NAIROBI — Kenya may abandon 10 years of negotiating a trade deal with the EU as part of the five-nation East African Community and go it alone, to avoid having duties of as much as 30% slapped on its exports from October. A so-called Economic Partnership Agreement (EPA) between Kenya, Uganda, Tanzania, Rwanda and Burundi and the EU is on hold after Tanzania’s government said two weeks ago it was reluctant to sign any deal because of "recent developments affecting the bloc’s union". The UK voted in a referendum on June 23 to withdraw from the bloc, ending a 40-year partnership. Uganda said last week it also wanted to delay signing the deal. "We would like to sign it together; the desire is that we sign it together," Kenyan foreign secretary Amina Mohammed said in an interview in the capital, Nairobi, last week. "If we get to a stage where we can’t do that then we also have the right to make our own sovereign decisions." The negotiated EPA would give members of the East African Community immediate duty-free quota-free access to the EU for all exports. The Brexit decision is complicating trade negotiations as ministers from around the world gather this week for the 14th United Nations Conference on Trade and Development (Unctad) in Nairobi, where the EPA accord has been scheduled to be signed. The EU imported goods worth €2.6bn from the East African Community last year, data from the European Commission shows. Kenya exported 126-billion shillings ($1.2bn)...

KIGALI, (Xinhua) -- The long anticipated Continental Free Trade Area (CFTA) project is expected to set off next year, a top African Union Commission (AU) official revealed on Wednesday. Fatima Acyl, the Commissioner for Trade and Industry said that CFTA projects has secured 20 million U.S. dollars funding for the initial plans that comprises of trade in goods, trade in services, investment and intellectual property. “The trade in goods is expected to include tariff liberalization, rules of origin, dispute resolution, trade facilitation and customs procedures,” Acyl told Xinhua in an interview at the ongoing 27th African Union Summit in Kigali, Rwanda. She said that the AU is currently developing a capacity building plan in accordance with the needs expressed by member states before rolling out activities. Out of the amount secured so far from development partners, AU member states have contributed 3 million U.S. dollars for 2016 and 4.9 million U.S. dollars for the year 2017. She attributed trade and industry as the catalyst for Africa’s development adding that once the CFTA comes into force there will be increased competitiveness in industrial products through the harnessing of the potential of economies in a broader continental market. Acyl noted that the initiative will also help increase the rate of diversification and transformation of Africa’s economy, better allocation of resources, reduced price amongst the countries and reduced vulnerability of Africa to external trade shocks. She said that besides introducing Africa’s electronic passport, so far 10 countries avail visas to their citizens on...

This comes as the United Nations Conference on Trade and Development (Unctad) enters its second day in Nairobi today. The event, themed ‘From Decision to Action: Moving Towards an Inclusive and Equitable Global Economic Environment for Trade and Development,’ has attracted 194 countries who hope to agree on a win-win formula for trade. Yesterday, the event opened with focus on sustainable investments. Various leaders are also gathering to share on how public-private partnerships can bridge the over Sh250 trillion investment gap. But with many African countries depending on the commodities market, a discussion dubbed ‘Breaking the Chains of Commodity Dependence’ was accorded more significance. Participants had two days, from last Friday, to discuss how countries could adapt to the twin shocks of lower commodities prices and shrinking demand from emerging economies. According to the latest study by Unctad, it is estimated that some commodity-dependent developing countries are losing as much as 67 per cent of their billion dollar export earnings due to trade inaccurate invoicing. The study, which is the first to analyse this issue for specific countries and the respective commodities, found that trade mis-invoicing is among the largest drivers of illicit financial flows from developing countries. Released during the Unctad Global Commodities Forum,the study analyses commodities such as cocoa, copper, gold and oil from countries like Chile, Côte d’Ivoire, Nigeria, South Africa and Zambia. Wrong invoicing, according to Unctad findings, costs such countries valuable foreign exchange earnings, taxes and income that might otherwise have been spent on development....

