The East African Community law on competition will come into force in December promising a boost to cross-border trade. The EAC Competition Act 2006 seeks, among other things, to promote fair trade and ensure consumer welfare and to establish the EAC Competition Authority. It grants consumers the legal right to take on unscrupulous traders who sell them substandard products and those who offer poor quality services. The EAC Council of Ministers recently decided that the law should become operational in December bringing to an end an eight-year delay occasioned by intermittent haggling and backpedalling by partner states. Trade specialists say that while some EAC partner states had enacted national competition Acts, these laws are deemed inadequate to deal with cross-border and multi-jurisdictional competition cases. They add that co-operation at the bilateral level may be enough to redress some non competitive and restrictive business practices, but a regional framework provides a more consistent and sustainable way of addressing these regional issues. The East African Business Council executive director, Mr Andrew Luzze said that as the cross border trade grows, a regional competition law becomes crucial to check unfair trade practices. Available statistics show that the EAC’s total intra-regional trade soared from $2 billion in 2005 to $5.8 billion in 2012, while the total intra-regional exports grew from $500 million to $3.2 billion in the period under review. “Without regional competition law, monopolies or firms with a lion’s market share can easily abuse their market dominance by engaging in such activities as...

Construction of the railway line from Tanzania to Burundi and Rwanda could start next year after the three countries hired a transaction advisor for the project. Canadian Pacific Consulting services (CPCS), railways transportation services consultancy firm is to source funding and investors in the planned railway line connecting the three countries. The hiring by the governments of Burundi, Rwanda and Tanzania, which are jointly funding the project, paves the way for CPCS to market the project to investors and ultimately attract financiers. A functional and reliable railway line along the Central corridor is seen as crucial in bringing down transport costs and also as key oto protecting roads, which are being damaged by heavy trucks. Information from the Dar es Salaam-Isaka-Kigali / Keza-Gitega-Musongati Railway project co-ordination office in Kigali indicates that the planned 1,672 kilometre standard gauge railway project is to cost the three countries $5 billion. And the model of investment is a private public partnership. It is also emerging that Chinese, Indian, African and German investors have expressed interest in the project. But what is holding back negotiations is that the three countries have no expertise in the private-public partnership mode of investment for railway project. “A note of no objection has been sent to African Development Bank and should the bank okay it, CPCS will start marketing the project to prospective investors,” said a source in the Rwanda Transport Development Agency. AfDB is a key financing agency of this project after studies that have informed the three...

A key parliamentary committee has endorsed the protocol laying the foundation for a monetary union that will see the five East African countries converge their currencies and increase commerce. The Committee on Regional Integration last week permitted the protocol, which was signed last year by the leaders of the five countries, and is asking Parliament to endorse the monetary union—which is expected to be in place within nine years. “It is convinced that the protocol for the establishment of the EAC Monetary Union will be beneficial to individual member States of the East African Community and therefore recommends that the House ratifies the protocol,” said the committee in an advice to MPs. The protocol allows Kenya, Uganda, Tanzania, Rwanda and Burundi to gradually converge their currencies and increase commerce. Established 13 years ago, the EAC with nearly 140 million people has already created a common market and a single customs union. The Cabinet approved the protocol and sought the nod of Parliament on July 22. “The existence of multiple currencies in the EAC region discourages trade and investment among partner States due to foreign exchange transactions costs,” read the Cabinet’s notice to Parliament. In the run-up to achieving a common currency, the East African Community (EAC) nations aim to harmonize monetary and fiscal policies and establish a common central bank. Kenya, Uganda, Tanzania and Rwanda already present their budgets simultaneously every June. “This implies that Central Bank of Kenya (CBK) shall not be responsible for formulating monetary policy, promoting price...

