National seed review teams from seven Common Market for Eastern and Southern Africa (Comesa) member states have launched harmonised national seed laws. The teams from Kenya, Uganda, Rwanda, Burundi, Zimbabwe, Zambia and Malawi meeting in Nairobi backed the new laws meant to improve the movement of seeds across the region. Agriculture Cabinet Secretary Willy Bett described the move as a historic opportunity to collectively reflect on how best to plan and mitigate risks that face the agriculture sector in the region. Historically, the regulatory environment surrounding seed production and certification has made it costly to do business in this sector, discouraging private sector companies from investing in innovation and expanded production.  The new laws are expected to bring about consistency in seed certification. Source: Standard Digital

East African Community member states are divided on whether to implement the ban on importation of used clothes and leather products, amid concerns that individual countries’ interests are overriding regional policies. Burundi, Uganda, Kenya, Rwanda and Tanzania agreed in 2016 to ban the importation of secondhand clothes and leather products and restrict the use of old vehicles in the region by 2018, in order to boost their industrialisation programmes. But one year on, Kenya has signalled that it will not respect the 2018 deadline on the grounds that it lacks the capacity to meet both the domestic and export demand for textiles. Criticism The decision has sparked criticism, with Dr Mukhisa Kituyi, Secretary-General of the United Nations Conference on Trade and Development, the UN body dealing with trade, investment and development, saying it is ill-advised. The Secondary Materials and Recycled Textiles Association (Smart), a US industry association representing used clothing businesses, filed a petition with the USTR on March 21, saying the ban was undesirable. The US imported more than $1 billions worth of textiles and apparel from sub-Saharan Africa under Agoa in 2015, according to available data. Bowing to pressure Observers say that Kenya is bowing to pressure by lobbyists who petitioned the US Trade Representative (USTR) to cancel the Africa Growth and Opportunity Act (Agoa) pact with East African states for proposing to ban the importation of used clothes, a multimillion-dollar business. In its petition, Smart called for an out-of-cycle review on Kenya, Rwanda, Tanzania and Uganda’s eligibility...

Regional industries are struggling to remain afloat amid an onslaught from imports of finished goods. The manufacturing sector growth has remained depressed at an average of 4.7 per cent annually in recent years, and its contribution to GDP has continued to shrink to less than 10 per cent in the East African Community countries, save for Tanzania. Industrialists attribute this to the region’s exportation of raw materials and importation of finished goods, a trend that is suffocating local companies. Many have scaled down their operations and others have closed shop. About 70 per cent of the leather produced in the region is exported as raw, wet blue and crust, while tanneries continue to operate at less than 40 per cent of capacity due to lack of a reliable supply of raw materials. In the pharmaceutical industry, East African manufacturers account for only 30 per cent of the market share, with imports commanding 70 per cent. Scaled down business Over the past five years, a number of regional companies — Eveready East Africa, Sameer, Kuguru Foods — have shut down their operations. Although the region has identified strategic industries such as chemicals, plastics and paints, automotive, agro-food, pharmaceuticals and cosmetics, cotton, textile and apparel and leather and footwear as key to the growth of manufacturing, regional companies account for only about 20 per cent of the products on the market. “We are importing stuff we can produce,” said Ali Mufuruki, Infotech Investment Group chairman and chief executive officer. “We need to...

Public debt in most sub-Sahara Africa will continue to balloon as governments borrow to finance infrastructure projects unless private sector investments increase, experts have warned. In East Africa, governments are on a borrowing spree to finance key infrastructure projects in transport, energy, water and sanitation. But a new report by the World Bank says that only increased participation by private investors in these projects will help countries close the infrastructure financing deficit. Estimates by the World Bank show that sub-Sahara Africa requires about $100 billion annually to invest in infrastructure projects in order to accelerate economic growth by as much as 2.6 percentage points per year. But the continent is only able to mobilise half of this financing through borrowing, bilateral agreements, domestic revenues, development financial institutions and public-private partnerships, leaving a massive deficit. However, governments can close this gap by creating an environment that allows for private investors to pump resources into projects. Financing complexities Currently, private participation in infrastructure projects in Africa is extremely low, largely due to limited public sector capability, insufficient political will, policy uncertainty and a weak regulatory environment. Private investors have also shunned the continent due to financing complexities attributable to narrow financial markets, higher actual and provisional risks, longer project durations, significant cost overruns and currency mismatches. While countries like Brazil and Turkey have managed to attract $433 billion and $124 billion in private capital respectively, sub-Sahara has only managed to mobilise $77 billion over the past decade. “Many transformational projects have enormous...

