Even as recent trade wars in the East African Community have mostly featured Kenya and Uganda over sugar exports, Kampala has for the past two months been locked in a dispute with Tanzania over an 18 per cent value added tax on the latter's rice. The EastAfrican has learnt that tens of thousands of tonnes of rice grown and produced in Tanzania are either lying at Mutukula and Port Bell or in other border towns on the Tanzanian side. Uganda says it is invoking its internal law as opposed to the EAC laws. Article 15 (1) and (2) of the EAC Customs Union Protocol prevents discrimination and imposition of internal tax on products of partner states. The five EAC partner states have not yet harmonised domestic tax laws and as such, Uganda's VAT Act applies in this case, according to Moses Egwapu, a tax policy officer at the Ministry of Finance. "Why should rice from Tanzania not pay VAT? The VAT Act states that rice from outside Uganda attracts VAT... VAT is a domestic tax," Mr Egwapu told The EastAfrican. Mr Egwapu added that the VAT Act applies to all rice imports so as to protect the local industry and give incentive to Ugandan millers to add value to their rice. This, however, plays into the same nationalistic and protectionist motives that Kenya was using to block Ugandan sugar millers from exporting their excess sugar to Kenya to which Kampala responded by blocking beef imports from Kenya, until Presidents Yoweri...

ARUSHA, Tanzania, 31 August 2015 / PRN Africa / — Strong regional economic communities (RECs) are the key to Africa's long term goal of creating a vibrant, united and prosperous continent. South Africa's High Commissioner to Tanzania and the East African Community, His Excellency Thamsanqa D. Mseleku, said his country was committed to the creation of strong and viable RECs across the entire continent, adding that RECs were the surest way to achieve the founding fathers' dream of Pan-Africanism. RECs are the first step to the African Union's ultimate goal of creating an African Economic Community. Amb. Mseleku said South Africa was keen to ensure that African countries build on the gains made in regional integration, democratisation, economic growth, good governance, security and political stability. He noted that while Africa had made significant gains in these areas, there were still major challenges to be surmounted citing the situations in Burundi, South Sudan, the Central African Republic and Somalia. "On the economic front, there are sudden problems emerging in the world which have a negative impact on African economies most of which are mainly resource based," he said. The envoy said his country was open to increased cooperation and partnerships with the EAC, which he described as Africa's fastest growing economic bloc. Amb. Mseleku was speaking when he presented his credentials to the EAC Secretary General, Amb. Dr Richard Sezibera, at the EAC Headquarters in Arusha, Tanzania. The High Commissioner was accompanied by Mr Manqoba Mdluli, the Third Secretary Political Affairs...

Though East Africa’s garment manufacturing potential is hindered by poor infrastructure and cumbersome Customs processes, exports are expected to grow as Kenya, Ethiopia, Tanzania and Uganda attract more investment. According to consulting firm McKinsey, East Africa will remain a niche market for garment makers over the next decade but its success will depend on the existence of free trade agreements with the US and the European Union. With $700 million in annual exports over the next 10 years, East Africa will capture only a small slice of the global sourcing market but the industry’s impact will still be important for the region. Kenya, Ethiopia, Tanzania and Uganda account for 0.07 per cent of global exports, earning $337 million. East Africa may be a new alternative for selected large players in basic categories with investment rising, leading annual exports to grow to $1 billion in five years and $1.7 billion annually in the next decade. “East Africa could move beyond cut, make, and trim (CMT) facilities, but this process could take several years before significant numbers of vertically integrated, domestic players appear in the region,” said Saskia Hedrich, who is based in McKinsey Munich office. She said the industry base in the region will attract funds to upgrade facilities and skilled workers to become a major force in the apparel sector over the next decade. Duty-free access to the United States provided by Africa Growth and Opportunity Act (Agoa) is one of the drivers, but the region’s garment manufacturers are looking...

