KIGALI, Rwanda - The recently concluded 7th Northern Corridor Integration Project Summit in Uganda agreed on several key points intended to merge East African Community states together. Notable is the opening up of the airspace between Kenya, Rwanda, Uganda and South Sudan by 2015 which can lower cost for carriers in the region. “During the Heads of States Summit, the progress made in the implementation of each project was discussed and the Summit gave further directives, plus targets were set like in the previous Summits,” Monique Mukaruliza, the National Coordinator of the Tripartite Initiative Rwanda said last week. In attendance were President Paul Kagame of Rwanda, President Salva Kiir of South Sudan, and host, President Yoweri Museveni. Eng. Michael Kamau represented President Uhuru Kenyatta. “Among the many targets set is the ratification process of the Standard Gauge Railway Protocol which is to be completed by end of November 2014,” she said. Mukaruliza said the One Network Area will be officially launched by November 2014 between Kenya, Rwanda and Uganda. By December 31st , South Sudan will also join in a bid to reduce the cost of inter-regional calls and roaming charges. “Partner States are to implement One Network Area for data services by 31st December 2014, and develop regional standards and guidelines for inclusion of fibre optic cables in major national infrastructure projects by 31st December 2014,” she said. “The Power interconnection line for the section Masaka-Mbarara is to be upgraded to 220kv by December 2016 and the regional standardisation...

The process of reinstating Kenya on the list of countries whose products are allowed to enter the European market duty-free can now begin after Tanzania finally endorsed the Economic Partnership document agreed between the East African Community and the European Union. There was concern among exporters, mainly from Kenya, after the Tanzanian team that participated in the negotiations, alongside their counterparts from Kenya, Uganda, Rwanda and Burundi, left Brussels without initialling the document following the conclusion of the talks in Brussels, Belgium, last Tuesday, October 14. However, Kenyan exporters breathed a sigh of relief after Tanzania initialled the EAC-EPA document on the evening of Thursday, October 16, in Brussels. “Tanzania initialled the EAC EPA yesterday evening in Brussels. Hopefully, it will now not take too long for Kenya to come back to a duty-free quota-free access to the EU market. The reinstatement could take between three and six months,” said Christophe De Vroey, the trade and communication counsellor at the EU Mission in Kenya. Kenya’s Foreign Affairs Principal Secretary Karanja Kibicho and EU head of delegation to Kenya Lodewijk Briet had said on Thursday during a press conference that negotiators from Tanzania had asked for more time to consult on the final text. “They wanted to first seek authorisation before signing the document. However, they later confirmed that they will sign the document soon,” said Mr Briet. A highly placed source in Tanzania who attended the negotiations revealed that the country had declined to initial the agreement because consensus was...

After nearly one decade of back-and-forth negotiations, the five EAC states have finally initialled the Economic Partnership Agreement (EPA) with the European Union. Among its low-hanging fruits, the deal signed in Brussels last week marked the start of a six-month procedure for restoring Kenya to the list of states that export goods to Europe without paying duty. Up to this point, we can only say our negotiators deserve every pat on the back for taking urgent steps to eliminate Sh670 million in monthly tax bill that local exporters have been exposed to since October 1. For practical purposes, however, the deal signed last week can only be implemented after it receives approval of national and regional legislative organs of both the EU and EAC. And going by its rhetoric in the past, the EAC political class is likely to prove a hard nut to crack too. We wish to take this early opportunity to appeal for sobriety in EPA discussions. In the last ten years, the EPA negotiations have been known to produce more smoke than heat. But the economic losses suffered by Kenya’s exporters since October 1 only imply that time for politicking is over. Granted, the technical experts who negotiated EPAs confronted some of the toughest economic and political questions linked to EPAs. And they settled for what they saw fit for EAC. The political class too, has a well-defined mandate in the region that cannot be taken away just because EPA is urgent. They have a role...

