The East African Community is in the process of signing an economic partnership agreement with the European Union. So far, only Kenya and Rwanda have signed the agreement. Burundi is reluctant to sign the agreement in the wake of economic sanctions imposed on it by the EU. Meanwhile, Tanzania has commissioned a study on the effects of signing the agreement on the region. Uganda has stated that it will sign the agreement only if all the EAC member states reach a consensus, which seems difficult at this stage. However, of interest are the possible effects of such an agreement on the region as highlighted in the study commissioned by Tanzania. The research seems to conclude that it is not advisable for the EAC to sign the agreement due to a number of negative effects including the danger posed to local industries and reduced revenue from tax. The effect of the agreement, according to the study, is that it will open up the market to cheaper imports from the EU therefore posing danger to local industries. Furthermore, due to the reduction of taxes on such imports, revenue will be less. These are some of the reasons highlighted against the agreement. However, Kenya and Rwanda have signed the agreement as it gives them access to more markets. While I have not looked into the economic impact of such agreements, I believe that EAC member states can resort to using domestic laws to protect the local industry from whatever harmful effects that may...

As Kenya's general election beckons the race has effectively narrowed down to two horses. Either, opposition leader Raila Odinga , or incumbent Uhuru Kenyatta will be Kenya's president after August 8. The bid for State House has attracted eight presidential contenders in total. But in recent weeks the focus has shifted to Odinga's National Super Alliance and Kenyatta's Jubilee Party, both of which have recently unveiled their manifestos. While the manifestos look good on paper, depending on one's political leaning, they are unlikely to have a significant impact on how Kenyans will cast their votes. The majority of the electorate have already decided on their preferred candidate. Most will vote on the basis of their tribal affiliations. The latest polling by Infotrak shows that only 8% of Kenyans are undecided on which presidential aspirant to vote for. Despite the fact that party manifestos will not shift voting patterns, they do provide a policy snapshot of what the parties would prioritise were they to form the next government. The fact that neither the Jubilee Party nor the National Super Alliance manifesto takes much account of relations between Kenya and its peers in the East African Community, is noteworthy. And disturbing. A study of the two manifestos shows that neither has a coherent plan for regional integration. This should concern Kenyans, as well as the country's neighbours. Relations between Kenya and its neighbours aren't as they could be. A few months ago cabinet secretary for foreign affairs Amina Mohamed accused Kenya's neighbours of not backing her candidature for the chairmanship of the African Union commission. Uganda openly disputed...

The cost of transporting goods has dropped by over 30% for Uganda destined goods A delegation from Uganda to the World Trade Organisation in partnership with Trade Mark East Africa (TMA) has impressed Swiss investors with how efficient Uganda’s borders during a  a side event on Trade Facilitation on the sidelines of the Sixth Global Review of Aid For Trade in Gevena. The objective of this session was to show the extent to which Uganda with the support of TMA had undertaken deliberate and strategic moves to ease the cost of doing business. Amelia Anne Kyambadde, Minister of Trade, Industry and Cooperatives together with Frank Matsaert, Chief Executive Officer of TMA were on the panel to show case the One Stop Boarder Post (OSBP) in Busia. A live link connection was done to feed directly into the panel discussion to an audience of over 500 trade facilitation enthusiasts. A video highlighting the OSBP processes at Busia was showcased. The three-minute video highlighted: the One Stop Border Post; the Authorised Economic Operator (AEO) Scheme; and the Regional Electronic Cargo Tracking System. During the discussion, the Kyambadde fielded several questions moderated by Matsaert on why the OSBP; the challenges that obtained before; and the benefits of the OSBP in terms of cost reductions with regard to movement of cargo and clearance of goods. Matsaert observed that TMA’s efforts to facilitate trade in East Africa had focused on removing bottlenecks and improving efficiency along the main transport arteries. He noted that, after the...

