Lusaka- Trade proponents are arguing that the enhancement of regional integration and creation of a grand Tripartite Free Trade Area (TFTA) among the three Southern and East African economic trading blocs cannot be delayed any longer as the global market is yearning for more products from the continent while the groupings need to increase intra-trade among member countries. In recent years, the Southern African Development Community (SADC), the Common Market for Eastern and Southern Africa (COMESA) as well as the East African Community (EAC), have been seeking to join forces in fostering regional integration through trade. Commonly known as the Tripartite Free Trade Area (TFTA), the integrated market will comprise the COMESA, the EAC and SADC. The establishment of a single and enlarged market is expected to boost intra-regional trade and deepen regional integration through improved investment flows and enhanced competition. In fact, this integrated arrangement will create a combined population of some 625 million people covering half of the member states of the African Union (AU) and a Gross Domestic Product of about US$1.2 trillion. SADC, COMESA and EAC have agreed to hold the tripartite FTA summit in Egypt to kick start the process, with the gathering scheduled for the end of May 2015. Africa’s longstanding vision is to be an integrated, prosperous and united continent. This vision was supposed to come closer to reality in December last year when the largest integrated market covering 26 countries in eastern and southern Africa (the Grand FTA) was initially earmarked to...

While the business community is upbeat about benefits to accrue when Kagitumba-Mirama Hills One-stop Border Post (OSBP) on Rwanda-Uganda border opens in April, there is need to extend financial services to enable people make full use of the new facility. This was noted Thursday as the Minister for East African Community Affairs, Valentine Rugwabiza, visited the border post to assess progress on the construction of the 24-hour OSBP. The project aims at facilitating easy movement of people and their goods by reducing the time transporters spend clearing goods. It is projected that this will in turn improve intra-regional trade as well as boost revenue collection. Gerard Mahoro, a customs officer, told the minister that while all is set for the April launch, "the picture will not be complete if basic financial services such as banking and insurance are not here to facilitate trade." The nearest commercial bank, Banque Populaire du Rwanda, is 10km away in Matimba trading centre while insurance firms such as Corar and Radiant are far away in Nyagatare. Construction of the OSBP, with $10.5 million funding from TradeMark Africa, is at 95 percent. By April, all the infrastructure-customs and immigration offices, police post, customs inspection sheds and warehouse, clearing and forwarding offices will be ready. Also to be built are roads, water treatment and storage tanks, parking yards and staff quarters. Immigration officials say over 233, 000 tourists crossed this border point in 2013/14. Rugwabiza urged the people to work together and make full use of this...

Kenya’s exports to the East African Community have fallen, largely due to stiff competition from cheap Chinese imports and its own unfavourable tax regime. A survey by the Ministry of East African Community Affairs shows that the volume of Kenya’s exports to the EAC has declined sharply with the major challenge being unfair competition from Chinese traders and the country’s value added tax (VAT) system that has become an impediment to export business. According to the survey, competition from Chinese goods and the unfavourable tax regime account for over 25 per cent and 10 per cent of the total decline in Kenya’s exports to the EAC countries respectively. Other taxation measures such as the industrial development fee (IDF) as well as the railway development fund make Kenyan manufactured goods 5 per cent more expensive than imports from Comesa and SADC countries, according to the report seen by The EastAfrican. Electronic single window The report further says that the implementation of an electronic single window system to facilitate cross-border trade is yet to boost trade. It points out a number of obstacles in the implementation of the platform, particularly related to the understanding of the system itself, the complexity associated with compliance requirements, project support requirements and overall change management programmes. “This explains the further decline in Kenyan exports, particularly to Uganda in 2014,” says the report. “In fact, one of the biggest impediments to the implementation of the SWS was frequent system downtimes that significantly delayed the export process,” the...