East Africa’s stock exchanges are finding it difficult to convince small and medium-sized companies to sell their shares to the public, as many of them are family-owned and not ready for the strict regulations and public scrutiny. Nairobi Securities Exchange and Dar es Salaam Stock Exchange have listed just five companies each since the launch of the SME trading platforms five years ago, while Rwanda Securities Exchange and Ugandan Securities Exchange have not attracted any listings to their SME segments. Executive director of the Rwanda Capital Markets Authority Robert Mathu said family-owned businesses are reluctant to undergo scrutiny. “In as much as the requirements for SME listing are lighter, we expect some very basic fundamental things to be put in place including a minimum of three directors of which 30 per cent (one director) must be independent,” Mr Mathu told The EastAfrican. “We have been talking to the SMEs. The biggest challenge is change of behaviour, but this is inevitable because we are a capital market. They need to open up to people who want to give them money,” he added. Challenges Ugandan Securities Exchange launched its Growth Enterprise Market Segment (Gems) in 2013. Charles Nsamba, the communications manager at the Uganda Capital Markets Authority, said the challenge has been the informal nature of the SMEs and the requirement for proper corporate governance structures and book keeping standards. “We have come to the realisation that this needs to be addressed, and in the 10-year master plan that is to be...

China has said it is ready to finance the construction of the standard gauge railway from Kisumu in Kenya to Uganda and Rwanda as long as the three countries agree to handle the project jointly. According to Beijing, such an agreement among the three countries would minimise political risks and plug missing links. There have been fears that the viability of the SGR within Kenya and beyond could be undermined by failing to link landlocked countries to the Mombasa port because of financial or other considerations. Chinese Prime Minister Li Keqiang told Kenyan President Uhuru Kenyatta at the China Africa Summit in Beijing two weeks ago to discuss the extension of the railway line from Kisumu to Kampala and then Kigali with Presidents Yoweri Museveni and Paul Kagame. Kenya State House spokesman Manoah Esipisu said Mr Li was clear that China would fund those sections as a regional project. “The president already spoke with the leaders of Uganda and Rwanda on the possibility of sending a joint team to negotiate for financing of the remaining portion,” said Mr Esipisu. He said Kenya was now waiting for Kampala and Kigali’s response before planning an SGR beyond Kisumu. “The viability of the (Nairobi to Kisumu) the line is okay. One feature of the SGR investment to Kisumu is the building of a modern port there. Kisumu to Malaba is viable with Uganda and Rwanda on board,” Mr Esipisu said. Difficult terrain On May 31, President Uhuru Kenyatta launched the operations of the first...

The European Union has signed two Financing Agreements for a total amount of 68 million Euros to finance implementation of two programmes in the COMESA region. These are; Trade Facilitation programme (53 million Euros) and Small Scale Cross-Border Trade programme (15 million Euros). The Ambassador of the European Union to Zambia and Representative to COMESA, H.E. Alessandro Mariani, and COMESA Secretary General, Sindiso Ngwenya, signed the two agreements. The funds are part of the COMESA specific envelope of 85 million euros provided by the European Union under the 11th European Development Fund (EDF) Regional Indicative Programme for the East African, Southern African and Indian Ocean (EA-SA-IO) region signed in June 2015 for the period 2014 – 2020. The trade facilitation programme is meant to reduce the cost of doing business and moving goods in the COMESA region. The programme has identified five key priority areas for support, namely; monitoring and resolution of Non-Tariff Barriers (NTBs); implementation of the World Trade Organization – Trade Facilitation Agreement; coordinated border management and trade and transport facilitation along selected corridors and border posts. Others are the implementation of harmonized, science based Sanitary and Phyto-sanitary (SPS) and Technical Standards and support to trade negotiations/promotion covering trade in services, free movement of persons and trade negotiations. The beneficiaries of the programme will primarily be the Member States of COMESA and the private sector/traders in the COMESA/Tripartite region, with the COMESA Secretariat playing a coordination and facilitation role. The programme on small-scale cross-border trade aims at increasing...

