The East African Community will roll out improved Customs Union Rules of Origin in the next fiscal year, promising a better future for cross-border trade. The EAC Customs Union Protocol, which came into force in 2005, provides for the rules of origin, but since its inception, the business community has been complaining about its applicability. “It is our expectation that the new rules of origin will spur intra-EAC trade as they are more flexible for the private sector to comply with compared with the former ones,” said Adrian Njau, a trade economist at the East African Business Council. Currently, some partner states do not recognise some goods, forcing the business community to pay all taxes including those eligible for zero import duty, just to save time. Uganda and Tanzania, for example, have not been recognising the EAC rules of origin granted to several Kenyan tobacco products. Kampala and Dar demanded that tobacco products from Kenya comprise 70 per cent and 75 per cent of local content respectively, for them to enjoy the free import duty. But British American Tobacco says the 75 per cent local content required by Tanzania Revenue Authority (TRA) does not recognise the EAC RoOs as stipulated in the protocol. Under the current RoOs, only goods wholly produced using local inputs or those made using imported raw materials but have 35 per cent of the ex-factory value added within the region, can cross national borders without being taxed. This, among other setbacks, has been blamed for the...

Top officials from the World Bank and the East African Community have been exploring ways to improve transport links to landlocked countries. At a meeting at the Unesco headquarters in Paris on June 9, representatives of the two organisations as well as other development partners proposed ways to improve infrastructure and transport challenges along key trading corridors. The meeting, dubbed the Integrated Corridor Development Convention, was organised to assess the challenges and opportunities to facilitate better regional integration in East Africa. “In East Africa, high transport costs, poor infrastructure and underdeveloped logistics services limit the competitiveness and inhibit the integration of both the landlocked and transit countries into the regional and global market,” said Pierre Guislain, senior director for the World Bank’s Transport and ICT Global Practice. “Increasing the integration between the different modes of transport by developing the corridors can significantly improve connectivity and contribute to higher growth in the region.” The convention’s goal was to discuss solutions to facilitate the funding of trading corridor development in countries such as Burundi, Rwanda and Uganda. The meeting was a follow-up to the third EAC Heads of State retreat on infrastructure development and financing held in Kenya in November last year where EAC leaders endorsed a strategy and action plan to improve the quality of service, and reduce the costs of transport, by improving links between the different modes of transport along the key trading corridors in the region. Freight transport The strategy, which the EAC Secretariat was tasked to implement,...

Good news came in over the weekend that Uganda has finally signed on to the lifting of work permit requirements for citizens of Rwanda and Kenya, which had between them already gone ahead in 2013 to abolish these requirements and implement the East African Community’s protocol on the freedom of movement of labor. The deal was signed on occasion of the recent summit held in Kampala of the three countries now best described as the "Coalition of the Willing" among the East African Community’s five member states. Increasingly over the past years have qualified staff from East Africa been recruited into managerial positions and a number of professionals like accountants, lawyers and doctors too have benefited from the mutual recognition of qualifications, allowing them to practice their vocation in any of the three states, subject to registration with the respective professional bodies. The move is expected to help the three countries in recruiting competent skilled labour, which in the past was often sourced from international markets, but the cost advantage in Uganda will be a major one for employers who have to pay up to 2.500 US Dollars in annual work permit fees for citizens from third countries. In particular in the hotel industry have many Kenyans found job opportunities in Rwanda and Uganda, largely as a result of better training opportunities in Kenya, where such institutions like the Kenya Utalii College have produced management graduates since the mid 1970’s. This is yet another tangible benefit for citizens of the...