Uganda, Tanzania and Burundi are yet to secure internal approvals for the Double Taxation Agreement (DTA) to operate in East Africa, five years after the deal was struck. This has left companies with cross-border investments paying tax twice on their incomes. The DTA among the EAC member states was signed on November 30, 2010, but there has been little progress in terms of fast-tracking internal approvals by member countries, including securing Cabinet or parliamentary sanctions to implement the pact. Countries must seek either Cabinet or parliamentary approval to adopt international treaties. The initial deadline was July last year, but it was extended to November 2014 after all the EAC member countries failed to meet the timelines. The agreement is expected to lower taxes and increase cross-border investments. “We expect everybody to be ready by now because that was the last deadline,” an official from Kenya’s National Treasury who did not want to be named said. Only Kenya and Rwanda are ready for the operationalisation of the agreement. Kenya’s Principal Secretary in charge of East African Affairs John Konchellah said the two countries have deposited their internal consent documents with the EAC Secretariat and dismissed fears that there is lack of commitment from their regional counterparts. “Basically there is a lot of goodwill on the integration of the EAC because it is in the interest of everybody that we go in that direction,” Mr Konchella told The EastAfrican last week. Currently, EAC governments tax income earned by investors both in the...

Four Kenyan one-stop border posts are nearing completion and will officially be commissioned by April, setting the stage for faster clearance of goods and travellers. According to Moses Orwa, the project manager of the Lunga Lunga post, the post is almost complete while senior communications manager at Trade Mark East Africa Nelson Karanja said operations at the Holili post in Taita Taveta would start soon. Malaba and Busia will be completed by July and end of the year, respectively. “One-stop border posts envisage a scenario where all exit and entry formalities are handled at one location – in the country of destination, an initiative that will save time and cut down on costs,” said EAC principal secretary John Konchellah. The time taken to clear trucks at the Lunga Lunga border post is expected to reduce by more than 48 hours. It sometimes takes more than two days for a truck to cross the border but once the facility is complete, trucks will take between 20 to 30 minutes or a maximum of two hours during peak time. Currently, clearance of a bus with an average of 60 passengers takes more than two hours but with the new system, the time taken could fall to 45 minutes, according to Kenya Revenue Authority officials at the border. “Effective border management can turn around the economy of an area because it is a catalyst to development. Residents of this area should also know that they are key to the success of the border...

The cost of international road freight services and Rwanda's own industry, in particular, has for some years been on the agenda of the Government of Rwanda at all levels of national policy formulation and implementation. Vision 2020 refers to the "natural barrier" that transport costs form in opposition to development, while EDPRS 1 put an emphasis on the need to reduce transport costs and identified the transport and logistics industry as one of the great potential to Rwanda. EDPRS 1 went on to put specific emphasis on the need to improve the institutional framework and strengthen the capacity of partners involved in the sector, where the National Industrial Policy (2011) noted that foreign-based operators provide the majority of trade logistics services in Rwanda and went on to argue that barriers to trade such as cabotage prohibition are part of the headwind facing the Rwandan transport industry. It is important to note that Rwanda has made some important progress in dealing with challenges in this sector. Currently, Rwandan vehicles are able to get an international transit license directly from Rwanda Revenue Authority (RRA), rather than having to obtain permission for loading in other countries. The National Monitoring Committee (NMC) is actively lobbying against NTBs within the region. There are no excise duties charged on commercial vehicles and Rwanda has succeeded in obtaining remissions of duty on heavy trucks to reduce the cost of importing these vehicles. The EAC Vehicle Load Control Bill, currently under negotiations, aims to standardise allowable vehicle weights...

KIGALI, Rwanda - The refurbished Kagitumba border facilities are 95% complete and soon will become a modern One Stop Border Post. The project is funded by TradeMark Africa (TMA) which has channeled $10.5million on the Rwandan side. The Rwanda Minister of East African Community Affairs Amb. Valentine Rugwabiza last week was given a guided tour of the complex to access the progress and mobilize all the stakeholders especially other EAC members to find out how ready they are for the border post. “The EAC, which Rwanda is a member is really at the corner of Rwanda’s economic strategy and the economic development since it represents more than 20% of Rwanda’s global trade. This is why we are focusing mainly on border posts which make it much easier to trade with our neighbors than it is to trade with far away countries,” Minister Rugwabiza said soon after the tour at the border post. The Kagitumba border post is shared between Rwanda and her neighbor in Uganda. The construction of the One Stop Border Post at Kagitumba and Mirama border follows the Summit Directives regarding the implementation of One Stop Border Post in EAC which is one of the trade facilitation projects provided for in the Customs Union Protocol. The objective of this infrastructure project is to reduce border-crossing bureaucracy through eliminating double clearing on both sides of the border and reducing time it takes to cross the border hence easing doing business, transport and moving of people between two countries. “We...

