East Africa’s free common market is not free at all. Seven years after internal custom tariffs were scrapped, a number of protectionist policies continue to pop up as countries try to limit the entry of foreign goods in favour of promoting local ones. This has dampened the spirit of a free regional market and raised questions over whether the East African Community is working. At a one-day private public sector stakeholders dialogue on strategies for enhancing regional compliance for national laws, which was held in Kampala on September 12, entrepreneurs raised concerns on the increasing level of business discrimination within the East African bloc. They argued that whereas Uganda is promoting the Build Uganda Buy Uganda (BUBU) policy, government was not helping local manufacturers penetrate the national and regional markets. While giving a recent incident she encountered at the Rwanda-Uganda border, Prudence Ukkonika, the proprietor and manufacturer of Bella Wines, narrated how her goods were confiscated and held for several days, and how she was forced to pay money far beyond the cost of the goods in order to have them released. “Every meeting I go to, they are encouraging people to export. But it is very different from the situation on the ground. They talk much about this but they don’t act. If other countries don’t want to take our goods, then let them tell us,” Ukkonika said. Ukkonika said Uganda’s BUBU policy has not helped local manufactures attain their dream. “Every time they say BUBU,... BUBU... but BUBU...

A leading Tanzanian cooking gas vendor saw its share market in Kenya shrink by 4.7 percentage points in the second quarter of the year as an import ban from its home country into Kenya took a toll. Latest data from the Petroleum Institute of East Africa (PIEA) shows Lake Gas commanded 17.6 per cent of the Liquified Petroleum Gas (LPG) market in the three months ending June, second to KenolKobil with 18.4 per cent share. In March, it held the largest share at 23.1 per cent, having jumped from 14.1 per cent in December 2016. The firm had not featured on the list of PIEA’s top gas suppliers as recently as September 2016. It is owned by Dar tycoon Ally Etha Awadh who recently acquired Kenya’s Hashi Petroleum retail fuel business, although this did not include Hashi’s gas business. Lake Gas has been selling its branded gas locally, but also supplies independent re-fillers, cutting the retail cost substantially. Kenya banned gas imports through its border with Tanzania in April saying it wanted to eliminate illegal filling plants that are deemed a safety risk. Tanzanian border Before the ban, it was estimated that 2,000 metric tonnes of gas were coming into the country through the Tanzania border per month. KenolKobil’s  rise to the top of the gas market has come after the firm grew its share by 4.4 percentage points in the second quarter, while French oil giant Total slipped one place to third at 14.7 per cent. Vivo gained a percentage...

The cornerstone of U.S. economic relations with sub-Saharan Africa since 2000 has been the African Growth and Opportunity Act, or AGOA. The program offers more than three dozen participants preferential access to U.S. markets by eliminating import tariffs. Policymakers hoped that AGOA, as the primary U.S. trade policy for the region, would foster economic and political development in Africa. However, the outsized role of oil and apparel in African export growth has raised questions about whether AGOA can diversify the region’s economies and increase its competitiveness in global markets. Meanwhile, U.S. trade with AGOA’s participants has dropped since its 2008 peak almost to its pre-AGOA total, while African trade relationships with other countries, particularly China, have expanded. Why was AGOA created? AGOA is a trade preference program established in 2000 as part of broader legislation to strengthen U.S. trade ties with Africa and the Caribbean enacted by President Bill Clinton. The act is unilateral, meaning that it does not require African countries to lower their own barriers to U.S. goods, though it encourages them to do so. President Clinton saw the policy as a way to boost growth and bolster democratic ideals across the continent. He also said that it would strengthen the U.S. economy by opening markets with “hundreds of millions of potential consumers” to American producers. The act is an extension of a U.S. trade preference system introduced in 1974 that allows more than one hundred countries, mostly in the developing world, to export many of their goods to the...