Rwanda's service sector has pushed the country’s first quarter GDP growth to 7.5 per cent, even as the manufacturing and agriculture sectors in the region, which registered a decline, pulled down the overall growth numbers of the bloc’s economies. The economies had predicted a rise in their growth rates but poor performance by several key sectors is putting this in doubt. Rwanda remains the only regional economy on course, with private sector–led growth being its biggest GDP contributor. Yusuf Murangwa, director-general of Rwanda’s National Institute of Statistics, said that the country’s GDP grew by 7.6 per cent in the first quarter of this year. “We have seen an average growth of 10 per cent in the trade, education, finance, insurance, transport and communications sectors,” said Mr Murangwa. The government has been keen on attracting investment in the tourism, ICT and insurance sectors. By 2014, ICT services exports had hit the $4 million mark and are expected to register $11 million by the end of this year. Rwanda is also investing in RwandAir to boost tourism earnings, its key foreign exchange earner. It aims to expand the sector’s annual turnover from the current $46 million to more than $350 million by 2018. Tanzania saw a negative performance in the agriculture, mining and manufacturing sectors slowing its economy. The economy grow by 6.5 per cent in the first quarter of this year from a high of 8.6 per cent in the first quarter of 2014. According to Tanzania’s National Bureau of Statistics,...

Intra-African trade increased by 50 per cent to $61 billion between 2010 and 2013, according to recent data released by the African Development Bank. The rise is attributed to improved market access and a strong growth in re-exports among African countries. The increase marks a strategic shift in internal trade on the continent, which was previously relatively low compared with trade flows from the European Union and China, observers say. Poor quality roads and highways connecting national borders; non-tariff barriers and insecurity are blamed for the weak growth posted by intra-African trade in the past. Recorded trade flows within the East African Community have grown by an average of less than 15 per cent per annum since 2005 compared with an average growth rate of 20-25 per cent per year in trade activity between the bloc and the Eurozone, research shows. Africa’s trade with Europe grew to $430 billion between 2010 and 2013 while the value of trade flows with China increased to $210 billion during the same period, AfDB data shows. The growth of intra-African trade has the potential to reduce unemployment, household poverty and increase tax revenues. Economists cite increased access to trade routes within economic blocs on the continent for the sharp growth in intra-African trade, with big economies such as Egypt posting bigger export volumes within the Common Market for Eastern and Southern Africa (Comesa) in recent times. Though latest data on the country’s exports was not available by press time, Egypt’s manufacturing sector is currently...

Regional business lobby TradeMark Africa has picked new board of directors and appointed former World Trade Organisation director Pascal Lamy as special advisor. The 11 member board will be chaired by Tanzania’s Ali Mufuruki. Others members are Kenya’s Patricia Ithau, Earl Gast and Matt Reitz of USA, Rwandese Rosette Chantal Rugamba, Jaqueline Lutaya of Uganda, Patrick Obath and Anthony Masozera from Burundi. The team was picked from more than 500 applicants from East Africa. TMA previously operated with a statutory board provided mostly by service organisations. The new team incorporates members from the EAC region and is expected to give unbiased feedback on performance of TMA to management. Source: The Star

That Mombasa is the gateway to East Africa has never been in doubt. It is an often-stated fact that the City of Mombasa is the starting point of transport logistics along the Northern Economic Transport Corridor that leads to the landlocked yet strategic trade partners of Kenya viz Uganda, Rwanda, Burundi and South Sudan. Thus, the coastal city plays a pivotal role in trade partnerships, syndication and development across the East and Central African countries. To achieve this, the government has prioritised development of key infrastructure in a bid to spur regional economic activity. This is because traffic congestion is one of the key non-monetary trade barriers affecting business in the region. The Kenya National Highways Authority is one of the key partners in ensuring successful and lucrative economic integration between Kenya and her neighbouring countries. Towards this end, the authority is in the process of implementing several key projects, both in Mombasa and along the Northern Corridor. Among them is the Port Reitz and Moi International Airport access road, jointly financed by the government and Trademark East Africa. Then there is the dualling of Mombasa-Mariakani highway implemented in two phases. Phase one, from Mombasa to Jomvu, jointly funded by the government and African Development Bank. Kenha has also purposed to erect two new weighbridge stations on each side of the road at Mariakani and dedicated lanes for trucks approaching the weighbridge, thus eliminating the traffic snarl-ups sometimes associated with the weighbridge. The World Bank funds this project. Rehabilitation of...

