Rwanda’s push to overcome international bias over the origin of its mineral exports has been hampered by the reluctance of regional countries to implement a regional mineral certification mechanism, experts say. The certification is aimed at curbing the illicit flow of “conflict minerals,” including tin, tantalum and tungsten (the 3Ts), which are Rwanda’s principal mineral exports, and gold. Twelve member states of the International Conference on the Great Lakes Region (ICGLR) agreed to a deadline of December 2015 to put in place requirements for the mechanism. Last week, the ICGLR held a meeting in Kigali where it lobbied member states to hasten implementation of the regional certificate mechanism, in order to boost its value on the international market. “ICGLR has developed a strategy that addresses cross border smuggling and levies uniform mining procedures across the region. All countries should feel the same pressure in implementing this and they should learn from the experiences of those that have done their best to put the mechanism in place,” William Aliga, chairman of the ICGLR Regional Committee on the Regional Initiative on Natural Resources, said. Partnership Africa is working with Kenya, Zambia and Tanzania to bring them on board. “We all know that December 2015 will come and go and the member states will not all have implemented the ICGLR Mineral Certification Mechanism, and then they will have to ask for an extension,” Joanne Lebert, executive director of Partnership Africa Canada said in an interview. “If the regional certification mechanism is fully implemented,...

Multinationals operating in Kenya, Tanzania and Uganda will be among the first in Africa to feel the impact of new measures to be adopted in January to curb tax losses caused by manipulation of contracts between related companies. The three countries together with Nigeria, Ghana, Burkina Faso, Senegal, Botswana and South Africa, formed a technical group that this month led to the adoption of the Base Erosion and Profit Shifting (BEPS) action by the G20, which aims to save developing countries an estimated $150 billion in tax losses, a quarter of them in Africa. “We expect to see definite improvements in revenue collection from the deterrent effect of better legislation, treaties and enhanced guidelines and transparency initiatives we are rolling out effective from 2016,” said Alice Owuor, Kenya Revenue Authority commissioner for domestic taxes. Illicit flows No reliable data exists on the extent of tax avoidance by multinationals in Kenya. However, KRA Commissioner-General John Njiraini reported in September 2013 that an audit of 40 companies mainly in the horticulture sector had reversed losses of $80 million into profits that yielded more than $40 million in tax revenue. Conservative estimates from Global Financial Integrity (GFI), a US illicit flows watchdog, has estimated Kenya’s transfer pricing-related tax losses at $115 million annually. Ms Owuor said KRA has since been conducting audits on transfer pricing and international tax after noticing anomalies in tax records of multinationals. “We have observed a worrying trend in statistics, where corporation taxes from companies doing business in Kenya constitute...

The quest by African countries to get subsidies on agricultural exports by developed countries removed is unlikely to be realised at the World Trade Organisation Ministerial Conference in Nairobi, after an informal session of delegates failed to close ranks on the matter. Export subsidies — including finance (credit, guarantees and insurance), food aid and state trading agencies — were seen as one of the difficult-to-negotiate areas at the December 15-18 meeting and members at the informal session in Geneva last week confirmed the sharp differences. “Three new proposals were submitted. Two were on export competition, pushed by several developed nations, and one on special safeguard measures for poor farmers made by the G-33 group, which includes India. But there was no convergence of views on these new proposals,” a WTO official in Geneva said. The European Union, Brazil and other countries tabled new proposals on export competition that included new flexibilities aimed at appeasing the United States. In the new proposals, the EU is willing to be flexible on issues like export credits and food aid disciplines in order to reach an export competition deal in Nairobi, but for Africa and other developing countries to benefit, the US now needs to make concessions on those issues as well. “Two aspects of the proposal that the US is unwilling to accept are its requirements that the maximum loan repayment for export financing for agricultural products be limited to nine months, and restrictions on the so-called monetisation of food aid,” said the...

