Among optimists, the proposal by East African Community (EAC) member states to ban the importation of used clothes by 2019 is great because it could spark the growth of a local textile industry in the bloc. But pessimists say the move will complicate the region’s trade arrangements with leading partners including the U.S. which is also a large exporter of used clothes to the region. It could also increase the cost of clothes in countries where the majority of the population is poor and lead to the import of new cheap clothes to out-compete the very industries the regional governments seek to protect. Faced with these options, some business analysts are proposing a middle-ground that reflects the status quo. They say the region is better off allowing entry of used clothes as it also develops its own textile industry. “As a region, there’s need to allow entry of any products provided there  are no illegalities in the sale of those items on our markets while at the same time boosting  their  production locally,”  said Charles Ocici, the executive director at Enterprise Uganda, a USAID-sponsored agency for equipping skills to small and medium firms. He suggests a co-existence of used and new clothes in the regional markets and the use of taxes to ensure fair competition between them. That way, Ocici says, the burden of the ban will not only be felt by the poor but by all clothing consumers, who will, in turn, buy the locally made clothes. He added...

Plans to harmonize East Africa mobile tariffs to create a single mobile network face hurdles as some nations fear that their telecoms could suffer losses, officials said on Monday. Communication Authority of Kenya Director General Francis Wangusi told Xinhua in Nairobi that once a country is not sure of the consequences of the one area network, it needs to be conscious not to find itself making a mistake. Wangusi said that one of the things hindering the adoption of the single network is the fear of illegal termination of international traffic purporting to be local calls. "We are already experiencing cases where calls from outside East African Community (EAC) are being illegally terminated locally and then relayed as a local calls and this is denying revenues to local telecoms," he added. The one area network was introduced in 2014, but so far only Kenya, Uganda, Rwanda and South Sudan have joined the single network. Other EAC member states such as Burundi and Tanzania are not yet part of the network that seeks to ensure that all intra-EAC calls are treated as local calls. The regulator is seeking to purchase a device management system to monitor its network so as to prevent the illegal termination of internationals and raise the credibility of the single network. Wangusi said that EAC partner states are set to have a meeting towards the end of month in order to discuss ways to overcome the challenges. Source: Xinhua Net

State minister for Transport Aggrey Bagiire, last week on Thursday asked his Tanzanian counterpart to harmonise the preferential treatment his country offers to transit goods as a way of encouraging the use of the Central Corridor, Uganda’s alternative access to the sea. Mr Bagiire, while signing a Memorandum of Understanding (MoU) on reviving inland transport on Lake Victoria and development of a railway as part of the Central Corridor, to implore Tanzania to reduce the high road user charges. Currently, trucks from Uganda are charged $500 (Shs1.7m) each yet Uganda charges only $40 (Shs140,000) per truck from Tanzania. The exorbitant cargo transit fees, Mr Bagiire said, were discouraging the use of the port of Dar ss Salaam by Ugandan traders since it increases the cost of transportation. According to a statement issued by the Ministry of Foreign Affairs, which coordinated signing of the MoU, Mr Bagiire asked Tanzania to “consider revising the rates downwards” to attract more traders to use the route. Dar es Salaam is Tanzania’s principal port with a rated capacity of 4.1 million down weight tonnage (dwt) dry cargo and six million dwt bulk liquid cargo. Mr Bagiire signed the MoU on behalf of Uganda while Prof Makame Mbarawa, the Transport minister, signed on behalf of Tanzania in Dar-es-Salaam. The signing was witnessed by the Charge D’Affairs at Uganda High Commission in Dar-es-Salaam, Oscar Edule, Uganda Railways Corporation (URC) managing director Charles Kateba, and other officials from the two countries. The MoU also reinforces proposed plans by...

