For the typical entrepreneur, profit is the main motive. This, after all, is the presumed reward for taking on risk. The bottom-line often keeps executives awake at night. Progressively growing profits and keeping shareholders happy with handsome dividend payouts is the ultimate measure of how the business is doing and, by extension, how effective the leadership is. This is the way we have always looked at and evaluated business. Not anymore. PROFIT Profit, on its own, no longer offers an accurate measure of the success of today’s business. It is an insufficient measure that does not give the full picture of the state of a business. Impact is actually the new measure of success. Focusing only on profit without considering a business’ positive impact is outdated. The true measure of the success of a business is its impact on the wellbeing of people and the planet. Wellbeing is the ultimate measure of success. Social and environmental impact can no longer be ignored. The business model of the future is one that is keen on not only maximising profit, but also positive impact that benefits people and the planet. Business has to take the lead in prioritising an inclusive economy, where enterprise plays a role in promoting the greater good, broadening prosperity and tackling inequality. In the business environment today, massive prosperity and technological innovation notwithstanding, globalisation continues to intensify, leading to complex global issues that have negatively affected society. SOCIAL ILLS This ranges from massive environmental depletion and degradation due...

Experts from 14 regional countries including Rwanda will this week deliberate on how they can consolidate the strong performance of the region while ensuring the economic transformation needed to reduce poverty and achieve the Sustainable Development Goals. This will be during the Intergovernmental Committee of Experts (ICE) which meets in Moroni, Comoros, next week. It is organized by the United Nations Economic Commission for Africa (ECA) in partnership with the government of Comoros. “This will constitute an excellent opportunity for experts from the region to discuss some of the major bottlenecks and catalysts for growth,” said Andrew Mold, the acting director of the ECA sub-regional office in Eastern Africa. “There is also a special session dedicated to discussing the development trajectory of the host country, during which ECA’s Comoros profile will be presented. The session will focus on the country’s long-term growth strategy, and opportunities in the tourism and energy sectors.” According to the Commission, the growth rate of Eastern African countries has been among the fastest in the world in recent years, averaging 6.8 per cent between 2012 and 2015. However, it is noted that in 2016 and 2017, the regional growth rate declined to 5.6 per cent. The evolution of per capita income growth has reportedly been much more modest while instability has increased, and the meeting will focus on different sectors that constitute either catalysts or constraints to growth and structural transformation. It is noted that the expansion of the tourism sector, the vast potential of the...

President Paul Kagame has said that regional integration and close partnership between members of regional economic communities can fast-track development and prosperity for individual nations. Kagame was yesterday speaking at the Global Business Forum on Africa held in Dubai, United Arab Emirates. The session was moderated by John Defterios, the emerging Markets anchor at CNN UAE. The Head of State noted that regional integration in Africa would enable countries to get past divisions that have long prevented the continent from being as prosperous at it should. Citing the example of the East Africa Community integration, Kagame said the initiative has yielded positive impacts such as free movement of people, customs union and joint infrastructure projects. “If you look at the East African region, even more progress has been realised, for example, in the area of customs union, integration in the area of infrastructure that bring the countries of the East African Community together, whether it is telecommunication in the area of realising one area network, where there are no roaming charges,” Kagame said. Other impacts, he noted, include working together to implement reforms that cover aspects such as the economy and security that’s necessary. EAC integration has, among others, seen the liberalisation of free movement of people, goods and services, consequently increasing opportunities for the over 160 million citizens of the bloc. Four countries in the bloc (Kenya, Uganda, Rwanda and South Sudan) in 2014 rolled out the One Area Network, scrapping calls roaming rates which brought down the cost of...

On October 12th the New York Times brought the discussion of second hand clothing in East Africa to the mainstream. Unbeknownst to most in North America, the United States trades millions of dollars worth of used clothing to East African countries essentially tax free. African countries export duty free products to the United States in return. The bilateral trade agreement that makes this transaction possible, the African Growth Opportunity Act (AGOA), is the center of a controversy roiling African-US trade relations. Six East African countries (EACs) created a pact in Spring of 2017 that would increase tariffs on imported used clothing from the US with the eventual goal of an outright ban by 2019. By June, a US lobby, the Secondary Materials and Recycled Textiles Association (SMART), filed a petition with the United States government against limiting clothing imports. The grounds for this petition were that a ban on used clothing would induce disastrous economic effects for tens of thousands of American jobs as well as potentially violate the terms of the AGOA. The United States Trade Representative initiated an “out-of-cycle” review of three out of six countries – Rwanda, Tanzania, and Uganda – to assess the allegations made by SMART on June 20th. Rwandan President Paul Kagame and Finance Minister Claver Gatete fiercely defend the used clothing ban despite threats of sanctions from the United States. The goal, according to the finance minister, is to increase local production and “minimize the health risks that come with the used product”. Kagame also doubled down on...