Dealers in second-hand clothes and shoes now have a reprieve after it emerged that member states of the East African Community (EAC) may not enforce a ban — imposed early last year — on these items for the next three years. Ronah Serwadda, the acting director at Uganda’s Ministry of East African Affairs said that the presidents agreed that a three-year grace period is necessary to conduct a study to find out whether the region has the capacity to produce its own garments once the ban on secondhand clothes and shoes becomes operational. “Bringing used clothes and shoes into the region is not helping us to develop our industries,” she toldThe EastAfrican. “Studies will help us find out whether we have the skills, cotton and yarn to produce enough to replace the products that will be banned.” The presidential directive to ban the importation of used clothes is aimed at boosting the domestic textile industry. Speaking at the launch of the United Nations Economic Commission for Africa (Uneca) report dubbed Transformative Industrial Policy for Africa in Kampala last week, Ms Serwadda said that the three-year grace period would also allow the region to take stock of which countries have the capacity to produce which products. While experts at the meeting termed the EAC’s focus on its textiles sector as a step in the right direction, they said that there is a need for the region to do more than just take stock of its production capacities. Rogers Mukwaya, an economic...

After a year of a political crisis, the East African Community last week declared Burundi safe enough to host its activities. But human-rights organisations believe it is a “false calm” in which violence could erupt at any time due to the economic slowdown and ethnic tensions. They say the country is governed through repression that is hidden from the public eye. The Intra-Burundi Dialogue resumed in Arusha on Tuesday, but representatives of five parties that participated in Burundi’s general election boycotted the second round of peace talks facilitated by former Tanzanian president Benjamin Mkapa. The government officials walked out protesting the presence of some participants they accuse of planning to overthrow President Pierre Nkurunziza’s regime. Mr Mkapa had travelled to Belgium to meet key opposition stakeholders in an effort to end to the crisis that has rocked the country for more than a year. But this did not go down well with the government, which maintains that it will not negotiate with those who organised the failed coup last year. “The long awaited truth will not come from Arusha, because the dialogue outside the country is for selfish politicians,” said Jelase Ndabirabe, spokesman for the ruling party CNDD-FDD. However, members of civil society criticised the government’s rigid stand on the talks. “It is not for the government to refuse to dialogue with people who are opposed to its policies. Dialogue is normally with those you have a disagreement with, and not your allies,” said Gabriel Rufyiri, a civil society leader....

Tanzania may never sign Economic Partnership Agreements (EPA) deal so as to protect Chinese-brokered industrialisation plan and safeguard its national budget. Sources privy to the issue within the Ministry of Industry, Trade and Investment confided to The EastAfrican that Dar es Salaam has declined to sign the deal that would turn the country into a source of raw material for European Industries. On different occasions, Tanzanian officials have said that Dar es Salaam is reconsidering an earlier decision to make sure that it is done to the best interest of the country. Susan Kolimba, Deputy Minister for Foreign Affairs, East African, Regional and International Co-operation, said Tanzania is only cautious on signing the EPAs and it has gone back to government discussions before it is deliberated. “At this stage we cannot say we are will sign or not but we must make sure that we sign or decline to the best interests of our people…we are still discussing to the Government level,” she said. Clarifying on contentious issues, Minister for Trade, Industries and Investment Charles Mwijage Tanzania concerned is that the EPAs proposed zero rate for all imported goods will put Tanzania on a losing end. “Under the Common External Tariff of the EAC when you raw material you charge zero percent levy, while intermediate products attract 10percent and finished products are charge 25 per cent while under…all these will not be there under the EPAs; we have to discuss this and see how we can lose under these agreements,”...

In the days after Brexit, markets plunged, the pound sterling went into free fall, a prime minister resigned and the future not only of the UK, but also the European Union seemed uncertain. Beyond the reasons that divided people over this vote and the economic and political ramifications, is a growing frustration with inter-governmental integration models. Why then – with the woes of the European Union so visible – is Africa forging ahead with an ambitious plan to accelerate the free movement of Africans and integrate national economies beyond border communities and physical proximity? There are three reasons for these interesting points of divergence: The first is that the context in Europe and Africa is dramatically different. The European Union is the most integrated region globally. For at least 50 years, Europeans have enjoyed the benefits of integration. A large part of the EU population has never known what it is like to be asked for visas while travelling in the region, or seek work permits to work elsewhere in Europe. On the contrary, Africa is the most fragmented continent worldwide, and its people suffer the cost of non-integration on a daily basis. This fragmentation was imposed on Africa, and we are now working to reversethisprocess, without violating the principle of sovereignty. The second reason is the difference in the models of governance between the European Union and the African Union. The European Commission has the power to make regulatory decisions on behalf of all EU members. This very centralised...

