the period under review while Burundi had the least, with Rwanda imposing none. The new and the unresolved NTBs are mostly restrictions imposed on Customs and administrative entry procedures, technical barriers to trade...

East African economies are showing promising growth prospects for 2015, but the falling prices of key commodity exports and the region’s mounting debt burden remain a threat. The region’s growth is expected to average six per cent this year, up from about 5.5 per cent recorded in 2014, driven by increased investments in infrastructure, falling inflation and an expected surge in private-sector lending. However, this growth is dimmed by plummeting prices for tea and coffee, the region’s two leading exports, which have reduced export earnings and widened the current account deficit of Tanzania and Kenya. Tea prices have been depressed by oversupply, while poor rainfall has hurt coffee output. In Uganda and Burundi, a supply glut and lower production have seen depressed earnings from tea and coffee. In the 2014 season, Uganda reported coffee exports worth $394 million, representing a 2.3 per cent drop in volume and nine per cent decrease in value from the previous year. Uganda sold its coffee at an average of $1.87 per kg, down from $2 per kg the previous year. In Burundi, earnings from coffee fell to $23.8 million in 2014, from $66.3 million in 2013, attributed to unpredictable weather conditions and a lower-yielding crop cycle. Tea earnings fell six per cent in the first nine months of 2014. Kenya’s tourism sector, one of the key drivers of dollar earnings, contracted by about 14 per cent during the third quarter of 2014, but is expected to make a comeback as the security situation stabilises....

THE East African Community (EAC) Council of Ministers has urged the trading bloc to fast track the implementation of the Regional Postal Sector Strategy, an official said over the weekend. EAC Director of Infrastructure Philip Wambugu told a regional forum in Nairobi that a baseline survey for the regional postal sector has already been concluded. “A meeting to consider the report of the survey has been scheduled for May 2015,” Wambugu said during the East African Communications Organization Postal Conference on Leveraging Information Communications Technology in the Transformation of the Postal and Courier sector in the region. Wambugu said that the report of the survey is rich in information on the current state of the sector as well as insights on the way forward. He said that the strategy would assist EAC partner states to harmonize their policies, laws and regulations for the sector. In the recent years the region has liberalized the sector, which led to a development of a vibrant private sector. The director said that development of the postal sector cannot take place without the involvement of the private sector. According to the EAC official, electronic commerce presents a great business opportunity for the postal sector. “This is because physical goods bought online have to be delivered physically to the buyer,” Wambugu said. “However, the challenge is for postal operators to develop strategies for exploiting the opportunities that ecommerce provides,” he said. Source: Daily News

East Africa Court of Justice (EACJ) has dropped a case filed by three Tanzanians challenging a decision by Kenya, Uganda and Rwanda to lock out their country from a tripartite deal to fast-track East African integration. The court allowed an application by Ally Msanga, David Makatha and John Bwenda to have the case discontinued, citing financial restrains that would not allow them to challenge the move by the three countries to have Tanzania out of the agreement. The tripartite agreement was to have the three nations carry out major infrastructure projects and trade together. The triumvirate, branded by a section of the media as a coalition of the willing, also mooted a political federation. “The applicants have sought to discontinue with the case. Since the respondents have no objection, the reference is marked as discontinued by consent of parties,’’ a bench composed of Justices Jean Butasi, Isaac Lenaola, Faustin Ntezilyayo, Monicah Mugenyi and Fakihi Jundu ruled. The three Tanzanian citizens had sued the Secretary General of the East African Community and the Attorney Generals of Kenya, Uganda and Rwanda, arguing that the three countries had broken a treaty that established the community when presidents Uhuru Kenyatta, Paul Kagame and decided Yoweri Museveni formed a block for development that side-lined Tanzania. The subject matter of the case was the resolutions and communiqués made at the meetings held by Kenya, Uganda and Rwanda on June 24 and 25, 2013, in Entebbe Uganda, August 28, 2013 in Mombasa, Kenya and October 28, 2013...