East Africa’s producers of sugar, maize, cement and other goods categorised as “sensitive” will be protected from intense competition from Egypt and other countries as the Tripartite Free Trade Area (TFTA) comes into force next month. Restrictions on the entry of the sensitive goods will remain in force until 2017, allowing the industries to adjust to the cut-throat competition expected from cheaper products. The list of sensitive goods also has wheat, rice, textiles, milk and cream, meslin grain and flour, cane and beet sugar, khangas, kikois, kitenges, second hand clothes, beverages, spirits, plastics, electronic equipment and paper materials. All these will be subject to duty and quota restrictions. TFTA was launched by the Heads of State in Egypt on Wednesday last week. It will pool the trade interests of the East African Community (EAC), Southern African Development Community (Sadc) and the Common Market for Eastern and Southern Africa (Comesa) and other African countries that have a combined GDP of more than $1 trillion, and a population of 625 million people. The countries that signed the deal were Kenya, Uganda, Tanzania, Rwanda and Burundi, Zimbabwe, Egypt, Sudan, Ethiopia, Malawi, Namibia, Comoros, Seychelles, Mozambique. Others were Angola, Botswana, Democratic Republic of Congo, Djibouti, Lesotho, Eritrea, Madagascar, Mauritius, South Africa, Swaziland, Zambia. The launch of the TFTA effectively opens the door for EAC goods that could not easily access bigger markets such as South Africa, Egypt, Ethiopia and Eritrea. “The two-year period will allow for gradual tariff alignments and adjustments by the TFTA...

Despite his long standing support for a private sector-led economy, Uganda’s President Yoweri Museveni has opposed using private capital in the construction of infrastructure projects, contrary to what Kenya’s Uhuru Kenyatta had suggested. At a dinner sponsored by the business community in Kampala on June 3, Museveni said he was unwilling to borrow money from financial institutions in East Africa for infrastructure projects currently being undertaken by the Northern Corridor member states because of high interest rates and “because these form the backbone of our economies,” Museveni said. Uganda borrowed money from the world financial markets for the construction of the Bujagali hydropower project, and Museveni says this is the reason electricity from the 250MW dam costs $0.11 per kilowatt hour — an amount that is too high to support industrialisation. On his part, President Kenyatta termed a statement that there was enough money in the region’s financial sector to fund the ongoing projects “the most exciting contribution.” Kenyatta said that the region needs to help create an enabling environment for the private sector to finance these projects, instead of using limited public resources. “We are not short of capital; yet every day, as governments, we struggle to raise capital, with the belief that the government must do every project,” he said. Kenyatta pledged to use capital from the region’s pension funds and schemes. Technocrats in Uganda appear to support President Kenyatta’s position. Deputy Secretary to the Treasury Patrick Ocailap told The EastAfrican that financial institutions in the region can...

Uganda has finally joined Kenya and Rwanda in abolishing work permits for professionals following the signing of an agreement. In a 2010 arrangement, Rwanda and Kenya agreed to waive work permit fees for either county’s citizens, although the work permits themselves were still a requirement before one could secure employment in either country. In October 2013, Uganda promised to follow suit but it was not until last week that Foreign Affairs Minister Henry Okello Oryem and his Kenyan and Rwandan counterparts Amina Mohammed and Louise Mushikiwabo respectively, signed the agreement to liberalise the movement of labour. The three countries can thus partially meet the deadline set in the East African Community Common Market Protocol to liberalise the movement of labour before the end of 2015. Tanzania and Burundi still require work permits for which all non-nationals have to pay fees. Martin Wandera, a labour markets consultant, said that the three countries could fully liberalise the movement of people because employment is a hot political issue that can cause unrest if citizens of one country flood another, looking for jobs. Rwanda, Uganda and Kenya will also meet the EAC Common Market schedule for liberalisation of services — another agreement that was signed at the Kampala meeting by the foreign affairs ministers. Research, law, architectural and real estate firms domiciled in one of the countries can now provide cross-border services in all three. Hotels, restaurants and travel agencies can also offer cross-border services in the three EAC countries. The signing of the...

The East Africa Community governments are using technology to promote e-commerce and take services closer to citizens. Kenya has allocated Ksh2.5 billion ($25.7 million) towards increasing the one-stop shop Huduma Centres and Ksh1.9 billion ($19.5 million) for the continued rollout of Integrated Financial Management Information Systems. Rwanda and Kenya will promote e-learning through providing ICT learning devices to schools. Rwanda will continue with its One-Laptop-a-Child project while Kenya will be making a second attempt to provide laptops to primary school children. The government has allocated Ksh17.58 billion ($181 million) towards this initiative covering ICT learning devices, digital content, building capacity for teachers and the building of computer labs. Tanzania is also planning to have more learning equipment in place with the aim of promoting technology. The country is planning to take more e-services available to its citizens through Internet and mobile penetration. “Key challenges that the government needs to overcome for successful implementation are access to electricity and Internet connectivity in remote areas and safety of the devices,” says a report by PwC on budget analysis. Over 400,000 Kenyans have registered on the e-Citizen Payment platform with over 8,000 transactions and with revenue collection averaging about Ksh10 million ($103,000) daily, the government further aims to digitise at least 100 inbound payment service transactions by end of 2015. In Uganda, the National Information Technology Authority is currently consolidating the hardware and software licences to accelerate delivery of government services. It is also connecting public universities to the national backbone infrastructure to...

