BAGAMOYO — In its heyday, Bagamayo was a gateway to the heart of Africa for colonisers, with trade goods surging in from the Indian Ocean, and timber, ivory and countless slaves exported from the east coast harbour. Then Bagamoyo, which looks out towards the island of Zanzibar, fell on lean times for more than a century. Now, Tanzania is planning an $11bn project to make it the region’s biggest port and an engine of Africa’s boom. The Chinese-backed project would dwarf Kenya’s port at Mombasa, East Africa’s trade gateway some 300km to the north, and include an industrial zone and rail and road links to capitalise on growth in a region hoping to exploit new oil and gas finds. "It will be the engine for economic activity, not only for Bagamoyo but for the entire region," said district executive Ibrahim Matovu, speaking from offices overlooking beaches where ship-builders hammer out wooden dhows as they have for centuries. Many doubt the plan can succeed and ask if Bagamoyo is even the right location for a port, given it is just 75km up the coast from Dar es Salaam and far from gas deposits off Tanzania’s southern coast. Politics also plays a role. President Jakaya Kikwete comes from Bagamoyo and many see the port as his legacy project. But a groundbreaking ceremony was delayed from July and the project is unlikely to be revived during an election season that culminates in October, when his successor will be chosen. Also, Tanzania faces a...

Gaborone — The Minister of Trade and Industry, Mr Vincent Seretse recently attended the meetings of the SADC task force on regional economic integration and the SADC Council of Ministers respectively. A press release from the ministry stated that the former meeting, fed into the latter, which considered inter alia the following: Council considered the update in relation to the progress made towards the launching of the Continental Free Trade Agreement (CFTA) negotiations in July 2015 by the African Union heads of state and government. To that end, the release said the council had urged SADC member states to prepare for the launch with the view to frontloading industrialisation so that it can take the centre stage alongside market integration. "Council appreciated the progress on the ongoing negotiations for the Tripartite Free Trade Agreement (TFTA) between SADC, the East African Community (EAC), and the Common Market for East and Southern Africa (COMESA)," reads the release. It said the council had instructed the SADC policy organs to meet in advance of the launch of the TFTA by heads of state and government in June 2015 in Egypt, and to the extent possible, harmonise SADC positions leading thereto. Furthermore, it says the council has also endorsed the SADC candidate for the presidency of the African Development Bank, Mr Thomas Sakala, and urged member states to give him material and/or other support in his campaign for the position and also considered and recommended to summit, for approval, the resolution on the establishment of...

Lusaka- The planned launch of the Grand Tripartite Free Trade Area (TFTA) by three African Regional Economic Communities earmarked for Egypt by the middle of this year may be delayed after it emerged that stakeholders involved in discussions have reached a deadlock on various phsytosanitary and other trade related issues mainly affecting land locked countries. A report from by the Technical Working Group meeting held in Malawi recently reveals that the Common Market for Eastern and Southern Africa (COMESA); Southern African Development Community (SADC) and the East African Community (EAC) have failed to agree on key trade related issues, which were raised at the meeting over the planned launch of the FTA which had been pushed to May this year from December last year. Over the years, the three regional economic blocs have been making frantic efforts to have their 26-member states come together to form one common market commonly referred to as the Tripartite Free Trade Area. The enlarged FTA will create a wider market covering 26 countries in Eastern and Southern Africa, nearly half of the African Union membership, with a combined population of approximately 600 million people spanning from Cape to Cairo. However, the Malawi meeting failed to agree on some key trade issues relating to phsytosanitary standards, which deal with dairy, fish products, rules of origin for various products, as well as other areas relating to imports mainly for landlocked countries such as Botswana, Malawi, Zambia and Zimbabwe. The Working Technical Group’s report seen by The...