A senior official of African Union (AU) said Tuesday the long-awaited tripartite free trade area between three regional blocs is expected to be launched in May in Cairo, Egypt. To boost intra-Africa trade, AU heads of state in January 2012 decided to establish the continental free trade area (CFTA) by 2017 between the Common Market for Eastern and Southern Africa (COMESA), the East African Community (EAC), and the Southern African Development Community (SADC). In a press briefing in the framework of the 24th AU summit at the AU headquarters in Ethiopia's capital Addis Ababa, Fatima Haram Acyl, AU Commissioner for Trade and Industry, said the tripartite free trade area is something to be encouraged as a roadmap for the continental free trade area in Africa. "This is something to be encouraged because as a roadmap for the continental free trade area, this is the first point that was noted by the member states, by the heads of states. We are very happy that it will advance and we are launching this tripartite FTA in May of 2015 in Cairo," she said. With 26 countries, 625 million people, and 1.2 trillion U.S. dollar gross domestic products (GDP), the three regional blocs said earlier they would be completing the tripartite free trade area in December of 2014, recalled the commissioner. "I just want to say that 26 member countries as I say 625 million people and 1.2 trillion of GDP. So, it is very important for Africa and that's why actually, we...

The buying and selling of goods and services between businesses in neighbouring EAC Partner States with the seller being in one Partner State and the buyer in the other, for example a company or an individual business person in Rwanda selling to a company in Burundi. Cross Border Trade (CBT) plays an important role in poverty reduction as it provides trading opportunities for a good number of people, for example women, are the most active traders along Rwanda's borders. The EAC Partner States are recognizant that women make a significant contribution towards the process of socio-economic transformation and sustainable growth and that it is impossible to implement effective programmes for the economic and social development of the Partner States without the full participation of women. Studies that were conducted indicate that 74% of informal cross-border trade is conducted by women and for the majority it is their only source of income. In addition, women trade predominately in lower value, low profit products. Gender patterns in the composition of traded goods have been noticed: women sell mainly foodstuffs, for example, manioc flour, tomatoes, corn, onions, fish etc alongside a few other specific products like palm oil, while men sell a wider variety of products, often with a higher value like secondhand clothing, beer, household items and other fastmoving consumable goods. However, some cross border women traders across the region do not use available formal systems/structures for most of their transactions most of them do not really understand the benefits gained through...

Leadership in public service requires not only intellect but also empathy. Empathy is fundamental to good governance considering that we mostly elect our leaders on notions of trust and empathy. However, one of the major debates in the region is the issue of leaders clinging onto power. It is not just the presidents, look at members of parliament and other office bearers. It is, therefore, my wish that fellow East Africans could embrace our region’s integration a little faster than it otherwise appears to take for us to witness true democratic governance and register improved quality of life for all citizens. The roadmap to attainment of our regional integration is making headway. The Common Market Protocol and the Customs Union are at a very tangible stage. Soon, the Monetary Union which will see East Africa as a block adopt and use a Single Currency by 2024 or even earlier than that. It is vital to note that the East African Monetary Union Protocol once in force will give birth to the EAC Central Bank as a monitoring and regulatory institution though partner states will maintain their Central Banks. With the EAC vision, a prosperous, competitive, secure and politically united East Africa, coupled with the line mission of widening and deepening economic, political, social and cultural integration in order to improve the quality of life of the people of East Africa through increased competitiveness, value added production, trade and investment. It is evident the earlier we fully up our support and...