Railroad investment is taking off around the African continent, including a Chinese-financed $5.2 billion project linking Nairobi and Mombasa. The line will eventually link the port city with South Sudan, the Democratic Republic of Congo, and Burundi. Nigeria, Tanzania, and other countries have also undertaken massive railroad expansion and rehabilitation projects in the past years in an effort to improve infrastructure and spur economic development. Broadly speaking, infrastructure has been shown to have positive impacts on “income growth and, more tentatively, on distributive equality,” according to a World Bank review paper on the subject. Researchers Remi Jedwab and Alexander Moradi of George Washington University and the University of Sussex, respectively, also found that “modern transportation technology can produce economic change in poor countries by reducing trade costs, integrating markets, and facilitating the circulation of ideas.” In poor or remote regions with higher costs to trade, Jedwab and Moradi conclude that transportation could “permit increased commercialization of agriculture, start an urbanization process, and lay out the foundations of future industrialization.” That means that African countries could truly benefit from rail expansion, especially considering the lack of infrastructure currently in place. Paul Collier, economics professor and director of the Centre for the Study of African Economies at Oxford University, noted in a 2011 article for the IMF that “Nigeria, home to one-fifth of the population of sub-Saharan Africa and one of its most densely populated countries, has but one kilometer of rail for every 262 square kilometers [of land].” By comparison, the...

UNCERTAINTY has gripped fresh produce exporters after trade talks between the East African Community and the European Commission over the long dragging economic partnership agreement temporarily stalled. The draft agreement signed by the five EAC member states on September 20, was last week rejected by the EU team. [caption id="attachment_4017" align="alignleft" width="300"] ANXIETY: Workers at the Oserian flower farm on May 15. The Kenya Flower Council says the country may lose out to Ethiopia, Ecuador and Colombia[/caption] The move has sent Kenya, which had taken upon herself to lobby the rest of the EAC countries and further seek consensus with the EU in a bid to expedite the conclusion of the talks, back to the drawing board. EU's resident Trade and Communications counsellor Christophe De Vroey yesterday said there is no scheduled meeting between the two parties after the “EAC text” was turned down by the EU negotiators. “The text that was signed by the (EAC) council was not accepted, but we are looking for another meeting in the next few weeks,” De Vroey told the Star on the phone. Kenya yesterday became the only African country to lose out on the duty and quota-free market access to the 28-member EU, following the deadlock over the labourious EPA negotiations. This is because the rest of the EAC countries – Tanzania, Uganda, Rwanda and Burundi – are cushioned through Everything-But-Arms trade agreement for least developed countries. Other African countries exporting to the EU are also safe from higher taxation regime after...

The East African Community's (EAC) last-minute efforts to have negotiations of the contentious Economic Partnership Agreement (EPA) concluded before today's deadline were dealt a huge blow after European Union (EU) delegates failed to turn up for a decisive meeting in Nairobi last week. The EU Director-General of Trade was supposed to lead a delegation to Nairobi to attend what had initially been tipped to be "the last round of negotiation" in which the proposed trade pact would finally be initialised before final ratification by the EAC ministers of trade. The meeting was supposed to last four days, from September 23 to 26. Sources have intimated to The New Times that the 'boycott' was a last-minute development that left the EAC delegation of high ranking government officials surprised. "To be honest, I don't know why they didn't turn up; they didn't communicate to us," Peter Kiguta, director-general of customs and trade at the EAC Secretariat, told The New Times by telephone. Emmanuel Hategeka, the permanent secretary in the Ministry of Trade and Industry, who was part of Rwanda's delegation to the negotiations, also said he was surprised by the EU team's absence. Before the meeting, permanent secretaries of trade ministries, who formed EAC's delegation, had high hopes that the meetings would finally bring years of negotiations to a conclusion and even had slim hopes of having the deal signed before deadline. Now all that is shuttered. "I think you can now say that we will indeed miss the deadline, that's for...