Local coffee farmers are set to eat big following a renewal of a partnership between the National Union of Coffee Agribusiness and Farm Enterprises (Nucafe) and Café River, an Italian large scale coffee roaster. This is a development that opens more market opportunities for Uganda’s coffee across Europe and beyond. According to Mr Joseph Nkandu, the Nucafe executive director, the move is a continuous business relationship that has been running for seven years between the farmers’ body and Café River, a company with a global repute in high end coffee roasting, grinding and reselling. A delegation from Italy was in the country recently on a fact finding mission about Nucafe membership, mode of operation on promoting social entrepreneurship in coffee agribusiness agenda and value chain management system. “What informed their coming was a review of the 7-year partnership that we have had with River Café and also how we can move forward because the market is becoming sophisticated. ,” Mr Nkandu said. Source: Daily Monitor

The East African Community is in the process of signing an economic partnership agreement with the European Union. So far, only Kenya and Rwanda have signed the agreement. Burundi is reluctant to sign the agreement in the wake of economic sanctions imposed on it by the EU. Meanwhile, Tanzania has commissioned a study on the effects of signing the agreement on the region. Uganda has stated that it will sign the agreement only if all the EAC member states reach a consensus, which seems difficult at this stage. However, of interest are the possible effects of such an agreement on the region as highlighted in the study commissioned by Tanzania. The research seems to conclude that it is not advisable for the EAC to sign the agreement due to a number of negative effects including the danger posed to local industries and reduced revenue from tax. The effect of the agreement, according to the study, is that it will open up the market to cheaper imports from the EU therefore posing danger to local industries. Furthermore, due to the reduction of taxes on such imports, revenue will be less. These are some of the reasons highlighted against the agreement. However, Kenya and Rwanda have signed the agreement as it gives them access to more markets. While I have not looked into the economic impact of such agreements, I believe that EAC member states can resort to using domestic laws to protect the local industry from whatever harmful effects that may...

As Kenya's general election beckons the race has effectively narrowed down to two horses. Either, opposition leader Raila Odinga , or incumbent Uhuru Kenyatta will be Kenya's president after August 8. The bid for State House has attracted eight presidential contenders in total. But in recent weeks the focus has shifted to Odinga's National Super Alliance and Kenyatta's Jubilee Party, both of which have recently unveiled their manifestos. While the manifestos look good on paper, depending on one's political leaning, they are unlikely to have a significant impact on how Kenyans will cast their votes. The majority of the electorate have already decided on their preferred candidate. Most will vote on the basis of their tribal affiliations. The latest polling by Infotrak shows that only 8% of Kenyans are undecided on which presidential aspirant to vote for. Despite the fact that party manifestos will not shift voting patterns, they do provide a policy snapshot of what the parties would prioritise were they to form the next government. The fact that neither the Jubilee Party nor the National Super Alliance manifesto takes much account of relations between Kenya and its peers in the East African Community, is noteworthy. And disturbing. A study of the two manifestos shows that neither has a coherent plan for regional integration. This should concern Kenyans, as well as the country's neighbours. Relations between Kenya and its neighbours aren't as they could be. A few months ago cabinet secretary for foreign affairs Amina Mohamed accused Kenya's neighbours of not backing her candidature for the chairmanship of the African Union commission. Uganda openly disputed...

The cost of transporting goods has dropped by over 30% for Uganda destined goods A delegation from Uganda to the World Trade Organisation in partnership with Trade Mark East Africa (TMA) has impressed Swiss investors with how efficient Uganda’s borders during a  a side event on Trade Facilitation on the sidelines of the Sixth Global Review of Aid For Trade in Gevena. The objective of this session was to show the extent to which Uganda with the support of TMA had undertaken deliberate and strategic moves to ease the cost of doing business. Amelia Anne Kyambadde, Minister of Trade, Industry and Cooperatives together with Frank Matsaert, Chief Executive Officer of TMA were on the panel to show case the One Stop Boarder Post (OSBP) in Busia. A live link connection was done to feed directly into the panel discussion to an audience of over 500 trade facilitation enthusiasts. A video highlighting the OSBP processes at Busia was showcased. The three-minute video highlighted: the One Stop Border Post; the Authorised Economic Operator (AEO) Scheme; and the Regional Electronic Cargo Tracking System. During the discussion, the Kyambadde fielded several questions moderated by Matsaert on why the OSBP; the challenges that obtained before; and the benefits of the OSBP in terms of cost reductions with regard to movement of cargo and clearance of goods. Matsaert observed that TMA’s efforts to facilitate trade in East Africa had focused on removing bottlenecks and improving efficiency along the main transport arteries. He noted that, after the...

