EXPORTS from East African Community bloc to the United States, under the African Growth and Opportunity Act, will be increased by 50 per cent in five years, an official of the East Africa Trade and Investment Hub said yesterday. The director for trade promotion and AGOA Finn Holm-Olsen said they will also bring in $100 million (Sh12.02 billion) in new investment to the region, which will create about 10,000 jobs in the period through to 2019. He said the programme sponsored by the USAid will enable the business community in Kenya and the region to fully utilise AGOA. “We are looking to increase exports from the region to the US by 50 per cent. The $100 million comprises of new investments coming in and expansion of current businesses,” he said in an interview during a national capacity building forum to educate micro, small and medium-sized enterprises on the benefits of AGOA, in Nairobi. “In one year alone, the project has supported $81 million (Sh8.28 billion) in exports to the US under the AGOA,” he said. The AGOA Act provides African countries with free access to the US market. Kenya has mainly been exporting textiles and apparels, leather and fisheries, and processed agricultural products. Micro and Small Enterprises Authority chief executive Patrick Mwangi said many MSMEs have not benefited in the AGOA framework due to lack of information. He said most of the products that are being exported to the US under the AGOA are from the various export processing zones...

Kampala. The European Union has signed €85m (Shs348b) in grants to facilitate regional integration through removal of internal trade barriers.
The money is expected to help three main economic blocs; the Common Market for Eastern and Southern Africa (Comesa), East African Community (EAC) and the Southern African Development Corporation (SADC) reduce costs incurred in cross-border trade. 
The funding provided under the 11th European Development Fund (EDF), was signed early last week in Lusaka, Zambia and will go on up to 2020. The new European Union head of delegation and special representative to Comesa, Ambassador Alessandra Mariani during the signing, said: “The EU funds will increase private sector participation in regional and global value chains through improved investment/business climate and enhance competitiveness and productive capacity”. 
He added: “The funds will increase private sector participation in regional and global value chains through improved investment/business climate and enhance competitiveness and productive capacity.” The beneficiaries are the Comesa secretariat and the member states including the private sector which will also be helped to enhance their capacity to deepen regional integration.
 Talking about the advantages derived from a solid regional integration as well as the obstacles and difficulties that may be encountered in the process, Mr Mariani said: “We are more than happy to share with you what has worked and why it has worked in our own analysis from the political and economic point of view as well as from the point of view of citizens to whom the regional integration process has always to...

Strong growth in borrowers’ files captured by the credit reference bureau propelled Uganda’s ratings on access to credit, according to the latest World Bank Doing Business indicators, but lack of integrated land administration reforms has constrained progress on registering property and made it harder for real estate players. The World Bank’s Doing Business scorecard shows that access to credit improved significantly this year, registering 42 points compared with 128 points recorded in 2014. Although the credit reference bureau system initially covered borrowers from commercial banks, it has since widened its scope to include borrowers from microfinance and licensed credit institutions that are regulated by the Bank of Uganda. The number of borrowers registered on the country’s single credit reference bureau platform has grown to more than 500,000 people since 2009, which is an indicator of increased documentation of borrowers. “It has become difficult for a weak borrower to access credit from more than one bank because of tight credit assessment tools and vital financial information shared by banks in relation to a single client,” said Charles Abuka, head of BoU’s financial stability department. Lending rates still high Consequently, improved documentation of borrowers has not translated into cheaper lending rates. Prime lending rates charged by Ugandan banks averaged 24 per cent in September while the central bank raised its rate from 13 per cent recorded in June to 17 per cent last month, financial market reports show. Nevertheless, notable gains posted in this area partly boosted the country’s overall ratings compared...