ARUSHA, TANZANIA: Trade unions in the region have called for enabling of workers to move freely and reside within East Africa Community states in a bid to address unemployment. Speaking in Arusha Tuesday, Chairman the East African Trade Union Confederation ( EATUC) Francis said enabling workers to move freely and work anywhere within the region remained the critical first step in addressing unemployment problems and spreading the benefit of spreading skilled labour among partner states. Atwoli urged individual unions from Kenya, Tanzania (mainaland), Zanzibar and Uganda to commit to ensuring that many hindrances to labour mobility are overcome. The EATUC chairman faulted EAC’s Common Market protocol ratified in 2010 for restricting free movement of labour within the region. “The protocol prohibits students from other partner states from engaging in employment in the host country except internships and industrial attachment which is against the principle of non-discrimination.” Atwoli said. EATUC said it will lobby EAC summit, which brings together all presidents of member states with a hope that the community will implement its request. Source: Standard Digital

East Africa is making last-ditch efforts to save Kenyan exporters from incurring losses of more than $140 million a year following failure to broker a trade deal that would have allowed continued free access to the European Union market. East African Community (EAC) ministers who met in Arusha, Tanzania, on September 20 agreed to push for a meeting with their EU counterparts, possibly before the September 30 deadline, to discuss the latter’s new proposals. Top on the agenda is to convince the EU to prepare a legal instrument to enable a smooth transition of Kenya’s exports from the duty-free regime of the Market Access Regulation (MAR) to the Generalised System of Preferences (GSP) regime. “We want the EU to prepare paper work to enable us go to the GSP. We must lobby for Kenya to be put in that GSP category. This is because it is not practical for the two teams to ratify EPA (Economic Partnership Agreement) by Tuesday (September 30). So we need a document that will enable us to be included in the GSP category so that business continues smoothly,” said Kenya’s Principal Secretary Karanja Kibicho, who is EAC’s negotiation team leader. Although Kenya’s exports to the EU will no longer enjoy duty-free, quota-free access to the EU market until the EPA is ratified by the two trade blocs, products under the EU-GSP tariff are subjected to lower taxation than those under the normal EU tariff. Fresh roses and cut flowers, for instance, would attract import duty...

Trading with the European Union (EU) as a regional bloc will enable East African Community (EAC) states reduce on their external trade deficit, Amb. Valentine Rugwabiza, the Minister for EAC affairs, has said. Amb. Rugwabiza was explaining the benefits of the long-awaited EAC-EU trade pact to the regional economies. Over the weekend, EAC partner states reached a consensus on the contentious clauses in the Economic Partnership Agreement with the EU. This, the minister said, allows them to embark on the final negotiations with the EU which started in 2007. "The bilateral trade agreement will allow favourable tax regimes, guarantee market access for goods from both blocs, enable technology transfer to the region, create value-addition for products and services, and create jobs," she told journalists in Kigali yesterday. Rugwabiza noted that the region's low export earnings were mainly as a result of the low production levels of goods and services, high costs of exporting and the high quality standard levels required by European markets. "This pact will enable us diversify the level of exports, undertake the EAC infrastructure projects in order to lower transport costs, and gauge how much to invest in order for our businesses to be able to meet EU quality standards," she said. The EU has for long been a good market for products and services from EAC and the reverse is also true. In the first half of this year, Rwanda's total exports increased by 1.2 per cent in value to $ 293.53 million (Rwf202 billion) from...

A regional business lobby has called on the East African Community (EAC) secretariat and its member states to address the challenges that are crippling trade within the bloc. The East African Business Council (EABC), an apex organisation of the business community in the region, through its chairman Felix Mosha said this during this year’s annual Secretary-General’s forum in Entebbe, Uganda. “Some of these challenges include, the low pace of implementation of the EAC common market protocol and harmonisation of laws and policies in the region,” said Mr Mosha in a statement read on his behalf by an EABC board member John Bosco Rusagara. The East African Common Market Protocol, established in 2010, provides for the free movement of goods, labour, services, and capital, meant to boost trade and investments in the region. The chairman noted that work permits were still highly priced, with heavy paperwork involved which in the end makes the process long and tedious. Mr Mosha remarked that new non-tariff barriers (NTBs) were now cropping up as the region is grappling to eliminate the old ones. EAC Secretary-General Richard Sezibera also echoed the same sentiments at the forum. “To date, 55 NTBs have been resolved, 22 remain unresolved and six newly identified,” Mr Sezibera remarked. READ: Non-tariff barriers: Case of one step forward, two steps back for region Other challenges facing the region include the portability of the social security benefits within the EAC common market. “There is a challenge of food security and climate change mitigation and...