State minister for Transport Aggrey Bagiire, last week on Thursday asked his Tanzanian counterpart to harmonise the preferential treatment his country offers to transit goods as a way of encouraging the use of the Central Corridor, Uganda’s alternative access to the sea. Mr Bagiire, while signing a Memorandum of Understanding (MoU) on reviving inland transport on Lake Victoria and development of a railway as part of the Central Corridor, to implore Tanzania to reduce the high road user charges. Currently, trucks from Uganda are charged $500 (Shs1.7m) each yet Uganda charges only $40 (Shs140,000) per truck from Tanzania. The exorbitant cargo transit fees, Mr Bagiire said, were discouraging the use of the port of Dar ss Salaam by Ugandan traders since it increases the cost of transportation. According to a statement issued by the Ministry of Foreign Affairs, which coordinated signing of the MoU, Mr Bagiire asked Tanzania to “consider revising the rates downwards” to attract more traders to use the route. Dar es Salaam is Tanzania’s principal port with a rated capacity of 4.1 million down weight tonnage (dwt) dry cargo and six million dwt bulk liquid cargo. Mr Bagiire signed the MoU on behalf of Uganda while Prof Makame Mbarawa, the Transport minister, signed on behalf of Tanzania in Dar-es-Salaam. The signing was witnessed by the Charge D’Affairs at Uganda High Commission in Dar-es-Salaam, Oscar Edule, Uganda Railways Corporation (URC) managing director Charles Kateba, and other officials from the two countries. The MoU also reinforces proposed plans by...

As long as the cost of Internet facilities and services remains high, Uganda says it will not be able to favourably compete in electronic commerce with the developed world. Until the least developed countries (LDCs), including Uganda are in position to fairly compete in the digital space, government will remain opposed to regulation that disadvantages the participation of poor nations in electronic trade. Electronic commerce or e-commerce is a term for any type of business, or commercial transaction that involves the transfer of information across the Internet. According to Trade minister Amelia Kyambadde, “…the need for multilateral rules on e-commerce is still too premature to be thought about.” Speaking last week at the panel discussion whose theme was promoting connectivity for LDCs, Ms Kyambadde said, LDCs have basic infrastructural challenges to deal with in building their e-commerce readiness. She said: “There is no level playing field. Reducing the digital divide would require a closer look at the cost of services such as data, infrastructure, and regulatory and institutional frameworks.” In her presentation as one of the panelists in a discussion held as part of the activities for the Sixth Global Review of Aid for Trade at the World Trade Organisation in Geneva, Ms Kyambadde argued that there is need to address issues of access, availability and affordability of ICT services and related products before rules are thought of. In Africa, about 25 per cent uses Internet as opposed to nearly 80 per cent in Europe; 65 per cent in Americas...

Civil society organizations have backed the East African Community (EAC) heads of states to ban the importation of secondhand clothes in order to build the capacity of cotton and textile industries within the region. “It is important that the decision by the heads of states to phase out secondhand clothes be supported in order to enable the EAC in general and Uganda in particular grow and enhance her local production capacity,” said Faith Lumonya. She is the programme officer of Southern and Eastern Africa Trade Information and Negotiations Institute (SEATINI). With specific reference to Uganda, the group argued that Uganda National Textile policy value chain analysis indicates that with added capacity at spinning, weaving and finishing stages, more revenue can be generated and more jobs could be created internally beyond the 2.5 million across the value chain. “As such, the EAC can implement measures to phase out secondhand clothes so as to boost her domestic industries,” the civil society groups told the media in Kampala. On February 20, 2015, the EAC heads of states directed the council of ministers to study modalities for the promotion of textile and leather industries in the region and stopping the importation of used clothes, shoes and other leather products from outside the region. This decision arose out of the need for the EAC to advance a market-driven integration by boosting manufacturing and industrialization; promoting forward and backward linkages and achieve structural transformation through high value addition and product diversification as stipulated in the EAC...