BUJUMBURA, Oct. 25 (Xinhua) -- Delegates from 26 countries of three regional African economic blocs on Friday began a two-day meeting here to spearhead the African Free Trade Area (FTA). The regional bodies are the East African Community (EAC), the Common Market for Eastern and Southern Africa (COMESA) and the Southern African Development Community (SADC). At the launch of the meeting, Burundian Second Vice-President Gervais Rufyikiri said the FTA will minimize administrative burdens of member states that participate in many regional economic organizations. "We're here as regional leaders to spearhead the process of greater continental economic integration towards the establishment of a Grand Africa Economic Community," said Rufyikiri. He said that governments in the three regional economic blocs are committed to promote collaboration, networking, to harmonize strategies and policies and to share information in order to reach an African Free Trade Area by 2017 as instructed by the African Union summit held in Addis Ababa, Ethiopia on Jan. 23-30, 2012. The Commissioner for Trade and Industry of the African Union, Fatima Acyl, who attended the meeting, urged governments to include the private sector in the process of reaching the African Free Trade Area. "The inclusion of the private sector in negotiations for the establishment of an effective Free Trade Area on the African continent is crucial," said Acyl. She said the preparation phase of the continental FTA negotiations requires the availability of financial resources for Trade negotiations. "Member states must take steps in mobilizing their own domestic resources instead of...

After more than a decade, the European Union and East African states announced last week that they had finalized negotiations to sign the Economic Partnership Agreement, overcoming one of the last major hurdles before the two blocs agree to open market access. The legal teams on both sides will now comb through the details of what the two blocs agreed upon before the heads of government sign and ratify the agreement. The EPA agreement, which had long courted controversy, is expected to provide legal certainty for businesses and open a long-term perspective for free and unlimited access to the EU market for products from Burundi, Kenya, Rwanda, Tanzania and Uganda. “The EAC region stands out for its dynamism, and ambition to develop as an integrated region. The comprehensive partnership agreement we have just reached is the best way in which we can support EAC’s aspirations”, said EU Commissioner for trade Karel De Gucht in a statement. In Uganda, the European Union applauded the conclusion of negotiations. The EU Head of Delegation to Uganda, Ambassador Kristian Schmidt, said: “I am truly delighted for Uganda. This is a new- generation trade agreement that will promote regional integration, greater value-addition in the East African region, while retaining very favourable conditions for completely quota-and-tariff-free market access to the EU’s 28 member states and 500 million consumers. This deal is good for Uganda, for East Africa and for the trade and investment partnership with the European Union.” A statement from the EU office in Uganda...

Arusha — HEADS of bureaus of standards from Kenya, Rwanda, Uganda, Burundi and Tanzania are meeting in Arusha for their regular committee meeting in which a total of 18 new standards are expected to be harmonised across the East African region. The Managing Director of the Kenya Bureau of Standards (KEBS) and Chairman of East African Standards Committee, Mr Charles Ongwae, stated here that the EAC member states will be harmonising 18 new standards as well as adopting 15 international ones to make the region more competitive when it comes to intra-region and international trading activities. The Director of Standards at the Trademark East Africa, Mr Jose Maciel, said the TMA has assisted the East African Community in the harmonization of 16 new standards. Speaking during the ongoing two-day 18th EA Standards Committee Meeting, Mr Ongwae explained that, so far; the five East African countries have managed to blend a total of 1,200 standards being accepted across their borders. The move has been described as helpful in facilitating trade, reducing costs of operation and speeding movement of goods within the bloc. Ms Edna Ndumbaro from the Tanzania Bureau of Standards (TBS) said among the issues to be addressed during the meeting was that of differing axle loads requirements for each country, which has remained a major stumbling block for transporters in the region. On transporters, the Director General of the Rwanda Standards Board (RSB), Dr Mark Cyubahiro Bagabe, admitted that there have been complaints regarding road regulations applying in different...

Clearing and Forwarding firms have rekindled their agitation for the suspension of the Single Customs Territory (SCT) programme, arguing that it will make them lose business to their counterparts from the neighbouring countries. To appreciate the gravity of the issues raised by the clearing agents, it is important to understand some facts about the SCT. SCT is one of the phases towards attaining the East African Customs Union. The Customs Union Protocol aims to facilitate regional trade through harmonisation of import duties and taxes, simplification of documentation processes, elimination of non-tariff barriers, among other targets. To achieve these objectives, The East African Community (EAC) set up the Directorate of Customs, whose mandate was to oversee the integration of the customs authorities. Therefore, SCT cannot be seen as an end in itself. Rather, it is a culmination of an elaborate but gradual process, including restructuring of the legal and institutional framework in the socioeconomic sectors. Further, the impact of SCT on trade and industry, movement of persons, sustainability of jobs, and revenue streams for the governments must be determined prior to its full roll-out. A section of the business community lauded the launching of the tripartite SCT by the governments of Uganda, Rwanda, and Kenya under the so-called “coalition of the willing”, saying it would boost regional integration and lower the cost doing business. However, the Kenya International Freight & Warehousing Association (Kifwa), the body representing the freight forwarders in Kenya, strongly opposed it, terming the directives as irregular and untimely....

