Travel within Africa is not easy, it is expensive and often frustrating. The regional blocs have been working on travel agreements, particularly air travel to facilitate easy travel, but the high cost of tickets and airport taxes are making travel still expensive and out of reach of many citizens. But the East African Community (EAC) is taking a giant step to make travel within the region cheaper by classifying air travel from one country to the other domestic. A report by the East African says by the end of 2017, flights between countries in the region will be classified as domestic. The benefits will accrue to travellers because, according to the report, it will lower the price of air tickets and increase the number of air passengers. “The change will see the price of air tickets drop by up to 12 per cent across the region, with domestic flyers charged a service fee of $5, compared with the $50 paid by international passengers,” it said. While it is easier and cheaper to travel from Kenya to Rwanda by air, it is practically impossible to travel from Ghana to Benin in West Africa. The EAC region is ahead of all the other blocs in Africa towards achieving integration. A 2016 Africa Regional Integration Index – which measure progress on regional integration, ranked the EAC the number in Africa. On the Index, the EAC came first with a score of 0.540, followed by the Southern African Development Community (SADC) which scored 0.531, and ECOWAS...

The Trade, Industry and Cooperatives minister, Amelia Anne Kyambadde, has held a high level meeting with a senior World Bank official to secure support for various government initiatives to usher Uganda into middle income status. According to a statement from Uganda’s permanent mission in Switzerland, Kyambadde, and Annabel Gonzalez, a senior World Bank Group director for Global Practice on Trade and Competitiveness met on Tuesday on the sidelines of the Sixth Global Review of Aid for Trade in Geneva. The meeting was held at the request of the World Bank. Also at the meeting was Michael Wamai, Counsellor at the Permanent Mission of the Republic of Uganda in Geneva. Kyambadde briefed the World Bank official on Uganda’s priority areas of commercial and economic interest and called for support from the World Bank. She appealed for support on the establishment of a warehousing and logistics system. Kyambadde said: “There is a current need for 60 warehouses with a capacity of 5000-1000 Metric Tonnes; and two big silos to store produce so as to avoid instances of food insecurity.” “Furthermore, Government is also promoting value addition to all our products through supporting, and attracting foreign direct investment in the agro processing industries. “It is for this reason that Government had taken the strategic decision to impose a duty on the import of second hand clothes in order to grow the textile industry with the view to improving house hold incomes, eradicate poverty and generate employment for many of our youth,” she added....

The year 2016 had a number of shocking global economic events, notable among which was the British exit from the European Union famously termed as the Brexit. This development came from a shock referendum whose results defied the predictions of many professional pollsters. There are several economic issues that informed the majority decision. To the British, it is those economic issues that seem to have made the EU seem more of a baggage than a benefit to them. Given that the East African Community (EAC), is an economic bloc built along similar tenets like the EU economic bloc, one needs to ponder whether such economic issues exist and could, therefore, potentially affect the EAC. Only taking early lessons and any appropriate corrective measures by the EAC member states would avert a future EU-Brexit situation in another economic bloc such as the EAC. The most visible 'Brexit' impact on the EAC was the fall in the value of the Pound Sterling. The Pound was massively sold off, which resulted in a rough 7 per cent decline relative to the Ugandan Shilling. For example, around June 2016 before the vote, the Pound was selling averagely at Shs4,884 and a week after the referendum, it was selling at an average of Shs4,483. The positive effect of the decline in the value of the Pound was to reduce the cost of studying and travelling to the UK. However, it made imports in Britain from the EAC such as flower cuts, vegetables and coffee less...

There has been a lot going on lately about the business climate in the region and the efforts necessary to locally make it more hospitable. Last week saw ministers from 26 African countries conclude a meeting in Kampala on Tripartite Free Trade Area (TFTA). Preceding this was the East African Manufacturing Business Summit in May in Kigali. The city also played host to the Common Market for Eastern and Southern Africa (COMESA) meeting last week to track implementation of the Airspace Integration Project. In the meantime, with an eye beyond the continent, the EAC Sectoral Council of Ministers of Trade, Industry, Finance and Investment were in Arusha last month where they adopted the terms of reference of a comprehensive cost-benefit analysis of the region’s trade with third parties. The first thing to note is that the TFTA brings together COMESA, EAC, and the Southern Africa Development Community (SADC). The other thing to note is the signing on of South Africa to be part of TFTA, which added the country’s heft to the free trade area’s viability. No matter that only Egypt has ratified it, with a minimum of 14 countries required to ratify the TFTA for it to become operational. The joining of South Africa, with Mauritius and Botswana expected to sign on in short order, means that the long held dream of Africa being able to trade with itself has taken another important step towards a Continental Free Trade Area. However, to this, the recent East African Business Council...