A number of ports development projects across Africa may be pointing to a positive outlook for capacity expansion in the region, but the myriads of uncertainties in economic growth become a limiting factor. The United Nations in its new report tagged: "Review of Maritime Transport 2017," is optimistic that the projects, when realised, would aid trade facilitation in the region. However, projects such as the $1.5billion Lekki Deep Seaport in Nigeria, and the proposed $2.5billion Badagry Deep Seaport are currently facing challenges ranging from economic considerations to inconsistency in policies. The United Nations Conference on Trade and Development (UNCTAD) report noted that container port volume in Africa dropped by 1.2 per cent in 2016, but will grow by 1.1 per cent in 2017, and by 2.5 per cent by 2018. It, however, forecast that world seaborne trade will increase by 2.8 per cent in 2017, with total volumes reaching 10.6 billion tonnes. Projections for the medium term also point to continued expansion, with volumes growing at an estimated compound yearly growth rate of 3.2 per cent between 2017 and 2022. UNCTAD noted that against the situation in some regions, the projected demand is expected to surpass planned capacity growth (East Coast of North America, China and Oceania). "Capacity expansion is expected to outweigh demand growth in Northern and Western Africa, Southern Asia and the Gulf Coast of North America, sighting Drewry Maritime statistics. "Assuming all planned projects are implemented, it is likely that capacity growth in Africa and Southern Asia...

The East African Community (EAC) and Central Corridor Transit Transport Facilitation Agency (CCTTFA) in collaboration with the World Bank will meet on 2 and 3 November .The aim will be to look into how the project on Lake Tanganyika Transport Program should be supported. The World Bank has committed approximatively US 500 million to the support of the Lake Tanganyika Transport Program. Liberat Mfumukeko, the EAC Secretary General, says the community is committed to delivering an integrated transport system and the Lake Tanganyika Program in particular. “Successful implementation of the Lake Tanganyika Transport program is expected to result into numerous benefits for the riparian states and the communities around the Lake”, he says. Among the benefits include the enhancement of inland waterway transport and connectivity on Lake Tanganyika; improving the navigational safety on Lake Tanganyika and promotion of security through cross border trade as well as reducing the transport costs for goods and passengers for the Lake Tanganyika Basin countries through improved infrastructure and logistics services. It will also be an opportunity to improve connectivity of the Lake ports and the land-locked countries with the port of Dar es-Salaam through the central corridor allowing people and goods to move more easily and efficiently within the region. Dieudonné Dukundane, Executive Secretary of the Central Corridor Authority, says that if one compares transport fees paid in other countries, Burundi is still paying a high rate estimated at between 30 and 40% of the merchandise values. “This constitutes a big challenge to the...

A majority of East African economies are yet to make significant reforms to create an easier environment to do business, a new World Bank report shows. Only Rwanda and Kenya made notable changes to improve doing business in the region, moving more than ten places up globally, according to the World Bank's Doing Business 2018 report. Rwanda remains the easiest place to conduct business and is ranked 41 from 56 last year. Kenya, East Africa’s largest economy, moved 12 places up to position 80 from 92 last year. The two countries, which rank second and third after Mauritius (25) in sub-Saharan Africa, eased paying and filing taxes by establishing online platforms and dealing with construction permits by eliminating licence fees in the case of Kenya and introducing risk-based inspections in Rwanda. Kigali, the report notes, also improved in corporate governance, online registration of property transfers and allowing public access to judgements on commercial cases. Nairobi’s reforms included merging procedures for business registration, reliable electricity with specialised teams to restore outages, access to credit information and reducing time in cross-border trade by enabling electronic submission of customs entries through the single window system. Laggards Despite impressive economic growth, Ethiopia dropped ranking from 159 last year to 161. The country only reforms included removing the requirement to open a bank account for company registration and eliminating the paid-in minimum capital requirement. It also strengthened its customs authority to better cross-border trade. Tanzania increased land and property registration fees and was ranked 137 dropping five...