The EALA members passed the resolution after receiving and debating a report on sensitisation activities in partner states, themed: ‘EAC Integration Agenda: Accessing the Gains. ” Under Speaker Dan Kidega, members from the five countries adopted, with few amendments, the general recommendations put before them by the team that issued the joint report after each country had compiled its anecdote. The members of the report compilation team are Tanzania’s Nderakindo Kessy, Kenya’s Judith Pareno, Ugandan Chris Opaka-Okumu and Ms Patricia Hajabakiga of Rwanda. Moving the motion in the House, Ms Hajabakiga argued that a conclusion was needed on the report annex regarding the harmonisation and mutual recognition of academic and professional qualifications. The EALA called for the synchronisation of immigration laws in all partner states in terms of work permits and free movement of persons. “There is need to provide similar Certificate of Origin at all EAC custom border posts to ease trade and avoid forgeries. Let the Summit of Heads of State upgrade Kiswahili as one of the EAC official languages,” she said. The MP further underscored the need to address fear of loss of employment through deliberate measures like facilitation of skilful nationals in Kiswahili, English and French languages to take up teaching positions in the needy partner states and develop specific programmes for unskilled labour and small and medium entrepreneurs. “We have to develop an EAC strategy for development of skills and competitiveness to boost productivity through vocational training, science and technology as well as expedite harmonisation...

What is the role of the East Africa Business Council in driving industrialisation in the region? EABC has a primary role of ensuring the creation of enabling policies that not only support the business sector to increase its competitiveness, but which are also conducive to enhancing opportunity for attractive returns to investment. However, there are still challenges toward the full realisation of potential benefits and advantages presented by the EAC integration. It is these challenges that have seen the manufacturing sector developing at slow pace besides contributing minimally to regional GDP. Several industries set up in the region operate at below capacity and one of the prevailing factors is the high cost of doing business in the bloc coupled with several barriers to accessing the wider regional market. We can do better as a region, but we (government, private sector and other stakeholders) need to take deliberate steps to improve the business environment. How do you rate manufacturing sector in terms of contribution to regional GDP? While the EAC region has been registering significant economic growth averaging over 6 per cent for years, the performance of the manufacturing sector is discouraging. Apart from modest growth of the regional manufacturing sector of 4.7 per cent, its contribution to the regional GDP has continued to shrink to less than 10 per cent. Between 2000 and 2017, the contribution of manufacturing sector to GDP of individual EAC partner states, has been shrinking, except in Tanzania. Some experts attribute the low industrialisation process in...

Djibouti has formally inaugurated its 690-hectare Doraleh Multipurpose Port, heightening competition with Kenya for regional maritime business. Djibouti port is the main point of entry for goods from Asia, and also serves landlocked Ethiopia which recently opened the Chinese funded 752 kilometre-Addis Ababa-Djibouti railway. Kenya had in 2012 signed a joint pact with Ethiopia and South Sudan to build a corridor linking their economies to the 32-berth port being built at Lamu. Djibouti’s Doraleh port opened on May 24 and features a container terminal with yard capacity of 200,000 TEUs, a break bulk terminal with six million tonnes per year capacity, and a bulk terminal capable of handling two million tonnes per year, among other facilities. It cost $590 million (Sh61 billion) venture has capacity to accommodate 100,000 deadweight tonnage vessels. “With this new world class infrastructure, Djibouti confirms its position as a major trading hub for the continent. We are proud to show the world our capacity to deliver major infrastructure projects — some of the most technologically advanced on the continent,” Djibouti Ports and Free Zones Authority ( DPFZA) chairman Aboubaker Omar Hadi said in a statement. Mombasa port and Tanzania’s Dar es Salaam port are traditional competitors but the Kenyan government plans a huge new port at Lamu, while Tanzania is developing Bagamoyo port. Tanzanian authorities expect Bagamoyo port to handle 20 million containers a year, 25 times more than Dar es Salaam port. Kenya’s planned Lamu port is expected to be just as big. Apart from serving their own...