By Ivan R. Mugisha The proposed Tripartite Free Trade Area between the East African Community, Comesa and Southern African Development Community could potentially eliminate intra-regional trade bottlenecks and boost exports among member states by at least 30 per cent. According to the EAC Secretariat, trade between the EAC and the Common Market for East and Central Africa in 2014 amounted to $2.7 billion while flows between the EAC and SADC stood at $3 billion. The United Nations Economic Commission for Africa (Uneca) projects that the gains could even be bigger if non-tariff barriers between the three sub-Saharan Africa blocs are eliminated when the tripartite arrangement comes into force. The Tripartite Free Trade Area was proposed in Kampala in October 2008, during a heads of state summit. The deal involves 26 countries with a total GDP of $1.2 trillion and a population of over 638 million people. "Our estimates suggest that the TFTA could increase intra-regional trade by as much as 30 per cent. The manufacturing sector will benefit most, giving the needed boost to industrialisation," said Andrew Mold, officer in charge of the sub-regional office for Eastern Africa at Uneca in Kigali. In two weeks, African heads of state and government are scheduled to arrive in Kigali for the Global African Investment Summit, where the progress of the TFTA will be discussed. The deal is expected to come into force after being ratified by at least two-thirds of the 26 member states. But last month, member states differed on the...

THE Parliamentary Committee for Industry, Trade and Environment plans to invite Prime Minister Kassim Majaliwa, key stakeholders and ministries responsible for ports’ management to a meeting in a bid to find a solution to the decline of cargo volume at Dar es Salaam Port. The country’s major sea gateway has been experiencing massive decline in transit cargo traffic in recent months. The reason for the decline ranges from the country’s introduction of Value Added Tax (VAT) on transit goods and strict tax collection measures imposed by the government. Speaking to reporters shortly after holding a number of meetings yesterday with port stakeholders and Tanzania Port Authority (TPA) together with Tanzania Revenue Authority (TRA), the Committee Chairman, Dr Dalaly Kafumu, hinted that the meeting largely aims at addressing the situation. "We held a meeting with port stakeholders earlier. We heard their concerns and recommendations that were geared to bring the port back on track as there is a steep decline of cargo now as compared to previous years. The port authority has admitted that the cargo volume has dropped owing to a range of reasons. There is a need for a joint meeting. We need to sit with the prime minister and other responsible ministers to chart out a solution for this mess,” he noted. Dar es Salaam Port is serving eight land locked countries making it one of the country's main source of income. Unfortunately, the port is now losing to other competitors due to what was mentioned by the...

Kenya stands to benefit from plans by Tanzania's parliament to terminate a bilateral Single Customs Territor deal with DR Congo. The Tanzania Parliamentary Standing Committee on infrastructure development advised the government to revisit the introduction of SCT on goods transported to DR Congo. According to the committee, the SCT which started last year has reduced cargo through the Dar es Salaam port. Under the arrangement the two countries adopted a destination model of clearance of goods where assessment and revenue collection is done at the first point of entry. The system has caused importers to abandon the Dar es Salaam port and opt for ports of neighbouring countries, Tanzania-Zambia Railway Authority (Tazara) committee deputy chairman Selemani Kakoso told the parliamentary committee last Monday. Tazara targeted to transport 200,000 tonnes of cargo in 2015/16 but managed only 128,105 tonnes, it said. KPA principal communication officer Hajj Masemo said Kenya is way ahead of the port of Dar es Salaam on effectiveness which has attracted regional players. “We are doing a lot of efficiency compared to Tanzania,” Hajj told the Star. In April, the Tanzania business community reported rising use of the Port of Mombasa, citing bureaucracies at Dar-es-Salaam port. The Kenya International Freight and Warehousing Association confirmed increased clearing of cargo destined for Tanzania. “The new systems in place have made importing through Mombasa faster and better,” Kifwa Mombasa region chairman Eric Gitonga said. The port of Mombasa is also riding on low transport costs along the Northern Corridor. The East...