Gitega — As part of its objective to increase the participation of women in the electoral process in Burundi, the EAC Secretariat, together with joint efforts from the Common Market for Eastern and Southern Africa (COMESA), held plenary discussions to women groups in the town of Gitega, Burundi from 11th - 12th March, 2015. The participants were drawn from the provinces of Gitega, Karuzi, Muramvya, Kayanza and Mwaro, in the northern and central parts of the country. The women's dialogue brought together women leaders from political parties; civil society organizations (CSOs); faith-based organizations (FBOs); national and local administration; security and defence; members of the press and eminent persons from the EAC and COMESA regions, to a roundtable discussion to tackle the challenges facing women in the electoral process. Some challenges were identified as the fear of women to participate in the forthcoming elections due to discouraging messages from politicians, concerns of fewer women candidates to vote for, inadequate participation of women in intra-party policy formulation, lack of self-belief among women that they can achieve anything thus the lack of mutual support for women candidates, lack of awareness on the existing electoral laws, lack of common understanding on the provisions of the Arusha Agreement and the Constitution in regards to the number of presidential terms, poor security and lack of resources for women to participate in electoral politics. In response to these challenges, eminent persons from the EAC-COMESA committed themselves to working in solidarity with the Burundi Women in the period...

The East African partner states have taken the final step towards implementing the World Trade Organisation Trade Facilitation Agreement, which is expected to widen the market for the region’s goods and services. The five partner states are expected to ratify the WTO protocol before March 31 in order to show their commitment to the trade pact they recently signed with the US. It is expected that once the protocol is implemented, it will help reduce the cost of doing business between the EAC and other economies by almost 14.5 per cent, adding to trade reforms already underway in the region. James Kiiru, an external trade officer at Kenya’s Ministry of Foreign Affairs and International Trade, said final preparations are underway to ratify the protocol not only because of the deadline but also because Kenya will be hosting the WTO summit towards the end of the year. “A well-functioning trade facilitation regime will allow easier and faster flow of goods across borders. The EAC will be viewed as progressive and ready to attract investments and also promote intra-regional trade,” said Mr Kiiru. In the new deal, recently signed in the US, the two parties agreed to adopt the WTO Trade Facilitation Agreement signed in Bali in 2013, which commits countries to ensure that trade issues, including Customs, documentation procedures along their transport corridors and ports are completely abolished to reduce the cost of doing business. “The US has committed to supporting the member states to implement the WTO agreement and to...

International donors have announced more than $2 billion worth of financing to East African governments to undertake infrastructure projects. The World Bank, European Union, Japan and China have announced new partnerships with several East African governments and development partners to improve infrastructure in the region. But, even with increased funding, huge capital infrastructure projects in the region dropped significantly in 2014. According to the Deloitte African Construction Trends Report 2014, only 51 projects were identified in the region, compared with 93 recorded the previous year, representing a 55 per cent drop. The total value of the projects also dropped from $67 billion to $60 billion. Mark Smith, head of infrastructure and capital projects at Deloitte East Africa, noted that there are many projects in the planning phase. Kenya hosted the bulk of large capital infrastructure projects implemented in East Africa in 2014, followed by Uganda, Ethiopia, Tanzania and Rwanda. The transport sector accounted for 59 per cent of all the projects in Kenya, representing a growth of 17 per cent. About 37 per cent of projects were in energy. Now, the oil and gas sector in the region requires $60-$70 billion. In January, the World Bank announced a $1.2 billion loan for the revival of the region’s inland waterways on Lakes Victoria and Tanganyika and enhancing the capacity and efficiency of the two main Indian Ocean ports of Dar es Salaam and Mombasa. In September last year, the World Bank, the UK’s Department for International Development (DfID), TradeMark Africa and...

East African traders will have access to a wider market following the adoption of a uniform value addition regime by three economic blocs in Africa. Twenty-six African countries, that are members of the Common Market for Eastern and Southern Africa (Comesa), the South African Development Community (SADC) and the East Africa Community (EAC), adopted the EAC benchmark required for goods to qualify for duty-free access to the combined free trade area during a recent tripartite negotiation meeting in Malawi. This effectively opens the doors for EAC goods that could not access markets such as South Africa, Egypt, Ethiopia and Eritrea. The countries will in June combine to form the Tripartite Free Trade Area (TFTA) – Africa’s biggest trading bloc. The 26 countries are home to 625 million people and boast a GDP of $ 1.2 trillion — about 58 per cent of Africa’s economy. Under the revised EAC rules of origin, goods on which 35 per cent of the ex-works price is raised locally qualify to access the market of member countries duty-free. The rules are yet to be gazetted to gain legal force. Unlike ex-factory price, ex-works price allows more goods to benefit because it includes distribution costs. The TFTA will be launched at the third Tripartite Free Trade Area Summit scheduled for Egypt in June. The partner states have been debating whether to use ex-works or ex-factory as the interim entry point into the TFTA. Ex-works price includes distribution costs like transport and logistics to the shop yard...

