The World Bank says 18 sub-Saharan African countries are at "high risk of debt distress" in 2018 compared with just eight five years ago. The World Bank’s Pulse report doesn’t name the 18 but a report in TheEconomist says Kenya is among the 18 countries where government debt is above 50 per cent of GDP. The bank has also expressed concern that tax receipts are not meeting the cost of debt repayments in several countries. It warns that the consequences may be severe if action is not taken to address the issue in the coming years. This is because from 2021 international bonds start maturing and large repayments pose “significant refinancing risks” to the region, the bank says. Public debt rising The World Bank says that public debt relative to GDP is rising throughout most of sub-Saharan Africa, and the composition of debt has changed. More countries have shifted away from traditional concessional sources of financing toward more market-based ones. From 2013, the dynamics and composition of public debt changed significantly. Public debt increased from an average of 37 per cent of gross domestic product (GDP) in 2012 to 56 per cent in 2016, with more than two-thirds of the countries experiencing an increase of more than 20 percentage points. Debt sustainability risks in the region “have increased significantly” over the past few years, the report says. “Higher debt burdens and the increasing exposure to market risks raise concerns about debt sustainability,” the report says. Eighteen countries were classified at...

Dodoma — PRESIDENT John Magufuli yesterday called for unity and cooperation among East African Community (EAC) member states to maintain the region's sustainable development. Dr Magufuli said distrust and trade barriers in the EAC bloc benefit nobody, but were instead victimising the East Africans doing businesses and other socialeconomic related activities. He said massive investment in industrial and infrastructure development is vital for effective utilisation of existing natural resources to benefit the over 170 million people. Addressing the evening session of the East African Legislative Assembly (EALA) here, President Magufuli said Members of Parliament (MPs) were dutybound to improve people integration and adopt suitable laws and policies for the region. "EALA members should ensure that policies and legislations attract and promote investments ... this is your responsibility as parliamentarians to ensure that we all care for others," he said. Explaining on the shortage of industries, President Magufuli who aggressively champions industrial revolution in the country, said EAC member states have not been benefitting from their natural resources due to lack of manufacturing industries. "South Sudan, for instance, has huge quantity of minerals and oil reserves, but few exploiters are condemning the youngest African nation to endless conflicts. "....This is also the case with Tanzania ... we are the second country in Africa with largest number of livestock, yet, most of us here don't put on shoes produced from local industries," he said. He added: "We don't benefit from these raw materials and they do not help our 170 million people,"...

President John Magufuli yesterday outlined at least five issues that East Africa Legislative Assembly (Eala) members need to work on to support the development agenda of the region. The issues, according to him, include intra-regional diplomatic disputes, trade barriers and mistrust among member states. Dr Magufuli also mentioned low industrialisation and poor infrastructure as major hurdles to development in the region. Addressing Eala members who were meeting in Dodoma, President Magufuli said: "There are some disputes, which you are all aware of, that have persisted for a long time. In fact, they are playing a role in delaying the region's development. "But it is also my wish that you, as representatives of East Africans, will be discussing possible solutions to trade barriers and how to spur investment in the region. Also, don't forget also that mutual trust in the region is important in promoting peace and unity." On industries, Dr Magufuli challenged Eala members to help mobilise domestic and foreign investments in manufacturing and processing of natural resources. His emphasis also was on the need to improve electricity production, which was still low compared to demand. "The East Africa Community (EAC) has a total population of about 170 million. This is a huge market, and that is why it is important to focus on industrialisation. We cannot continue to import everything," noted the Head of State. "You have been elected at the right time. Intra-regional trade is picking up. It has now reached $5 billion from $1.8 billion in 2005....