It has been observed that the East African Community has demonstrated the most feasible progress on integration and is said to be the most ambitious of all the regional economic communities in Africa. The East African Community member states have made a number of significant strides towards the realization of full economic integration of the region’s economies. The recently concluded 10th Northern Corridor Integration Projects Summit is one of the things that remind us of this progress. The Northern Corridor Integration Projects initiative was designed to generate sustainable political will necessary to fast track the implementation of the projects identified. The first Summit was held in June 2013 and the three Heads of State of Uganda, Rwanda and Kenya agreed to meet every two months to review progress. The meetings are hosted by Partner States on rotational basis and the decision is supported by articles 1 and 7 of the EAC Treaty which allows progression in cooperation among groups within the Community for wider integration. Member States of the Northern Corridor have made noteworthy advancement in mobilising resources for the rehabilitation of the trunk road networks. The 10th Northern Corridor Integration Projects Summit showed how East African Community has so far brought forth vast evolution of regional development as a result of this project. Their constant support has so far driven this noble regional development project. A number of milestones have been reached. For instance, under the Northern Corridor summits, partner countries have already agreed on the removal of non-tariff...

A free trade agreement has the potential to transform the continent, World Bank President Jim Yong Kim said on Wednesday in a speech at the Tripartite Summit in Sharm El-Sheikh, during a two-day visit to Egypt.“My hope is that you find a path to finalize a trade agreement that presents new economic opportunities for the poor and vulnerable to lead better lives, Kim said. This is an important moment toward a brighter economic future for the continent, connecting Cairo to Cape Town and much in-between will integrate Africa more completely into the global economy, he added. He expressed strong commitment to the Middle East and Africa regions, praising the 26 member countries of the East African Community (EAC), the Common Market for Eastern and Southern Africa (COMESA), and the Southern African Development Community (SADC) for moving toward establishing a Tripartite Free Trade Area, the largest in Africa. “In Africa and the Middle East regions, we provided nearly $20 billion in assistance in 2014, and we’re on track to provide similar levels this year, he said. Kim met with President Abdel Fattah El-Sisi and government officials to discuss Egypt’s key role in regional economic development, and how the Bank can best support the country in achieving shared growth, economic inclusion, and social justice to address the needs of the poor and vulnerable, especially in lagging regions. Source: Star Africa

The third COMESA-EAC-SADC Summit yesterday signed a new trade pact creating a common market across half of the continent. The new pact, the Tripartite Free Trade Area (TFTA) which must still be ratified, is a critical step in opening up opportunities for business and investment within the 26-member bloc of 625 million people. Egyptian President Abdel Fattah al-Sisi, President Robert Mugabe of Zimbabwe, President Omar al-Bashir of Sudan and Kenyan Deputy President William Ruto were among the leaders who signed the pact at a summit in the Red Sea resort of Sharm el-Sheikh, Egypt. Sisi said the launch represents a "very important step in the history" of the regional integration of Africa. "We have told the world today... of our desire to adopt practices that will increase trade among ourselves. We will do whatever is possible to activate this agreement," Sisi said. Teddy Kaberuka, a Rwandan economic analyst, said the TFTA will benefit Rwanda and the wider region, especially because it will "attract more investors to the region." She described the deal as 'historic'. "It creates a market of 600 million people with a combined GDP of US$1 trillion. With the TFTA, many challenges will be lifted, including non-tariff barriers, technical barriers to trade and dispute resolution, import and export fees, transit procedures, simplification of customs documents, rules of origin, and tariff liberation." Once states ratify the TFTA through their respective national parliaments (within two years), benefits will include growth in intra-regional trade, experts say. The reduction or elimination of...