Three African economic blocs will merge into a new 27-nation free-trade zone in an agreement to be signed in Cairo in June when Heads of State from the regions meet at a joint summit. The deal will combine the Common Market for Eastern and Southern Africa (Comesa), the South African Development Community (SADC), and the East African Community (EAC). This will create a free trade union capturing more than 60 per cent of the continent’s economic activity and investors will easily reach a market of 625 million consumers from South Africa to Egypt. A preliminary programme released by Mr Sindiso Ngwenya, the Comesa secretary-general and chair of a tripartite taskforce on the planned merger, indicates that the leaders of the 27 member States are expected to congregate on June 10 to sign the Free Trade Area (FTA) agreement. “The tripartite FTA popularly known as the grand Free Trade Area will be the largest economic bloc on the continent and the launching pad for the establishment of the Continental Free Trade Area (CFTA) in 2017,” Comesa said. SADC, EAC and the Comesa have since 2008 been negotiating a road map to merge into a free trade area with a GDP of about $1.2 trillion (Sh109 trillion). “The launching of the tripartite Free Trade Area is the first phase of implementing a developmental regional integration strategy that places high priority on infrastructure development, industrialisation and free movement of business persons,” Comesa said in a brief. Although African economies are growing fast, second...

KIGALI, Rwanda - President Paul Kagame has welcomed the private sector as a formal partner in realizing the objectives of the Northern Corridor Project Initiative. The Initiative is intended to mainly streamline logistics along the main trunk route between Mombasa and the East African hinterland. “I am thankful to the Heads of State who have also agreed to this and extended their invitations to the private sector federations for their participation. The participation will add value to our work and we are pleased to move forward together,” Kagame said. The Rwandan President was speaking during the 9thNorthern Corridor Infrastructure Project Summit (NCIP) in the presence of President Yoweri Museveni of Uganda, President Uhuru Kenyatta of Kenya, President Jakaya Mwisho Kikwete of Tanzania, President Salva Kiir Mayardit of South Sudan, Burundi’s Second Vice President Dr. Gervais Rufyiki, Ethiopia’s Minister of Foreign Affairs Tedros Adhanom Ghebreyesus and the East African Community Secretary General. Others in attendance were regional ministers and private sector federations representatives. Kagame said, “We are all encouraged to be more involved and to stay on the course and to focus on the desired outcomes. With political will and prompt follow through we can achieve the tangible results the people of our region need and deserve,” he said. Kagame thanked the Heads of State for their steadfast commitment to the project for infrastructure and other key issues which are also part of the broader integration objectives of the EAC. Now the crucial thing is to see how fast these objectives...

Last week, Anatoly Nahayo, a law expert, was speaking recently after launching his book titled ‘East African Community Tax Harmonisation’. He was at the East African Community headquarters in Arusha advising his listeners on the wisdom for working in tandem when it comes to regional tax issues. Partner states have been talking quietly and carefully over the issue, but it is extremely sensitive. In most cases each country is doing its own thing, especially tax incentives. Nahana said there are limited avenues to query the decision of finance ministers to exempt individual business people or companies For some time now, the World Bank and International Monetary Fund have been politely and firmly advising regional governments to dispense with tax incentives. We are told tax incentives are bad in theory and bad in practice. Mainly because they distort company investment decisions and competition between companies. We are further told that giving tax breaks to businesses to attract investments and jobs actually ends up hurting the economy. The government will lose substantial revenue, which means difficulties in funding education, infrastructure improvements and other public services. Most of the EAC countries have dangled this tax incentive sweet with varying success. However, in recent years the most suitable way has been to set up export processing zones where companies can enjoy them. Kenya likes to lure textiles manfacturers to set up shop in special zones expected to be up and running in two to three years. Tax breaks are a central part of the...