Attention shifts to President John Magufuli as Kenya leads its integration partners to Arusha in a last-ditch effort to safeguard its free trade arrangement with Europe, amid stiff opposition from Tanzania. The East African Community’s extra-ordinary heads of state summit follows a surprise move by Tanzania to pull out of an earlier commitment that would see the bloc collectively sign Economic Partnership Agreements (EPAs) with Europe before the September 30 deadline. Kenya and Rwanda signed the pact in Brussels last week while Uganda said it would append its signature on Thursday during the Extra Ordinary Summit of the EAC heads of state. That technically leaves out only Tanzania as European Union had indicated it may not require Burundi to sign the deal yet until it resolves its internal political problem. South Sudan, the EAC’s newest member also does not need to sign the pact until it completes the two-year bloc membership assentation period. As chairman of the bloc’s heads of state summit, the decision made this week by President Magufuli will determine whether Kenya’s exports face taxes of between four and 24 per cent to enter EU market from October 1. Kenya’s Industrialisation and Enterprise Secretary Adan Mohamed who appeared before the EU Parliament’s International Trade Committee believes the bloc will not tax Kenya’s exports once it sees proof of commitment from EAC members. “The proposed summit will provide further impetus to the EPAs given the significance of the EU as a long term EAC trade and development partner,” Mr...

SOUTH Sudan, which was accepted to become the sixth member of the East African Community (EAC), last April, will today submit ‘instruments for ratification,’ at the EAC Headquarters. According to an official in the Public Relations Office at the EAC Secretariat, Mr Florian Mutabazi, the community’s Secretary General, Ambassador Liberat Mfumukeko, is scheduled to preside over the occasion of ‘Depositing of Instrument of Ratification on the accession to the treaty for the establishment of the EAC by the Republic of South Sudan.’ Essentially this means that the South Sudan president’s envoy would submit official documents that the government of the world’s newest country had signed to indicate Juba’s readiness to comply to the East African Community’s laws, regulations and ultimatums. Last April, President John Magufuli, in his capacity as the Chairperson of the East African Community’s Heads of State Summit led the delegation from South Sudan in signing the initial protocol allowing Juba to join the regional bloc. A month earlier, during their 17th Ordinary Summit held on 2nd March, 2016 here in Arusha, the EAC Heads of State received the report of the Council of Ministers on the negotiations for the admission of the Republic of South Sudan into the Community and decided to admit the Republic of South Sudan as a new member. The Summit then designated the Chairperson, President John Magufuli, to sign the Treaty of Accession with the Republic of South Sudan, which becomes the sixth member of the regional bloc, which was revived in 1999...

ARUSHA, TANZANIA – Tanzania and Ethiopia governments are in final arrangements to sign a 400-megawatt power purchase agreement on the sidelines of the next Eastern African Power Pool (EAPP) talks in Tanzania.  “The project aims at enabling East African Community (EAC) member states to identify sources of cheap electricity for increased power interchanges. Ethiopia has made progress in hydropower generation and is also endowed with abundant renewable energy resources. “These include untapped geothermal, solar and wind energy. At the moment Ethiopia is generating 6,000 megawatts, which can be accessible to neighbouring states,” Felchesmi Mramba, the Managing Director of the Tanzanian power utility company (TANESCO) said last week. Mramba, said the official signing of the power pact with Ethiopia would be preceded by the EAPP meeting in Arusha bringing together representatives, including lawyers, from all the member states. Countries forming the Eastern Africa Power Pool include Kenya, Rwanda, Burundi, Uganda, Ethiopia, Egypt, Sudan, the Democratic Republic of Congo (DRC), Eritrea and Tanzania. Mramba said installation of power generation and transmission facilities would not only foster economic integration but also cater for the region’s power needs for the next 25 years. Mramba said, “Interconnection of the power systems entails synchronisation of electricity supply services such that an area of power, abundance would offset shortages in another country, and vice-versa. Studies in 2009 established the technical and economic viability of the project to meet population growth demand” Ethiopia, through the Ethiopian Electric Power (EEP) authorities, has been exporting electricity to neighbouring countries like...

Last week I attended and made a presentation at a roundtable on manufacturing in Kenya hosted by the Overseas Development Institute (ODI). The roundtable was under ODI’s Supporting Economic Transformation Programme (SET), which is supported by DFID. As part of the roundtable I developed a paper on manufacturing in Kenya and thought it would be useful to share some insights I unearthed during my research on manufacturing in East Africa. At the moment, the manufacturing sector in Kenya is the largest in the east African region. However, in terms of growth other countries in East Africa are growing faster. Data from ODI indicate that the growth of the sector in Kenya is far slower than Ethiopia, Rwanda, Tanzania and Uganda. If this trend continues, other countries will begin to dominate manufacturing in the region. Further, governments in East Africa seem to be putting in more effort to build manufacturing through the creation of industrial parks in countries such as Ethiopia and, making land available for manufacturing particularly for labour intensive manufacturing. Uganda and Tanzania are also determinedly positioning themselves as investment destinations for manufacturing in Africa. This impetus needs to be more strongly echoed in Kenya from the highest levels of county and national government. Furthermore, while Kenya remains an attractive investment destination for manufacturing, other countries in the region are aggressively courting such investment. There is a growing sense that the bureaucracy and corruption in Kenya as well as difficulty in getting the right information on requirements linked to...