Member states of the Common Market for Eastern and Southern Africa (COMESA) have been urged to expedite the completion of the current infrastructure projects to boost regional trade. The call was made during the 10th Joint Meeting of the Committees on Transport and Communications, Information Technology and Energy held in Lusaka Zambia last week. According to the COMESA secretariat officials, member states need to take decisions that will help accelerate the implementation of the bloc’s infrastructure projects. Rwanda High Commissioner to Zambia and permanent representative to COMESA, Monique Mukaruliza, said the idea is to support the completion of most pending infrastructure projects to spur the region’s development. Mathew Nkuwa, the Zambian Minister for Works, Transport and Supply, said there is need for policies, systems, institutions and resources to support infrastructure development and maintenance, adding that this move would reduce the infrastructure gap, support poverty reduction efforts, as well as “create wealth and enhance economic development in the COMESA region”. Nkuwa highlighted lack of financial and technical resources to the support infrastructure projects as one of the main causes of delays in the implementation process. “There is need to develop modern infrastructure that will make it easy for member states to trade amongst themselves,” he added. Fast tracking airspace liberalisation Meanwhile, the COMESA infrastructure ministers agreed on the need to fast-track the liberalisation of air space in the region to increase connectivity and boost trade. They say, air transport liberalisation will lead to increased air service levels and lower fares and,...

The trade row between Kenya and Tanzania cost the former Sh2.6 billion in the first seven months of this year, data shows. The latest figures from the Kenya National Bureau of Statistics show that Kenya’s exports to Tanzania dropped by 17.8 per cent between January and July to Sh11.9 billion, from Sh14.5 billion in the same period last year. And with the value of exports to Dar es Salaam averaging Sh1.7 billion a month, total exports at the end of the year are likely to hover around Sh20.4 billion, a far cry from the Sh34 billion that Kenya raked in from its exports to the neighbouring country. Besides the trade row, which saw relations between the two countries hit rock bottom when Nairobi banned the importation of LPG and wheat from Tanzania a few months ago, the heightened political activity in Kenya for the better part of the year has also contributed to the plunge in exports. Experts believe that things can only get worse, aggravated by the toxic political climate following the annulment of the August 8 presidential results by the Supreme Court. A number of traders from Uganda, Rwanda, and Burundi have given Kenya a wide berth in transporting their goods, fearing the possibility of ethnic skirmishes similar to the ones that erupted after the disputed presidential election in 2007. The Petroleum Institute of East Africa (PIEA) recently released a report showing that diesel consumption has gone down due to, among other factors, traders from the neighbouring landlocked...

harmonisation of the microfinance sector policies in East African Community (EAC) will improve financial inclusion, ensure efficiency and support poverty eradication efforts across the bloc, according to the Association of Microfinance Institutions in Rwanda (AMIR). Jean Pierre Uwizeye, the senior programmes manager at AMIR, said the law will also ease market entry for MFIs across the region, noting that it calls for mutual recognition by EAC sector regulators to enable MFIs to operate freely across the bloc without any restrictions. “For instance, if a Ugandan-registered MFI wants to operate in Rwanda, the National Bank of Rwanda, as regulator, will facilitate its entry because the draft policy provides for recognition of certificates and licences from member states,” he added. Uwizeye was speaking to The New Times on the sidelines of a consultative workshop on the EA microfinance draft policy last week in Kigali to get the views of local stakeholders to enrich the final draft of policy before it is presented before the regional assembly, EALA. The regional consultation exercise covered Kenya, Tanzania, Rwanda, Burundi and Uganda. The draft policy recommends interventions like liquidity gaps in the sector and policy actions whereby regional governments and the EAC secretariat will seek to institute funding mechanisms to support groups like the youth and women. “Generally, the draft law reinforces the current thinking in Rwanda and among the local microfinance stakeholders represented by AMIR. Otherwise, we are happy for the opportunity to contribute to EAC microfinance policy framework formulation and efforts that aim at...

The only flag still missing from the railway master plan of the East African region ratified in 2008 is that of Tanzania. It is not missing by mistake. Tanzania, which is East Africa’s most populous country, was not on the table when the presidents of Kenya, Uganda, Rwanda and Southern Sudan sat to ratify the protocol for the development of a Standard Gauge Railway (SGR) connecting the port of Mombasa to Kampala, Kigali and Juba. Instead, Tanzania opted to walk alone and only bring on board any of its neighbours that would buy into its vision. As Kenya rushed to build the first phase of its modern rail in record speed to the envy of its neighbours, Tanzania took a back seat, the way a second born child would do, lurking in the shadows and learning from the mistakes of his elder brother, then retreated to plot how to do a better job when his turn came. And before Kenya could finish bragging about its fete in building the best railway in the region since the last century, Tanzania signed a second contract that will see it build an electric railway line that will move nearly twice as fast as the Kenyan line but at a fraction of the cost. Last week, Dar, which has upped its silent rivalry with Kenya as it races to compete for the top spot as the economic power house in East Africa, awarded a $1.92 billion contract to a Turkish firm to build 422 kilometres...