KAMPALA, UGANDA - Small and medium Ugandan exporters have been asked to take advantage of new markets in the more integrated East African Community (EAC) writes SHARON KYATUSIIMIRE. “The markets are huge; the EAC market is now bigger with the additional new markets like Goma in Congo which is still open for agricultural products and beauty products. “We have been lucky that the Congolese people appreciate our products. What the traders need to do is improve more on the quality of goods you intend to export and this can only be done by good branding and packaging,” Amelia Kyambadde, the trade minister said last week. She was speaking at the fourth market-linked alumni meeting. Caroline Mulquee, Programme Manager/International Business linkages at Traidlink said: “Efforts by the Uganda Export Promotion Board (UEPB), together with Traidlinks, to build the competitiveness of 400 small and medium enterprises (SMEs) to penetrate the East African market have started to yield results,” she said. Since 2009, through an export development initiative dubbed ‘Market Linked’, the SMEs have been connected to buyers from the different East African Community member states with a mission to have Ugandan products penetrate the regional market. The new manufacturers are beneficiaries of a partnership between Uganda and Ireland under a programme called Traidlinks. MarketLinked is an initiative by Traidlinks to help forge business ties between manufacturing companies and other businesses in the EAC. It capitalizes on the opportunities for intra-regional trade and business arising from the EAC Common Market. MarketLinked primarily is an initiative to...

iShamba, a mobile based platform that enables small holder farmers access real time agricultural and market price information and expert advice via SMS and a call centre, won global recognition in the recently held Mobile Innovation Awards. iShamba is funded by TRAC, the TradeMark Africa’s Challenge Fund and was devised by Mediae Company, Kenya. [caption id="attachment_10865" align="alignleft" width="600"] TMA challenge fund grantee iShamba wins two innovation awards[/caption] On 6th October 2015, the Mediae Company was awarded the winner of the ‘Effective Integration of Mobile in an OmniChannel Strategy’ category to reflect the valuable contribution made by iShamba in delivering agricultural information to farmers via SMS and call centre, alongside Mediae’s existing Shamba Shape-Up program that is offered via radio, print and TV. In addition, the product’s innovation was recognised with the “Regional Award (Africa)”. iShamba is the mobile complement to Shamba Shape-Up, an “edutainment” programme created by The Mediae Company. Aimed at East Africa’s rapidly growing rural audience, the makeover-style TV show aims to give its audience the tools they need to improve their farm’s productivity and profitability. Launched in March 2015, the iShamba project aimed to assist 20,000 smallholder farmers but as of the end of September 2015 this target had been well surpassed. The market price information improves a farmer’s bargaining power by providing timely information on crop prices from 27 markets across Kenya. “If you subscribe you get market prices for a couple of crops in a couple of locations, you get weather information, and we also...

The global chairman of the Pan African Movement and Kenya minister of Justice and Constitutional Affairs, Maj Gen Kahinda Otafiire, said  African governments should eradicate trade barriers if they are to create jobs and boost investment on the continent. Maj Gen Otafiire said this at the launch of a partnership between the Pan African Movement and TAL Group in Mombasa, Kenya. African countries continue to have trade barriers restricting the movement of goods and services despite efforts to unify the continent. In East Africa, for instance, the presence of nontariff barriers has restricted trading, especially where goods have to enter markets such as Kenya and Tanzania from Uganda. “African countries need to tear down artificial borders in order for the continent to get economic freedom. We have had political freedom for a while, but economic freedom remains a dream for most African countries,” Maj Gen Otafiire said. TAL Group runs a nine-acre Makupa Transit Shade at the Port of Mombasa. In June 2015, a coalition of three regional economic communities representing 26 African countries bringing together a population of 600 million people came together to form the Tripartite Free Trade Area, aimed at boosting intra-African trade. The continent, despite being resource rich, is one of the poorest with unemployment being a big problem. Unemployment among the youth in Uganda, for instance, is at about 63 per cent. “It is not until we pull our resources together so we can develop this continent. It hurts to see Africans drowning in the...

The World Trade Organisation’s Goods Council has approved a request from the US for the extension of the waiver of the Africa Growth and Opportunity Act (Agoa). The waiver means that goods from African countries will continue to have free access to the US market and are exempt from the most favoured nation and non-discrimination provisions under the WTO’s General Agreement on Tariffs and Trade. The US enacted legislation in June 2015 extending the Agoa programme for 10 years, or until 30 September 2025.  The waiver will run until the expiry of the programme. It is estimated that with the approval, trade under Agoa in the East African countries will bring in $100 million in new investment to the region, which will create about 10,000 jobs in the period through to 2019. Imports of goods under Agoa provisions totalled $11.8 billion in 2014. Over 91 per cent of US imports from Agoa-eligible countries entered the US duty-free under the Generalised System of Preferences (GSP), or other zero-tariff provisions, it added. According to Nelson Ndirangu, director of economic affairs and international trade at Kenya’s Ministry of Foreign Affairs and International Trade, the waiver had to be approved because it is inconsistent with the most favoured nation obligation. “Programmes such as the GSP, under which developed countries grant preferential tariff rates to developing country products, require a waiver by WTO because they accord some countries more favourable tariff treatment,” said Mr Ndirangu. Agoa enables about 6,500 commodities from sub-Saharan African countries to enter...