A new comprehensive economic partnership agreement between the EU and the East African Community (EAC) should provide legal certainty for businesses, and open a long-term perspective for free access to the EU market for Burundi, Kenya, Rwanda, Tanzania and Uganda, said the European trade commission. “The East African Community region stands out for its dynamism, and ambition to develop as an integrated region. The comprehensive partnership agreement we have just reached is the best way in which we can support EAC’s aspirations”, said EU commissioner for trade Karel De Gucht in a statement. “We have concluded two other development-oriented partnerships with African regions this year. It’s a source of my personal satisfaction also to see East Africa benefiting from the opportunities that Europe wants to offer. I hope that these EPAs will be signed and implemented soon.” The agreement lays “new and stable” grounds for EU-EAC trade relations, said the commission. “East African Community countries will now be able to focus on improving their economic performance without worrying about the potential loss of full duty-free quota-free access to the European market due to their improving status,” it said. All EAC members will benefit from the same “predictable and uniform” trade scheme, it added. Source:: Under current news

KIGALI (Xinhua) -- Lack of an East African transfer pricing legislation is limiting companies from trading with one other, thus affecting efforts to boost intra regional trade, top business leaders said on Sunday. According to company managers, there is a need to have an EAC transfer pricing legislation that is recognized by all partner states. It’s also hindering investors from exploiting investment opportunities that are within the region. "Businesses are also not happy about some jurisdictions that are imposing significant penalties relating to transfer pricing adjustments by tax authorities, thus affecting the profitability of companies," Hannington Namara, president Rwanda private sector federation said. He noted that partner states have recently introduced separate transfer pricing regulations by thus making it difficult for companies to trade with one other with the community. "The need to put in place a modern excise system which is clear and certain and reflects the current business environment but also enables compliant businesses to move products quickly in the EAC is imperative for the region’s economic development," David Tarimo, a leading tax expert at Price Water House Coopers (PwC) said. Failing to have the laws harmonized, could lead to market distortions and therefore spill disaster to regional economic growth, business experts warned. According to business leaders that attended the just concluded East African Community business Summit, these rules must be harmonized in accordance with the Organization for Economic Co- operation and Development (OECD), so as companies can be able to cross trade more efficiently. "Could we not...

The East African Community is seeking at least $43 billion to fund key infrastructure projects for the next 10 years as it moves to address its current huge infrastructure gap. The infrastructure projects include railway, energy, ports and harbours, inland waterways and information and communications technology (ICT). Some of these projects will be unveiled at the upcoming East African Heads of State Summit that will take place alongside the third infrastructure retreat of the region. “We will be presenting a 10-year investment strategy (for infrastructure) to heads of state. We estimate that the gap for EAC priority infrastructure is about $43 billion. It could be more. We are prioritising projects and financing — for some of the infrastructure it is the engineering work, feasibility studies and pre-feasibility that need to be done. For others, it is putting together financing packages and for yet others it is gauging implementation,” Dr Richard Sezibera, the East African Community Secretary General, told The EastAfrican on the sidelines of the East African Business Summit in Kigali last week. He said the EAC is currently involved in discussions with different development partners including the World Bank, the African Development Bank, the European Investment Bank as well as individual countries, particularly China and India. However, the region also plans to raise resources on the domestic market. While the exact financial instrument is yet to be determined, the East African Development Bank (EADB) is expected to be the lead transaction adviser should the region decide to issue an...

President Paul Kagame was attending the sixth East African Business Summit with his Kenyan counterpart Uhuru Kenyatta when an aide alerted him of a complaint from Gatuna border post. Apparently, travelers were lamenting the slow clearance and wanted an end to it. In response, the President immediately ordered the police chief and other relevant officials to rush to Gatuna, find out the problem and solve it. Kagame used the timely anecdote to respond to a question posed by a participant representing Kenya Association of Manufacturers regarding frustrations at the slow transition from conference resolutions to real action to remove non-tariff barriers. Obviously, President Kagame's anecdote was calling for a glove and gumboot kind of approach to removing trade barriers that continue to encumber smooth flow of goods and services in the region. "It's a burden of leadership which falls upon all of us [politicians and business leaders]," the President said, added that partners must keep pushing until desired results are attained. That was on the opening day of the summit which ended on Friday in Kigali. The two presidents in attendance told business executives from the region what they wanted to hear; they had also come ready for the tough questions which indeed came in handy during the interactive question and answer session. "As Presidents, we have decided to meet every two months at summit level to review decisions taken at meetings such as this," remarked Kenya's Kenyatta. Kenyatta said the Political will to respond to the needs of the...