Tanzania and Uganda have decided to introduce a tax of Kenyan confectionary goods, including chocolates, sweets and ice-cream. The countries claim the 25% import duty tax is related to the use of imported industrial sugar. The news follows the rejection of certificates of origin issued by the Kenya Revenue Authority (KRA). If the documents, which certify the origins of the goods and therefor determine the charge of import duties, had been accepted by the two nations, Kenya would have been guaranteed tax-free entry. This follows the rules under the East African Community (EAC) bloc, which allows locally manufactured goods to travel between Burundi, Kenya, Rwanda, Tanzania, Uganda. Kenya has been accused by authorities in Uganda and Tanzania that its manufacturers have been using imported sugar under a 10% duty remission scheme. “This is an EAC-wide remission scheme that is available to all manufacturers in the region,” stated Phyllis Wakiaga, CEO of Kenya Association of Manufacturers (KAM). “We are not supposed to pay duty when we sell in the region because our competitors in the region also rely on industrial sugar imported under the same remission scheme.” Source: Business Chief

East African countries Uganda and Tanzania are being accused of restricting trade in the East African Community (EAC) after the two recently imposed taxes on Kenyan-made confectionery products like biscuits, ice-cream, sweets,  over claims that imported industrial sugar is used to produce those goods. Certificates of origin issued by the Kenya Revenue Authority (KRA) have been rejected by the two states who have now chosen to levy 25 per cent import duty on Kenyan confectioneries, news site Business Daily reports. In the East Africa Community common market made up of Tanzania, Kenya, Uganda, Rwanda and Burundi, free movement of locally manufactured goods within the bloc is allowed. But authorities from Tanzania and Uganda have accused Kenyan manufacturers of trying to win the competition to their side by using industrial sugar imported under a 10 percent duty remission scheme as the region does not produce industrial sugar. But Kenyan manufacturers have argued that Uganda and Tanzania are only using the customs taxes to restrict trade. “This is an EAC-wide remission scheme that is available to all manufacturers in the region. “We are not supposed to pay duty when we sell in the region because our competitors in the region also rely on industrial sugar imported under the same remission scheme,” the Kenya Association of Manufacturers (KAM) chief executive Phyllis Wakiaga was quoted by the Business Daily. The KRA’s officer in charge of exports Julius Kihara also said the manufacturers should be safe from taxes as long as the trade volume falls...

Tanzania’s President Dr John Pombe Magufuli on Tuesday emphasised the need and urgency for the East African Community to work harder, in unity, to fast-track the development of the six-member bloc. Magufuli was addressing a special sitting of the East African Legislative Assembly (EALA) in the Tanzanian capital, Dodoma. Speaking in Kiswahili, he urged the Assembly to strive to remove “as early as possible” barriers to trade, movement of people, and others afflicting the region. He said: “Our sole responsibility is to bring development to the people we lead. It is important we understand that the East African Community is for the citizens and not the leaders”. Industry, transport and energy sectors The Tanzanian President put emphasis on lawmakers attaching importance to the sectors of industry, transport and energy, among others, as key drivers of the bloc’s development. Asking them what would be the use of having abundant resources such as minerals, and others, that do not really benefit EAC citizens, Magufuli told regional lawmakers that the lack of an enhanced industry sector costs the region a lot. By exporting raw materials, he said, the region is only enriching others while it’s poor get poorer, a situation that no rational leader in the region should tolerate and urged EALA members to leave no stone unturned in their quest to protect and advance the region’s industrial sector. “If we don’t protect our own industries we shall just remain escorts. A market of 170 million is a big market. If we have...

Delegates from South Sudan, the latest entrant into the Inter-Governmental Authority on Development (IGAD), jetted into the country ahead of discussions on the ratification of the free movement of people protocol by member states. The Government of South Sudan is pushing for the regularisation of an informal movement of people that is currently taking shape in the region. The four-day IGAD meeting was due to be opened Tuesday at Sheraton Hotel in Kampala by internal affairs minister Gen. Jeje Odongo. The eight-member trade bloc has Uganda, Kenya, Sudan, South Sudan, Djibouti, Ethiopia, Somalia and Eritrea. According to IGAD officials, experts from South Sudan and other member states will discuss the proposed IGAD protocol on free movement of persons. "This high-level experts meeting will bring together high level experts from ministries, authorities, commissions and parliament of the Government of South Sudan. "The aim of this high-level experts meeting is for experts to deliberate on the provisions of the proposed IGAD Protocol on Free Movement of Persons," a statement issued by IGAD over the weekend noted. Foreign ministers from IGAD member states, delegates from the Europe Union, United Nations and key labour movement experts, are also expected to attend the meeting, where a political endorsement for fast-tracking the free movement of people protocol will be discussed. With a never-ending conflict in South Sudan, it is estimated that majority of South Sudanese are living outside their country as refugees. At 1.3 million, Uganda accommodates the largest number of South Sudanese refugees. The right...