State minister for Transport Aggrey Bagiire, last week on Thursday asked his Tanzanian counterpart to harmonise the preferential treatment his country offers to transit goods as a way of encouraging the use of the Central Corridor, Uganda’s alternative access to the sea. Mr Bagiire, while signing a Memorandum of Understanding (MoU) on reviving inland transport on Lake Victoria and development of a railway as part of the Central Corridor, to implore Tanzania to reduce the high road user charges. Currently, trucks from Uganda are charged $500 (Shs1.7m) each yet Uganda charges only $40 (Shs140,000) per truck from Tanzania. The exorbitant cargo transit fees, Mr Bagiire said, were discouraging the use of the port of Dar ss Salaam by Ugandan traders since it increases the cost of transportation. According to a statement issued by the Ministry of Foreign Affairs, which coordinated signing of the MoU, Mr Bagiire asked Tanzania to “consider revising the rates downwards” to attract more traders to use the route. Dar es Salaam is Tanzania’s principal port with a rated capacity of 4.1 million down weight tonnage (dwt) dry cargo and six million dwt bulk liquid cargo. Mr Bagiire signed the MoU on behalf of Uganda while Prof Makame Mbarawa, the Transport minister, signed on behalf of Tanzania in Dar-es-Salaam. The signing was witnessed by the Charge D’Affairs at Uganda High Commission in Dar-es-Salaam, Oscar Edule, Uganda Railways Corporation (URC) managing director Charles Kateba, and other officials from the two countries. The MoU also reinforces proposed plans by...

Civil society organizations have backed the East African Community (EAC) heads of states to ban the importation of secondhand clothes in order to build the capacity of cotton and textile industries within the region. “It is important that the decision by the heads of states to phase out secondhand clothes be supported in order to enable the EAC in general and Uganda in particular grow and enhance her local production capacity,” said Faith Lumonya. She is the programme officer of Southern and Eastern Africa Trade Information and Negotiations Institute (SEATINI). With specific reference to Uganda, the group argued that Uganda National Textile policy value chain analysis indicates that with added capacity at spinning, weaving and finishing stages, more revenue can be generated and more jobs could be created internally beyond the 2.5 million across the value chain. “As such, the EAC can implement measures to phase out secondhand clothes so as to boost her domestic industries,” the civil society groups told the media in Kampala. On February 20, 2015, the EAC heads of states directed the council of ministers to study modalities for the promotion of textile and leather industries in the region and stopping the importation of used clothes, shoes and other leather products from outside the region. This decision arose out of the need for the EAC to advance a market-driven integration by boosting manufacturing and industrialization; promoting forward and backward linkages and achieve structural transformation through high value addition and product diversification as stipulated in the EAC...

Travel within Africa is not easy, it is expensive and often frustrating. The regional blocs have been working on travel agreements, particularly air travel to facilitate easy travel, but the high cost of tickets and airport taxes are making travel still expensive and out of reach of many citizens. But the East African Community (EAC) is taking a giant step to make travel within the region cheaper by classifying air travel from one country to the other domestic. A report by the East African says by the end of 2017, flights between countries in the region will be classified as domestic. The benefits will accrue to travellers because, according to the report, it will lower the price of air tickets and increase the number of air passengers. “The change will see the price of air tickets drop by up to 12 per cent across the region, with domestic flyers charged a service fee of $5, compared with the $50 paid by international passengers,” it said. While it is easier and cheaper to travel from Kenya to Rwanda by air, it is practically impossible to travel from Ghana to Benin in West Africa. The EAC region is ahead of all the other blocs in Africa towards achieving integration. A 2016 Africa Regional Integration Index – which measure progress on regional integration, ranked the EAC the number in Africa. On the Index, the EAC came first with a score of 0.540, followed by the Southern African Development Community (SADC) which scored 0.531, and ECOWAS...

The year 2016 had a number of shocking global economic events, notable among which was the British exit from the European Union famously termed as the Brexit. This development came from a shock referendum whose results defied the predictions of many professional pollsters. There are several economic issues that informed the majority decision. To the British, it is those economic issues that seem to have made the EU seem more of a baggage than a benefit to them. Given that the East African Community (EAC), is an economic bloc built along similar tenets like the EU economic bloc, one needs to ponder whether such economic issues exist and could, therefore, potentially affect the EAC. Only taking early lessons and any appropriate corrective measures by the EAC member states would avert a future EU-Brexit situation in another economic bloc such as the EAC. The most visible 'Brexit' impact on the EAC was the fall in the value of the Pound Sterling. The Pound was massively sold off, which resulted in a rough 7 per cent decline relative to the Ugandan Shilling. For example, around June 2016 before the vote, the Pound was selling averagely at Shs4,884 and a week after the referendum, it was selling at an average of Shs4,483. The positive effect of the decline in the value of the Pound was to reduce the cost of studying and travelling to the UK. However, it made imports in Britain from the EAC such as flower cuts, vegetables and coffee less...