Nairobi; Kenya: Kenya, Uganda and Rwanda are in the final stages of deciding on a consultant to oversee building a pipeline to pump the region's oil to the coast for export, a senior Kenyan Energy Ministry official said yesterday. In June, the three countries invited bids for a consultant to oversee a feasibility study and initial design for the construction of a 1,300km oil pipeline to transport crude to the Kenyan coast. "We are in the final stage of negotiating with the consultant who will do a feasibility study and the front end engineering design for a crude oil pipeline which should run from Hoima to coastal region of this country," Joseph Njoroge, principal secretary at the Ministry Energy and Petroleum, told an East African oil and gas conference. "Very soon, early next month," Martin Heya, commissioner of petroleum at the same ministry, said of the award timing. Njoroge said the consultant would be required to finish the study within five months. In addition to the pipeline, the consultant would be required to supervise the construction of a fibre optic cable from Hoima in Uganda through the Lokichar basin in northwest Kenya to Lamu, and tank terminals in Hoima, Lokichar and Lamu. The project will also involve the construction of a 9km pipeline from the Lamu tank terminal to an offshore mooring buoys. Kenya's Energy Ministry has said having a single consultant for the whole project was to ensure consistency in the quality of the whole pipeline. East Africa has...

East African Community (EAC) member States are to blame for the delay in the harmonisation and standardisation of the region’s tax system, an industry expert has said. Ashif Kassam, the executive chairman of RSM Ashivir, says the regional trading block is losing time on the elimination of double taxes. “Tax policies should be common to each of the partner States. It is important that governments move with speed to avoid losing time. Let us standardise our tax systems, ease movement of labour and eliminate double tax elements. Let us implement the double tax system,” he said at the sidelines of the ongoing East African Business Summit in Kigali. Mr Kassam called for enhanced pace of integration, but warned that plans to establish a common currency should be carefully thought out to avoid mistakes that have happened in the European Union. “We already have a Single Custom Territory. My concern is in the implementation of the Single Monetary Union. We are at different stages of development as a region. We have different tax collection systems and having a common currency will be a big risk like what happened in European Union and the economic recession. However, let us do the rest of integration quickly,” he said. The tax expert emphasised that differences in tax regimes and particularly in the rates and how governments administer the levies needed to be addressed. In Kenya Value Added Tax (VAT) is charged at 16 per cent while Tanzania, Uganda, Rwanda and Burundi charge the tax...

President Uhuru Kenyatta and his Rwandan counterpart Paul Kagame have challenged East African Community member States to open their boundaries for free movement of goods and people in order to fully realise regional integration. The two heads of State said fears that opening up of borders would see some countries out-compete others are “primitive and unfounded.” Speaking at the launch of the Sixth East African Business Summit in Kigali, the two Presidents said political will is required to fully integrate the region. “Let us be frank with each other; we have not been able to move fast because of national fears, a sense of insecurity that if one opens up their people will be denied jobs and other opportunities. “We must deal with these fears. We need to start talking about our people being the East African people. Kenya and Rwanda have made progress on this. “We have been clear on opening up our labour market to take full advantage of the labour that is available in the east African region,” Mr Kenyatta said while answering questions from KCB chief executive officer Joshua Oigara. President Kagame, who hosted the event, said Rwanda is not just allowing east Africans to set up business and work in the country but dealing with the issue of wrong mentalities. “We have unwarranted worries. We have experimented this in Rwanda. When we opened our borders, removed restriction on work permits and visas, everyone benefited. We have benefited,” Mr Kagame said. He said some Rwandans had...