Data from SWIFT shows that FIN traffic growth in East Africa has outperformed the total growth of SWIFT globally. In the year to date, total message traffic volumes grew by 20.1% versus 8.2% growth for SWIFT worldwide. This clearly illustrates the increasingly important role that East Africa plays in SWIFT’s global business. Figures released at SWIFT’s Business Forum East Africa also show intra-regional traffic has increased 19.8%. Data also shows that intra-regional FIN payments traffic is up 19.8% from 2015, and now accounts for 69% of FIN payments traffic in the region. The average daily number of messages has almost double since 2013, from 15,234 to 27,907 in 2016. This growth in intra-regional FIN payments could be a reflection of the success of the East African Payment System, which was established by the East African Community in 2013. The multi-currency system, operating on SWIFT, links the domestic payments systems in Kenya, Tanzania, Uganda and Rwanda. It makes cross-border fund transfers much easier within the Community, supporting the free movement of goods, labour and services. The system aims to reduce transaction time and lower the cost of doing business in the region. SWIFT traffic growth in the East African Community is significantly higher than the rest of the continent, which also saw major growth. Total message traffic volumes in Africa have increased by 15.4% this year. This is still greater than in EMEA overall at 9.4%, the Americas at 7.8% and Asia Pacific at 5.4%. The growth in East Africa is...

Ministers from Eastern and Central African blocs meet today in Republic of Congo capital Brazzaville to chart a common position on the COP 23 in November in Bonn, Germany. COP 23 is the latest of the series of meetings of Conference of Parties that are signatory to the Kyoto Protocol, an international treaty through which that member states commit to reduce greenhouse gas emission. The ministers expected to meet today in the Republic of Congo capital of Brazzaville are from the East African Community (EAC) and the Economic Community for Central African States (ECCAS). Rwanda subscribes to both blocs. The central focus of the meet is the acceleration of the operationalisation of the climate commission for the Congo Basin. Also on agenda is developing a strategy on how to speed up the operationalisation of the Congo Basin Commission of which the Blue Fund of the Congo Basin, the Green Business Fund and other initiatives created to ensure economic development within the region do not compromise environment conservation. The Blue Fund for the Congo Basin was ratified by 12 countries, including Rwanda, that heads the Commission of Central African Forests. Finding common ground The ministerial meeting was preceded yesterday by one for experts from the two blocs. Rwanda is represented by Dr Jean Baptiste Habyalimana, the ambassador to the Republic of Congo. The EAC Principal Environment and Natural Resource Officer, Eng. Ladislaus K. Leonidas, said that the conference is an opportunity for the two blocs to share experience. "ECCAS and EAC...

The African Development Bank (AfDB) is currently looking for a co-financing partner to fund the 445 km Kenya-Tanzania highway, officials said. AfDB Chief Regional Program Officer Lawson Zankli told Xinhua in Nairobi in a recent interview that his bank has tentatively set aside 300 million U.S. dollars towards the road project that runs along the East African Coastline from Malindi in Kenya to Bagamoyo in Tanzania. "We are looking for partners to bridge the remaining 485 million dollars required to complete the transnational highway," Zankli said. The project will consist of rehabilitation of 215 km of bitumen road on the Kenyan side and upgrading from gravel to bitumen standards of 230 km on the Tanzanian side. Zankli said that AfDB is to play a catalytic role in attracting funding from other partners. AfDB's board is expected to approve funding in mid 2018 to pave way for actual construction by the end of next year. Zankli said that environmental and social impact studies for the road project are currently ongoing. He noted that the road is expected to boost the key economic activities along the Indian Ocean coast such as tourism. "The improved infrastructure will help in easing movement of tourists along the Kenya-Tanzania coastline," he said. AfDB's current portfolio of projects in the Eastern Africa region is about 9 billion dollars, out of which about 70 percent is committed on transport, energy and water infrastructure projects. The Eastern Africa region includes Burundi, Comoros, Eritrea, Ethiopia, Djibouti, Kenya, Rwanda, Tanzania, Somalia,...