DAR ES SALAAM Tanzania (Xinhua) -- The Tanzania Ports Authority (TPA) said on Saturday the recent introduction of the Value Added Tax (VAT) on transit goods and the single customs territory have decreased business at the Dar es Salaam port by 42 percent since July. Deusdedit Kakoko, TPA Director General, said the port was now trying to lure back traders, especially from the Democratic Republic of Congo (DRC) who shunned the port following the introduction of the two services. Briefing a parliamentary committee on Industry, Trade and Investment and the ports stakeholders in Dar es Salaam, Kakoko said cut-throat competition at the Dar es Salaam port which has intensified has led to cargo diversion to other regional competing ports. He said, to lure them back the government would engage local stakeholders with the Congolese businessmen through a one-on-one sharing experience aimed at improving the business at the port. "I wish to extend an invitation for you (stakeholders) to join hands with TPA and undertake a vigorous promotional and customer awareness campaign in DRC," he said. Kakoko said since the introduction of the two services in July this year, business has dropped by 42 percent leading job losses in various sectors including freight forwarding and clearing companies and inland container deports. "We have already initiated the necessary preparations for the intended visit to the Kivu and Katanga provinces in the Eastern DRC,"said Kakoko. He appealed to the stakeholders to facilitate to their delegates in terms of air tickets, subsistence allowances and...

The last few months have seen some significant developments for African trade and integration. These advances come at a crucial time for African countries, which have been particularly hard hit by the slump in commodity prices, China’s economic downturn, and higher external borrowing costs. This has resulted in slower GDP growth than expected, currency fluctuations and reduced investment—particularly in resource-rich countries. Get the magazine, the app and full web access from $1 a week New dynamics are emerging as a result of two major developments: first, a set of agreements between regional African blocs and the European Union, as well as between African countries themselves. Second, Brexit may change the thrust of African trade with both the EU and Britain. Combined, they are likely to have some positive economic implications for Africa. Intra-African trade has comprised about 15 percent of Africa’s total trade over the last decade. This compares with intra-regional trade rates of, for example, 17 percent in South and Central America, and 62 percent in Asia. African exports to the EU have increased substantially in recent years, from €85 billion in 2004 to more than €150 billion in 2014. The recent trade and integration developments should raise economic activity and competitiveness in non-extractive sectors, leading to higher GDP growth and greater economic diversification. They are intended to boost intra-African trade, particularly in goods, and may increase African trade with the EU and Britain. Trade to drive economic integration In June, African leaders signed the Tripartite Free Trade Area agreement. This...

Tanzania Ports Authority (TPA) and Tanzania Zambia Railway Authority (TAZARA) have vowed to work together closely in a bid to enhance efficiency and offer cost effective services to customers. During their meeting which was held in Dar es Salaam recently, the Chiefs of the two authorities, Eng Deusdedit Kakoko of TPA and Eng Bruno Ching'andu of TAZARA agreed to have regular consultative meetings focusing on information sharing and strategising on efficient cargo handling. "We call upon all stakeholders to offer seamless transport services in order to reduce transport costs and transit times for assured business on the Dar es Salaam Corridor Route," Eng Kakoko said during the meeting. The meeting was also attended by Chief Executive Officer (CEO) of MOFED, the Zambian Government owned clearing firm, Mr. David Chimfwembe. About 99.7percent of all cargo from the port of Dar es Salaam is transported by road compared to 0.3 percent transported by rail which is not very economical. Transit traffic at Dar es Salaam port accounts for 34% of the total throughput and Zambia is the first transit customer whose traffic cargo has been growing from 1,830,005.00 in 2014 to 1,903,979.00 in 2015. Eng Ching'wandu noted that it is in the interest and vision of both parties to see cargo from the port transported via a vibrant railway network. "The vision calls for closer cooperation between all stakeholders in the transport chain," he said Source: Tanzania