The government of Tanzania has announced a completion date for work on the Bagamoyo megaport, one of a number of infrastructure projects that are expected to lay the foundations for the country’s economic development. The fate of the scheme has been in doubt since it was put forward in 2014 as a 20 million teu (twenty-foot equivalent unit) container port, variously priced at between $7bn and $11bn, and due to be completed in 2017. Now Stella Manyanya, the deputy minister for trade, has told the Tanzanian parliament that the first phase of works will be done, and operations will commence, sometime in 2020. The port is being financed by China and Oman’s sovereign wealth fund, the State General Reserve. It is being developed by Hong Kong-based conglomerate Merchants Holdings International. As well as the harbour and 8,000ha port, Bagamoyo will be the site of a 1,700ha special economic zone which, it is hoped, will have a broad range of manufacturing facilities including a manure-processing plant to be paid for by Oman. The plan is that when fully developed in 2025 the port will have taken over from Dar es Salaam as Tanzania’s main connection with the global economy. Dar suffers from congestion and other inefficiencies that the World Bank recently estimated were costing Tanzania $2.4bn a year. Lu Youqing, China’s former ambassador to Tanzania, has been particularly bullish about Bagamoyo’s prospects. In February he claimed the port would turn Bagamoyo into the African equivalent of Shenzhen, the city that was declared a...

EAST African Community (EAC) moves towards surmounting financial control to improve management of donor-funded projects amid shrinking contribution of development partners (DPs). EAC Secretary General Ambassador Liberat Mfumukeko (pictured) told the first EAC Development Partners Consultative Forum here yesterday that the secretariat has already recruited the manager for the Partnership Fund, with the view of enhancing fund management and efficiency. "The Partnership Fund is key in coordination of EAC development partner support. It has continuously played critical role in supporting activities to accelerate EAC agenda since its inception a decade ago," Ambassador Mfumukeko said, hinting that the fund manager has already reported for work. The EAC mission is to widen and deepen economic,political, social and cultural integration to improve the quality of life of all citizens in the region through increased competitiveness, value addition to agricultural produce, trade and investments. The community secretariat is responsible for fund mobilisation from DPs and other sources for project execution. Ambassador Mfumukeko said that the EAC has significantly strengthened its financial systems and procedures. The PF was established in 2006 to coordinate and channel contributions by DPs to projects and programmes towards regional integration and socio-economic development as well as facilitate harmonisation and alignment of their support to the EAC. Head of Corporate Communications and Public Affairs Department at the EAC Secretariat Owora Othieno said the new unit will deal with administration of the fund, communication with fund members, monitoring and evaluation of the achievements, budgeting, financial control, auditing and supervision of work-plan execution....

Logistics costs and operation time in Kenya significantly dropped last year on the back of strong digital processes at key points and improved infrastructure, a new survey shows. According to the 2017 Logistics Performance Survey recently unveiled by the Shippers Council of East Africa, cost and time indicators for road freight, sea, air and rail in Kenya last year dropped compared to 2015. Road freight turnaround time between Mombasa and Nairobi in 2016 was 26.4 hours down from 36.8 hours in 2015, and 10.7 days between Mombasa and Kampala, down from 15 days. Time taken by trucks from Mombasa to Kigali dropped from 17.5 days in 2015 to 12.5 days in 2016. This illustrates a 40 per cent truck turnaround between 2014 and 2016. Truck turnaround for Dar es Saam to key corridor destinations like Kigali, Bujumbura and Kampala remained steady with a marginal decrease of 18 per cent. Port dwell-time, the time it takes a vessel to arrive at the port area to the first berths, improved from 68 hours in January 2015 to about eight hours for the Port of Mombasa. This is attributed to the introduction of fixed berthing by the Kenya Ports Authority and the expansion of the port which increased its capacity. The custom processes at the port also decreased from 55 hours to 43 hours within the year. Nairobi has the shortest airport dwell-time in the region at an average of 28 hours for exports and 33 hours for imports while the airport in...