South Sudan will push for admission into the East African Community at the Heads of State Summit in two weeks time, despite having not met all the eligibility criteria. Government officials argue that Juba has already opened its economy to EAC members though questions on governance, democracy, human rights and security linger. Foreign Minister Barnaba Marial Benjamin, who led a high level ministerial committee to the latest EAC session on South Sudan accession in mid-October, said that a technical committee had recommended that Juba “is now qualified” to join the bloc. The EastAfrican was unable to independently verify this because the committee’s report is being kept under wraps until it is presented to the EAC Council of Ministers meeting in November 15. “It is just like when Burundi and Rwanda were admitted in June 2007 while they had similar challenges, and managed to solve them from within,” said Dr Benjamin. “We believe that South Sudan has a better chance of resolving its challenges faster and more effectively as a member of the EAC.” In a briefing to parliament on October 26, the presidential advisor for economic affairs and co-chair of the High Level Committee on South Sudan Accession to the EAC, Aggrey Tisa Sabuni, said that the recommendations clearly state that there is a strong push by the ministers of EAC affairs for South Sudan to be admitted into the regional bloc within the shortest time possible. “While the ultimate decision lies with the heads of state, they will almost...

The Common Market for Eastern and Southern Africa (COMESA) officials have lauded Rwandan cross-border transporters for embracing the yellow card scheme, noting that it has helped local logistics firms to reduce costs, and ease movement of goods and persons within the region. Sindiso Ngwenya, the COMESA secretary general, said the number of subscribers under the scheme is growing annually, adding that the amount of claim compensations paid to road accident victims has also gone up. "Through the yellow card scheme, COMESA has contributed to region's competitiveness by reducing cross-border transport and transaction costs... It saves transporters and business community time and money," he added. This was in a speech read for him by COMESA's Berhane Gidy during the group's meeting on regional third party motor vehicle insurance in Kigali last week. The meeting attracted participants from all the 19 COMESA countries. The yellow card scheme is a regional third party motor vehicle insurance scheme for medical expenses resulting from road traffic accidents caused by visiting motorists. It also offers emergency medical cover for the driver and passengers of foreign trucks involved in traffic accidents. Speaking at the conference, Emmanuel Hategeka, the trade and industry ministry permanent secretary, said economic integration is essential to support the private sector, improve operations and ease cost of doing business. He added that COMESA has created a favourable legal, economic, political and social environment, "which opens up tremendous opportunities for business". Hategeka said major economic reforms have been implemented with the trade bloc, but called...

NAIROBI: Kenya's economy is not all doom and gloom, after all. According to the International Monetary Fund (IMF), the country's growth prospects and debt/gross domestic product (GDP) ratio are within acceptable levels. IMF further asserts that Kenya's current and projected growth prospects are better than those of her peers in the sub-Saharan African region. The Bretton Woods institution has tipped sub-Saharan Africa's economy to expand at 4.5 per cent in 2015. The institution has since downgraded Kenya's GDP growth for 2015 from 6.9 per cent to 6.5 per cent. Speaking during the launch of the Regional Economic Outlook for sub-Saharan Africa, Kenya's IMF Resident Representative Armando Morales, downplayed fears that the country's debt-to-GDP ratio was spiraling out of control. "Debt in Kenya is classified by the IMF as low-distress risk. And to move to distress, you have to move through two other categories - moderate risk and high risk, and Kenya is below that. So it is very unlikely that the country will face a situation of distress in the coming years," said Mr Morales. no alarming bells He added the country's deficit is not alarming. He said:  "As long as the deficits for this year and the coming fiscal years remain projected at the same levels, then it is sustainable." He revealed that IMF has a programme in place to review the country's progress on maintenance of deficit.Morales' position was supported by Chris Kiptoo of Trademark East Africa who asked the Government to find a way to counter the...