THE cost of freight via the sea rose by 45 per cent last year due to few vessels plying on the East African coast routes, a logistics industry report shows. The East African logistics performance survey 2014 findings indicate the average cost for exporting and importing a standard 20 feet container from North America, South America, Asia, Europe and Middle East through the Mombasa and Dar es Salaam ports increased by 45 per cent in the year 2013. It says maritime freight rates for exports to North America now average $2,800 for a twenty foot container unit (TEU), making it the most expensive export destination. "It takes a long time from the moment a vessel order is placed to the time it is delivered for service," states the report. It adds that customs brokerage fees for inbound and outbound cargo entering the two EA ports also increased. According to the report, South America is the most expensive import destination with an average freight rates of $2,200 for a TEU. "Maritime freight rates to Europe stand at $2,000 for a twenty foot container unit...Those to the Middle East average $1,500 for a TEU. Rates to Asia average $600, making it the destination with the lowest freight rates," states the report published by the Shippers Council of East Africa. The report says air transport costs have remained steady since 2013 though adding that there is no transparency in the air freight charges. "While air freight charges have remained steady over the past...

Lack of uniform transfer pricing legislation in the region is affecting trade in the East African Community (EAC), business leaders have said. The leaders made the recommendation at the just-concluded East African Business Summit in Kigali last week. They urged regional governments to harmonise their transfer pricing laws, arguing that the absence of such legislation affects investment opportunities across the region. The business leaders advised governments to harmonise their laws in accordance with the Organisation for Economic Co-operation and Development (OECD) to enable companies to engage in cross-border trade more efficiently. Anne Eriksson, regional senior partner, PricewaterhouseCoopers (PwC), said uniform tax laws and procedures will promote trade between regional firms and support growth initiatives among EAC member states. Eriksson urged partner states overcome their fears and address the question of protectionism if trade is to thrive across the region. David Tarimo, a tax expert at PwC Tanzania, noted that transfer pricing regulations introduced by some partner states recently were making it difficult for companies within the bloc to trade with one another. He noted that having different laws could lead to market distortions and hurt regional economies. Tarimo said it is important to have a law that reflects the current business environment and which facilitates compliant businesses to move products in the EAC without hindrances. Business leaders were also not happy that some EAC tax authorities are imposing huge penalties relating to transfer pricing adjustments, which they say eats into their profits. Speaking at the summit Joseline Ogai, the acting...

KIGALI, Rwanda, Oct. 21, 2014 /PRNewswire/ -- President Paul Kagame says individual countries cannot develop with closed borders – urging the East African region to overcome the colonial mindset to be able to increase trade. Kagame was speaking at the annual East Africa Business Summit, attended by business executives and governments from Rwanda, Kenya, Uganda, Tanzania and Burundi. Kenya's President Uhuru Kenyatta,the Chairperson of East African community (EAC), attended the summit. Kagame said Rwanda and Kenya are benefiting from the single tourist visa, national ID for travel between the two countries and the work permits fees waiver. "When Rwanda and Kenya opened up, people from both sides benefited. If Rwanda cannot fear opening up to Kenya, why should other member states fear," Kagame said. Rwanda has granted work permits to 9,000 Kenyans. "In my office, I have had Kenyans, Tanzanians and even gone beyond to hire the British," Kagame said. "It's what people do that matters. We needed to fill gaps on skills," Kagame said. When landlocked Rwanda and Burundi in 2007 joined EAC, the population of the bloc grew to 153.12 Million. Rwanda accounts for over two thirds of EAC's intra-regional exports of coffee, tea and cocoa and nearly all its mineral exports, reflecting the country's use of its EAC neighbours as corridors for exporting its goods to global markets. The country's exports to EAC in first half of 2014 amounted to $97.8M while imports from the regional bloc are estimated at $247.8M. Rwanda mainly exports tea, raw hides...