African countries have been urged to increase trade among themselves in order to ensure the continent grows into a notable economy, Nigerian High Commissioner to Kenya Akin Oyateru has said. The diplomat said there is much potential on the continent and the 10 per cent target that has been achieved so far, can be taken further if various States forge a common trade bond. “For Africa to survive, it needs to have more intra-trade and this should be encouraged between nations as Europe and Asia can comfortably survive through their trade,” he said. Mr Oyateru said Europe is doing 60 per cent while Asia is at 50 per cent of trade with themselves. This, he said, Africa needs to adopt. He said improved intra-trade would enable farmers to get more value for their products once they are exported within the continent. Mr Oyateru spoke during a courtesy call on Bungoma Governor Ken Lusaka last week where he urged presidents to reach for a common business pact. Source: Daily Nation

NAIROBI, Kenya - In November participants from the East African Community (EAC) public and private sector are to meet in Nairobi to brainstorm infrastruture development writes JOSEPH BURITE. The Project East Africa Summit is being hosted by the Kenya Ministry of Transport and Infrastructure. Organisers say several major investment opportunities and infrastructure projects in the East African region will be highlighted at summit. It is being touted as a leading platform for local and international investors to showcase opportunities available in the region and will take place on November 3 and 4, at the InterContinental Hotel, Nairobi. ‘Burundi, Kenya, Rwanda, South Sudan, Tanzania and Uganda have joined forces to present their major projects and promote infrastructural development at the event,’ reads a statement in part. According to the statement, the Summit brings together six major governments from the East Africa region together with all the major private sector industry leaders to provide detailed insight into commercial opportunities available and is the best possible platform to meet potential business partners. The East Africa Chamber of Commerce, Industry and Agriculture (EACCIA) is co-hosting the talks. The event’s task force set up by the Ministry of Transport and Infrastructure will ensure that all the government’s major projects are well-represented with the exact purpose of meeting companies and investors who are interested in all the region has to offer. EACCIA is an organization which was established and owned by the three national chambers, namely, the Kenya National Chamber of Commerce and Industry, the Uganda...

What’s a trillion dollars? It’s a thousand billion and in writing, it is one, followed by 12 zeros; by rough estimates, a trillion dollars can fill five large master bedrooms, stacked in $100 bills of $10,000 bundles; that’s the amount lost annually to fraud and corruption globally. A huge percentage of those trillion dollars are lost in the long and technically jargonized chain of procurement and supply by public and private entities as money exchanges hands between procurement managers and tender applicants in bribes and kickbacks for huge contracts. The trillion dollar anecdote is a favourite of André Coetzee, Managing Director of Chartered Institute for Procurement and Supply (CIPS), Southern Africa region and he used it to start his 46-slide presentation at the recent East African procurement forum. CIPS is the world’s largest procurement and supply institute with a membership of over 65,000 entities that operate in over 150 countries; its courses are also accredited in over 40 universities. Rwanda has about 50 CIPS members; Kenya and Uganda have 2,055 and 1,015 members, respectively while Tanzania has 205 CIPS members and only two for Burundi. On Wednesday in Nairobi, Coetzee used the trillion dollar anecdote again, not in a long PPT presentation but at a brief award ceremony where he crowned Trade Mark East Africa (TMA) with the prestigious CIPS Corporate Certification for excellent procurement standards. The CIPS corporate certification is an internationally acclaimed recognition for organisations that have a proven and excellent procurement system and TMA, which has only...