East African states have made considerable efforts in recent years to reduce the cost of doing business and boost intra-regional trade. There have been investments in large infrastructure projects, such as the expansion of ports and construction of highways; the introduction of one-stop border posts; and measures to ease the movement of goods and people across borders. But despite these efforts, the cost of doing business across the East African Community (EAC) remains high.

 Nairobi-headquartered TradeMark Africa (TMA) was established in 2010 with US$560m funding from a range of development agencies with the aim of improving trade in the region. TMA works with EAC institutions, national governments, and business and civil society organisations. How we made it in Africa spoke to TMA chief executive Frank Matsaert about the progress made in reducing trade costs, how to stop corruption, and the significance of informal traders. Below are edited excerpts. Businesses often complain about high transport costs in East Africa. Are things getting any better? The transport costs in East Africa are on average still about 60% higher than in the US and Europe. Landlocked countries like Rwanda, Uganda, South Sudan and DRC can’t export much because the costs are just so high. The high trade cost is holding back these economies. We aim to solve these challenges through initiatives that increase physical access to markets, enhance the trade environment, and improve business competitiveness. One of our targets is to increase trade by 10% by the end of next year and we are...

ABIDJAN, Côte d'Ivoire, 19 November 2015 / PRN Africa / — A key activity of the just concluded Programme for Infrastructure Development in Africa (PIDA) Week was a site visit to the Abidjan-Lagos corridor, where participants came face to face with the reality of integrating Africa through infrastructure. The Abidjan –Lagos Corridor is a PIDA flagship project. The 1,028-kilometre road, under construction, connects Abidjan, Accra, Cotonou, Lagos and Lome, considered to be West Africa's largest and most economically dynamic cities, with a combined population of more than 35 million people. The six-lane corridor also links vibrant sea ports, serving all the region's landlocked countries, thus facilitating intra and inter regional trade. “The corridor is one of the most important developments in the region; it accounts for about 75 percent of trade in the ECOWAS region”, said Edy Anthony, a transport expert with Abidjan-Lagos Corridor Organisation (ALCO). “When you connect one country with another; one region with another, you reduce transport and trade barriers, expanding business opportunities between countries. This leads to growth of local economies and the region's at large, Anthony emphasised. The corridor is perceived as an instrument for driving the implementation of ECOWAS's flagship protocol on free movement of people and goods. The presidents of the five countries- Cote d'Ivoire, Ghana, Benin, Nigeria and Togo – approved the facility, which is a pilot project under the PIDA Service Delivery Mechanism. The African Development Bank (AfDB) is considering US$16 million support package to finance preparatory studies for sections of...

Regional free trade agreements promise to unify the continent's fragmented markets, writes Julians Amboko By and large, the world is caught in a phase of global economic transition: the possibility of the US and Europe exiting the zero-interest-rate terrain lurks in the horizon, despite seeming remote in the recent past; in China, the government is attempting to rebalance growth from over-reliance on exports as aggregate growth moderates toward the 6-to-7 percent band in 2015 (data from the statistical agency indicates growth in the second quarter stood at 6.9 percent) and in Japan, Abenomics is still firefighting further economic downturn. In Africa, economies are grappling with spillovers from adverse economic conditions in emerging markets such as China and Brazil, as well as a slump in commodity prices that has left countries exposed to elevated fiscal and foreign exchange pressures. In February, Nigeria, Africa’s largest oil producer, slashed capital expenditure to 8.9 percent of planned expenditure from 23.7 percent in 2014, while the tanking of copper prices has seen the Zambian Kwacha depreciate 96.7 percent year-over-year as of 28 October this year. This explains why African economies are increasingly reaching for more robust regional integration and trade, in a bid to put foam on the runway and cushion themselves from a volatile external environment. As far as regional integration within the East African Community goes, it is not the typical occurrence of rhetoric moving ahead of evidence. For instance, all that is needed in cross-border travel for citizens of Kenya, Uganda and...