In the days after Brexit, markets plunged, the pound went into free fall, a prime minister resigned and the future of the UK and the European Union seemed uncertain. Beyond the reasons that divided people for this vote, and beyond its economic and political ramifications, it’s clear that there is a growing frustration with inter-governmental integration models. Why then – with the woes of the European Union so visible – is Africa forging ahead with an ambitious plan to accelerate the free movement of Africans and integrate national economies beyond border communities and physical proximity? There are three reasons why Africans want greater integration between their countries. Firstly, the contexts between Europe and Africa are dramatically different. The EU is the most integrated region globally, and we’ve watched over the last 50 years as Europeans have enjoyed the benefits of integration. A large population of the EU has never known what it is to have to demand visas while travelling in the region, or seek work permits to work elsewhere in Europe than their home countries. Meanwhile, Africans have a completely different experience to this. Africa is the most fragmented continent worldwide, and its people suffer the cost of non-integration on a daily basis. This fragmentation was imposed on Africa. But now we are working to reverse this process, without violating the principle of sovereignty. Having said that, this year’s 27th African Union Summit took place in Rwanda only three weeks after the Brexit vote. Should pro-African leaders be worried...

Members of the East African Community are split down the middle again after Uganda joined Tanzania in pulling out of signing a trade pact that is key to continued access to the European Union market without paying duty. Although Kenya, Rwanda and Burundi are ready to sign the Economic Partnership Agreement (EPA) with the EU, World Trade Organisation rules do not allow countries aligned to a trade bloc to sign up individually. Uganda indicated last week that it was not going to sign until the bloc had reached a common position on all issues. “Everyone, including the EU is now agreed that we don’t sign,”  said Julius Onen, the Permanent Secretary in Uganda’s Ministry of Trade. “We must have a common position on all the issues. As EAC, we maintain solidarity and want to move together as a common market. It’s now the agreed position, even for the EU, that we have to sign together,” he added. A week ago, Aziz Mlima, Permanent Secretary in Tanzania’s Ministry of East Africa, said the country would not sign the agreement following the vote by Britons to leave the EU. “Our experts have analysed the pact and established that it will not be to our local industry’s benefit. Signing this pact at the moment would expose young EAC countries to harsh economic conditions in post-Brexit Europe,” Dr Mlima said. On Thursday, Tanzania’s Minister for Trade, Industries and Investment Charles Mwijage said Britain was Tanzania’s key trade partner in Europe. “Internationally, we trade with Britain, China, India and South Africa. When...

The African Union Passport that is expected to be officially launched during the 27th African Union Summit is considered a prodigious triumph for the continent and it will ease free movement of people, spur economic growth and development as well as promote Intra-African trade. Regional trade integration has long been a strategic objective for Africa yet, despite some success in eliminating non-tariff barriers within regional communities, the African market remains highly fragmented. A range of non-tariff and regulatory barriers still raise transaction costs and limit the movement of goods, services, people and capital across borders throughout Africa. With the promotion of Intra-African trade, it will boost and ease doing business within African countries which later will reduce the trade deficit among African nations. According to the Rwanda’s Foreign Affairs Minister Louise Mushikiwabo, the issuance of African passport is among the African strategic initiative intended to come as a possible rescue to disband all the restrictions to move which will eventually create a conducive environment for Africans to trade with each other. “Rwanda is ready for the AU Passport issuance. Other countries will also be working towards implementation of this decision. The free movement of people in Africa will spur our economic growth,” she said during a press conference today 14 July 2016 organised in the sidelines of the African Union Summit currently holding at the Kigali Convention Center (KCC), in Rwanda. During the Ordinary Session of the Assembly of the African Union that convenes on Sunday this week, African Heads...