East African states once again missed the middle-income economy status by the end of June milestone, with per capita income of between $3,956 and $12,235. Data released by the World Bank recently shows that Kenya is the only country in the region that got close to becoming an upper middle-income economy. Its economy was rebased two years ago, branding it a lower middle-income country. Tanzania, Somalia, South Sudan, Uganda, Rwanda Burundi and Ethiopia are still classified as low-income, with gross national per capita incomes of below $1,045. Kenya has been ranked as a lower middle income economy with per capital of between $1,006 to $3,955, in the same category with Congo, Nigeria, Sudan and Egypt. Angola is one of eight countries in the world and the only African country that has moved from upper middle-income to a lower-middle income. Angola’s drop is a reflection of the structural economic shocks the country has faced as a result of the decreased oil prices and commodity prices in general. Individual governments in East Africa have been struggling to meet key growth targets under their long-term development blueprints in efforts to achieve middle income economy status. Kenya has Vision 2030, Uganda has formulated Vision 2040, Tanzania Vision 2025, Burundi Vision 2025 and Rwanda has Vision 2020, but there are plans to align all of them to the EAC’s Vision 2050. Though East African governments have laid down elaborate visions for their countries, the pace of execution remains largely unco-ordinated and execution has been relatively...

Rwanda, Tanzania and Uganda say their stance to phase-out used clothes imports should not result in their ejection from the US preferential trade programme. Senior officials from the three East African Community (EAC) countries, in Washington Thursday, opposed the move by a US trade lobby to restrict their eligibility status for the African Growth and Opportunity Act (Agoa). The Secondary Materials and Recycled Textiles Association (Smart) filed a petition with US trade authorities in March urging that the three countries, along with EAC member Kenya, be deemed ineligible for Agoa's allowance of duty-free textile and apparel exports to the US market. Lawrence Bogard, Smart's lawyer, said during Thursday's US government inquiry that the association's member companies would suffer major losses in jobs and revenues if the EAC ban on used-clothing imports is fully implemented. Partial loss Mr Bogard also argued that Kenya should be included among the EAC countries facing partial loss of their Agoa benefits. Top US trade agency had announced last month that Kenya would be spared review of its Agoa eligibility. The decision was said to be based on “recent actions Kenya has taken, including reversing tariff increases, effective July 1, 2017, and committing not to ban imports of used clothing through policy measures that are more trade-restrictive than necessary to protect human health.” But the Smart lawyer argued that Kenya ought to be included in the Agoa eligibility review until Nairobi clarifies its commitments. Smart specifically seeks confirmation that Kenya's reported imposition of minimum tariffs on containers...

Tanzania, Uganda and Rwanda are defending their decision to raise tariffs on imported secondhand clothes, saying it is based on current value, trade realignment and that —for Rwanda— it’s a one-off. The three countries are reacting to calls by a US business association to restrict their eligibility for the Africa Growth and Opportunity Act (Agoa). Together with the East African Community Secretariat, they have written to the panel of the out-of-cycle review, comprised of representatives of six US government agencies: the Departments of Commerce, Labour, Treasury and State, as well as the US Agency for International Development and the Office of the US Trade Representative. The review could decide if the three countries should lose some of the benefits of Agoa. Tanzania and Uganda, in their submissions, insisted that the doubling of levies on imports of used clothing, from $0.20 to $0.40 per kilogramme, was for realignments with the current value. Tanzania’s Trade Permanent Secretary Adolf Mkenda said increase or decrease of tax, duties and fees is a fiscal decision, which is implemented as part of annual fiscal measures. Tanzania also argued that the EAC decision to phase out importation of secondhand clothing and leather is yet to be implemented, meaning claims about loss of jobs by the Secondary Materials and Recycled Textiles Association (Smart) cannot be justified. “There is no scientific proof that changes in the trade pattern and other macroeconomic variables, including jobs and shipping were caused by the EAC decision as pointed out in the petition and...

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...

Twenty-six African countries are rapidly moving towards finalising a preferential trade agreement which will open up significant opportunities for South African exports. The countries being integrated into a tripartite free trade area (TFTA) — seen as a critical driver of regional integration on the continent — have a combined population of 625-million people and a total GDP of $1.6-trillion. Once the tariff negotiations are finalised, the TFTA will offer exporters preferential or zero tariffs into the markets of member countries. Department of Trade and Industry deputy director-general of international trade and economic development Xolelwa Mlumbi-Peter notes that this preferential access will provide better terms of trade than are currently enjoyed. "It means that we will be able to increase our exports and advance a developmental integration agenda and the development of regional value chains, as it would be cheaper, for example, for SA to import inputs from African countries." Currently, intra-regional trade on the continent is very low. Trade Law Chambers director Rian Geldenhuys said the progress made with the TFTA was "fantastic" and would offer huge opportunities for South African businesses if implemented, particularly as the Southern African Development Community (SADC) was largely dysfunctional in terms of the implementation tariff agreements. At this stage, the TFTA agreement consists only of the legal framework with detailed negotiations on tariffs for the different products still to be finalised. Non-tariff barriers and infrastructural blockages will be addressed at a later stage. The TFTA agreement which SA signed in Uganda last week is...