Tanzanians lack the right skills to compete in the East African regional integration, a top government official said on Friday.In view of this, higher learning institutions need to come up with right curriculum that will build youths confidence as well as skills to be able to utilize numerous opportunities found in the EA bloc. Minister for Foreign Affairs and International Corporation Augustine Mahiga said this on Friday when launching reports on EAC boundless cross-border opportunities for business and trade. “The government intends to have its people benefit from this opportunities not only through trade but also investment and value addition of its goods,” he said. He said for the youth to be able to identify and grab the EAC common market opportunities, member state countries need to harmonize their university curriculum to have same goal of empowering the youth with the right skills. He noted that currently higher learning institutions were not producing youth with right skills and if the situation is not rectified, the country’s youth will loss the opportunity. He said President John Magufuli has recognized the EAC potential, and that was why he was aiming for an industrialized country to compete with its neighbors Kenya instead of continually depending on agriculture. In view of this he said that Tanzania was working towards eliminating all trade barriers to enable free movement of labor and capital. Before the launch, University of Dar es Salaam lecturer Haji Semboja said there is a mismatch of skills in the region and youths...

There has been a lot going on lately about the business climate in the region and the efforts necessary to locally make it more hospitable. Last week saw ministers from 26 African countries conclude a meeting in Kampala on Tripartite Free Trade Area (TFTA). Preceding this was the East African Manufacturing Business Summit in May in Kigali. The city also played host to the Common Market for Eastern and Southern Africa (COMESA) meeting last week to track implementation of the Airspace Integration Project. In the meantime, with an eye beyond the continent, the EAC Sectoral Council of Ministers of Trade, Industry, Finance and Investment were in Arusha last month where they adopted the terms of reference of a comprehensive cost-benefit analysis of the region’s trade with third parties. The first thing to note is that the TFTA brings together COMESA, EAC, and the Southern Africa Development Community (SADC). The other thing to note is the signing on of South Africa to be part of TFTA, which added the country’s heft to the free trade area’s viability. No matter that only Egypt has ratified it, with a minimum of 14 countries required to ratify the TFTA for it to become operational. The joining of South Africa, with Mauritius and Botswana expected to sign on in short order, means that the long held dream of Africa being able to trade with itself has taken another important step towards a Continental Free Trade Area. However, to this, the recent East African Business Council...

East African states once again missed the middle-income economy status by the end of June milestone, with per capita income of between $3,956 and $12,235. Data released by the World Bank recently shows that Kenya is the only country in the region that got close to becoming an upper middle-income economy. Its economy was rebased two years ago, branding it a lower middle-income country. Tanzania, Somalia, South Sudan, Uganda, Rwanda Burundi and Ethiopia are still classified as low-income, with gross national per capita incomes of below $1,045. Kenya has been ranked as a lower middle income economy with per capital of between $1,006 to $3,955, in the same category with Congo, Nigeria, Sudan and Egypt. Angola is one of eight countries in the world and the only African country that has moved from upper middle-income to a lower-middle income. Angola’s drop is a reflection of the structural economic shocks the country has faced as a result of the decreased oil prices and commodity prices in general. Individual governments in East Africa have been struggling to meet key growth targets under their long-term development blueprints in efforts to achieve middle income economy status. Kenya has Vision 2030, Uganda has formulated Vision 2040, Tanzania Vision 2025, Burundi Vision 2025 and Rwanda has Vision 2020, but there are plans to align all of them to the EAC’s Vision 2050. Though East African governments have laid down elaborate visions for their countries, the pace of execution remains largely unco-ordinated and execution has been relatively...