News that Tanzania and Uganda are restricting entry of Kenya made ice cream, biscuits and sweets does not augur well for East Africa’s common market. A common market basically allows for free movement of locally manufactured goods, services and people. Kenyan businesses accuse neighbouring States of holding up people and goods, frustrating the goals of the common market that includes Kenya, Uganda, Tanzania, Rwanda, South Sudan and Burundi. The latest spat has seen Tanzania and Uganda accuse Kenyan manufacturers of tilting competition in their favour by using imported raw materials. The trade barriers are unacceptable eight years since the formation of the EAC bloc. Tanzania and Uganda have been quick to impose restrictions on Kenya goods instead of giving negotiations a chance to ease the trade wars. The ambition of the region of more than 150 million people to draw foreign investment and wean EAC countries off external aid should not be allowed to die at the altar of suspicions. It should not be lost that the community collapsed in 1977 amid economic and political disagreements. Because the continent is on course to create a mega trading bloc, EAC member countries should give priority to negotiations over grand-standing for its survival. Source: Business Daily

Earlier this year, Chinese Foreign Minister Wang Yi was in the country and, among other engagements, was to invite Rwanda to take part in the upcoming Forum on China-Africa Cooperation (FOCAC) summit to be held in Beijing this year. Rwanda accepted the invitation to the forum, which is among the largest platforms convening 29 member countries of the South-South cooperation, established in 2000. In an exclusive interview with Business Times, a Chinese official based in Kigali last week said that the preparations for the September summit were at an advanced stage. Hudson Wang Jiaxin, the Counselor at China’s Economic and Commercial Department in Kigali, said that this year’s summit would present a platform to discuss future investments between China and Africa. “FOCAC is a platform for China-Africa cooperation and for reciprocal dialogue with the idea to improve our socio-economic progress. This year’s summit is also the best platform to discuss future investments options and the strategies to achieve them,” he said. The previous summit was held in South Africa during which China made commitments to invest in Africa. At the Johannesburg summit, a commitment of about USD60 billion was made, thrice the USD20 billion commitment made during the 2012 FOCAC Summit. Wang noted that Rwanda has been receiving its share of the investment commitment and implementation over the past two years, most of which China had directed towards advancing the infrastructure sector. “Over the past years, right after the FOCAC summit in Johannesburg, China has been providing large sums of...

The Uganda Railways Corporation (URC) will on April 27 test the rehabilitated Port Bell to Kampala Railway Station line with a cargo train as part of ongoing plans to open new transport corridors. The URC senior marine officer Charles Ruzigye has said that the government has already invested about Shs 1 billion in rehabilitating the line from Port Bell to Kampala that has been inactive since the year 2007. “We have replaced the rails and sleepers and we plan to have a trial run for a cargo train from Port Bell in Luzira to Kampala on April 27th this year,” Ruzigye told journalists this week. The project which is part of the Central Corridor intends to improve movement of cargo to and from the port of Dar es Salaam through Mwanza port in Tanzania. Ruzigye said the trial “is aimed at checking the strength of the line that will connect Port Bell to Mwanza, thus transporting cargo from Kampala to Mwanza and ultimately to the Dar es Salaam port”. He said at a media briefing organised by the Central Corridor Transit Transport Facilitation Agency (CCTFA) media coordination office in Kampala that since 2007, Uganda has had no transport activity on Lake Victoria. Lake transport took a hit after the 2005 accident in which the MV Kabalega sunk. In the early hours of May 8, 2005, two marine vessels, MV Kaawa and MV Kabalega collided on Lake Victoria while transporting goods to and from Tanzania. MV Kabalega capsized two hours after...