ARUSHA, Tanzania - The cost of doing business across the East African Community remain high, in spite of the efforts being made by Partner states and with the support of Development Partners. In addition, 24 non-tariff barriers (NTBs) still remain unresolved, the just-ended 16th ordinary EAC Summit was told in Nairobi. “This denies us the opportunity to unlock the immense potential of regional integration and starves businesses of innumerable opportunities,” President Uhuru Kenyatta of Kenya said during the 16th Summit of the regional leaders in Nairobi. He was handing over the Chair of the Summit to President Jakaya Kikwete of Tanzania. “To grow intra-Community trade, we need to implement decisive solutions without delay,” he said. The Kenyan leader said NTBs still complicate businesses in the region. These are also impediments to East Africa’s competitiveness as a global investment destination denying the EAC Bloc unaccountable business and investment opportunities. “NTBs must go. I am glad to note that our Council of Ministers (the policy organ of the Community) has introduced a legal framework aimed at moving this agenda forward,” he said. Kenyatta also acknowledged the high cost of roaming calls across the region, describing it as yet another unnecessary impediment to trade and communication in the bloc. “It is unacceptable that in many instances, calling outside our continent is much cheaper than communicating within our region,” he said. He called for urgent interventions by relevant regulatory authorities on the issue. However he appreciated the One-Area-Network initiated by Rwanda, Uganda and Kenya...

Regional legislators will from next week tour the EAC States to collect stakeholders’ views and submissions on the envisaged East African Community Electronic Transactions Bill 2014. East African Legislative Assembly (Eala) said the visit which involves the Committee on Communication, Trade and Investment starts today, ending on Thursday. The Committee chaired by Uganda’s Mukasa Mbidde, has split into two groups to be more effective. Members will undertake simultaneous tour of the capitals. “The first group shall visit Dar es Salaam, Nairobi and Kampala while the second group will be in Bujumbura, Kigali and Kampala,” Eala said in a press statement. Stakeholders to be visited include ministries responsible for ICT, finance, trade, commerce and tourism. Others are the offices of the Attorney General and the Law Reform Commissions as well as the Law Societies and enforcement agencies. The MPs are also expected to meet representatives of the private sector including the East African Business Council and the respective private sector federations in the partner States. Both groups then converge in Kampala, Uganda on March 4, 2015, to consider the views and synthesise the input into a report. The Bill was introduced as a private member’s Bill at the recent sitting in Arusha by Dr James Ndahiro. “The Bill aims at making provision for the use, security, facilitation and regulation of electronic communications and transactions to encourage the use or e-government service and to provide for related matters,” noted the regional parliament. In May last year, the East African Payments System was...

Germany's Foreign Minister Frank Walter Steinmeier is seeking to intensify ties between Germany and Africa. Berlin is particularly interested in countries that foster regional stability. Steinmeier's four-day trip took him to three countries - the Democratic Republic of Congo, Rwanda and Kenya - and its purpose is to forge new partnerships for Germany. There were occasional glitches. At the Nairobi museum, the minister was shown the start of a film with sound, but no pictures. But such mishaps did not stop the high-level cultural and scientific delegation from Germany engaging in a lively debate with Kenya's cultural elite about new forms of cooperation with Africa. Such cooperation is expected to acquire tangible shape at a newly created Humboldt Forum in Berlin starting in 2019. Cultivating a new relationship with Africa was the main goal of the foreign minister's four-day tour. In spite of the ongoing crises in Ukraine, the Middle East and Greece, Steinmeier went ahead with his Africa tour, the fourth in twelve months, to promote Germany's new Africa policy. "We have to look at Africa in a new way," Steinmeier said. Germany still tends to view Africa as the continent of crises and conflicts. "But this is no longer true for all of Africa, because there are also anchors of stability in which we are particularly interested," the German minister said. 'Where is Germany?' Steinmeier said one anchor of stability in the region was Rwanda, despite deficits in democratic governance and its tense relationship with its neighbor, the...

TANZANIA’S share of trade in the East African Community is expected to be further buoyed by rising exports from its growing manufacturing sector. Exports to East African Community partner states hit record high in 2013 with total trade turnover glossing over 1.5 billion US dollars, according to the East African Community Facts and Figures for 2014. The East African Community second largest economy had a positive balance of trade in the EAC region with a surplus of 723 million US dollars in 2013 up from a deficit amounting to 158.8 million US dollars in 2012. Compared with 2012, Tanzania’s intra-EAC trade grew by 26 per cent in 2013, with exports rising by an impressive 115 per cent, although imports declined by 41 per cent, the figures showed. Kenya remained Tanzania’s main EAC trade partner, with trade flows totalling 1.2 billion US dollars. Information from the Ministry of East African Cooperation shows the main exports to the East African Community region include machines, fertilizers, cement, electrical equipments, ships and boats equipments, cereals, oil products and their distillations, paper and textiles. However, Tanzania’s exports to the EAC constitute a minor share out of the country’s total exports in 2013 which reached about 8.5 billion US dollars, according to Bank of Tanzania reports. Tanzania main exports partners are India, Japan, China, United Arab Emirates, Netherlands and Germany. Tanzania major exports are agricultural commodities with tobacco, coffee, cotton, cashew nuts, tea and cloves being the most important. Other exports include gold and manufactured goods....