Rwanda intends to collect data to examine the benefit of East African Community integration and document the country's share to the regional bloc, a senior top government official has said This comes after the survey done by the EAC ministry preliminarily indicating that 56% of Rwandans do not understand the significance of integration process. This could continue hurting the country's full benefit to the bloc. Innocent Safari, the permanent secretary in the Ministry of East African Community (MINEAC), in Kigali, said investing in assessing the integration benefit will help to highlight loopholes and point at possible solutions. "We want to scrutinize exactly how the integration has impacted Rwandans," he said in an interview adding that "People should know how to tap into regional opportunities for the economic development of our country and the region". Though Rwanda joined the community almost seven years ago, tangible benefits started accruing just within one year when three leaders Paul Kagame, Yoweri Museveni and Uhuru Kenyatta agreed to spearhead the fast tracking of integration projects on Northern corridor. Since the inception of the Northern corridor summit among three countries, various projects are already under implementation. Among the projects is the use of single tourist visa that allows tourists to tour three countries at cheaper price. At US$100 a tourist can move and visit different attractions without paying extra charges. From April to July 2014, 452 tourists have used the Single Tourist Visas collected by Rwanda which is worth $45,200 accounting for Rwanda's share of $18,080...

Trade negotiations are not an easy task given the high stakes involved in safeguarding the interests of parties involved. Considering the long-term nature of most trade pacts, it is critical that parties involved in the process agree on the most favourable terms so as to avoid the pain of loss and mistrust. For almost a decade Kenya and other East African Community countries have been buried in talks with the European Union for a new trade deal to replace the current one where developing countries are granted preferential market access for their goods. Unfortunately, the deadline for the talks has lapsed before the EU and the EAC could conclude an Economic Partnership Agreement (EPA). This means that trade between the two blocs will from October 1 enter a higher tax bracket because a successful deal on EPA would have accorded them duty-free, quota-free access to European markets. The gravity of this matter is reflected by the fact that Kenyan exporters now face taxes of about Sh100 million every week until such a time that the two blocs shall conclude and a sign a new trade deal. This situation is rather unfortunate for Kenyan exporters who are already faced with rising cost of production. The new taxes are expected to make Kenyan goods even more expensive to EU citizens, hence impacting on sales volumes and in turn reducing foreign exchange inflows to the country. While we appreciate the efforts by Kenya and other EAC countries in finding the most favourable deals...

NAIROBI, Sept. 22 (Xinhua) -- Kenya will join Uganda and Rwanda to launch the East Africa Visa during this year's Japan Association of Travel Agents (JATA) Tourism Expo to be held later this week, tourism marketers said on Monday. Kenya Tourism Board (KTB) Managing Director Muriithi Ndegwa said the KTB is seeking to increase Kenya's market share by continuously positioning the country as the ideal tourism destination in Africa, however, lack of a regional common visa has been a major drawback towards marketing East Africa as a single tourist destination. "Japan has tremendous growth potential given that 16.5 million Japanese engage in outbound travel annually," Ndegwa said, adding the KTB will be exhibiting at the Expo. Foreign tour operators have complained of cumbersome immigration procedures at border entry points for those who wish to cover various circuits in East Africa. In particular, the requirement for tourists to disembark from Kenya tour vehicles to board the Tanzanian vehicles while crossing into Tanzania has been a major point of complain by the international and local tour operators. Kenya allows tour vehicles from the East Africa Community (EAC) to operate in the country. Previously, foreign tourists visiting EAC countries are required to stamp their passports in each EAC country visited. The EAC is also in the final stages of implementing a single visa for the five member states. The single tourist visa resulted from a joint initiative and decision made by the Heads of State of the respective countries. Before the establishment of...