Regional revenue bodies have been urged to embrace technology to solve some of the challenges facing the implementation of the single customs territory initiatives. Raphael Tugirumuremyi, the commissioner of customs at Rwanda Revenue Authority (RRA), said technology is essential in solving problems in revenue collection on the continent and facilitating trade. Tugirumuremyi was speaking at the Eastern Africa Regional Technical Assistance  (Afritac East) regional workshop on the implementation of single customs initiative in Kigali last week. The workshop brought together different revenue authority officers from eight countries - Uganda, Tanzania, Kenya, Zambia, Ethiopia, Malawi, Burundi, and hosts Rwanda. Tugirumuremyi was hopeful that the training would enable regional customs officers to use the knowledge acquired to adopt ICTs in their operations, saying these are important to improve customs operations and help drive regional development agenda. Patrick Chisasa from the Malawi Revenue Authority said the knowledge acquired would help them devise mechanisms to reduce the previous multiple transactions by businesses in customs clearance. “Different customs procedures are being implemented under multiple transactions which is costly, but we expect that costs will be reduced as long as we are looking forward to join the regional single customs,” Chisasa said during the workshop. The International Monetary Fund’s (IMF) AFRITAC East Centre sponsored the workshop. The single customs territory initiative was launched by East African Community countries in September 2013. The bloc’s neighbours, including Zambia, Ethiopia and Malawi, are looking to learn its operation as they seek to join the initiative. Source:  New Times

Kampala. Manufacturers want government to do something about the cost of power because it accounts for the highest cost of production.
According to Uganda Manufacturers Association (UMA) chairman Amos Nzeyi, government should consider subsidising the cost of electricity as it is the case in several countries, including India whose products are flooding the Ugandan market.
 Speaking at the just concluded International Trade Fair in Kampala last week, Mr Nzeyi said: “High cost of power tariff is a challenge. We want it subsidised because it is now impacting on our competitiveness.” He continued: “This is something that has been discussed at the highest level of government. As we wait for the grand power schemes to be commissioned, we would want to see the cost of power go down so that we are able to be competitive.”
 In a separate interview, UMA executive director Kigozi Sebaggala said manufacturers are currently paying between 11 and 15 US cents per kilowatts-hour of power instead of a standard 3 to 5 US cents per kilowatts-hour.
He said for the beginning, as grand plans to increase power supply by governments take root, manufacturers will be willing to work with 9 US cents per kilowatts-hour, then 7 US cents before settling for the industry price of 3 to 5 US cents per kilowatts-hour. If this is done, Mr Sebaggala said there will be a tremendous reduction in cost of doing business which will translate into higher productivity and affordable products.
In response, Trade minister Amelia Kyambadde said moves are underway...

Enligt FN:s världshandelsorganisation WTO finns det en stark koppling mellan ökad internationell handel, fler kvinnor i exportverksamheter och högre löner. Analyser av länderna i Östafrika pekar på att varje lands ekonomiska utveckling är direkt kopplat till kvinnornas företagande och till ökad handel med omvärlden.   Med stöd av den holländska regeringen och Kenyas utrikesminister Amina Mohammed, lanserade organisationen TMA nyligen "Women and Trade Programme" på 4,5 miljoner dollar fram till december 2016. Organisationen TMA eller Trade Mark East Africa arbetar för ett ökat välstånd i Östafrika genom ökad handel. Programmet riktar sig inledningsvis till 25 000 kvinnor och målet är att öka inkomsterna och förbättra försörjningen för kvinnor verksamma i handel samt i kvinnoägda företag. Arbetet fokuseras på att undanröja alla de formella och praktiska hinder som finns i samband med företagande och exportverksamhet vilket i sin tur kommer att ge Östafrikas kvinnor en tyngd och en mycket starkare röst i samhället.  I många afrikanska länder är kvinnor ofta småbönder som producerar till exempel majs, kassava, bomull och ris. Dessa kvinnor har en enorm potential för att bidra till ökad handel mellan de afrikanska länderna och med den globala marknaden. Under 2010 utgjorde kvinnor i utvecklingsländer 43 procent av arbetskraften inom jordbruket. Undersökningar visar att informell gränsöverskridande handel, som till stor del utförs av kvinnor, utgör en betydande del av den regionala gränsöverskridande handeln söder om Sahara. I Uganda står den informella exporten till de fem grannländerna för 231 700 000 dollar under 2006, vilket motsvarar 86 procent av Ugandas...

Recently, you reported that the latest World Bank Africa Pulse report placed Rwanda and Tanzania as rapidly growing economies at above 7%. This maybe source, but it still cannot explain why jobs are so hard to find, even for graduates. If growth is measured on jobs created then probably we may not be doing so well and something is wrong. Source: East African Business Week