National carriers in the five-nation East African Community bloc stand to lose market share to international carriers should the proposed open skies policies be implemented, a study suggested yesterday. The study by global management consulting firm InterVISTAS on costs and benefits of open skies shows that increased competition from non-national carriers could threaten the profitability of airlines in the region. “While increased competition has the potential to weaken the viability and profitability of home carriers in some instances, liberalisation also offers a means to restructure the carriers and protect profitability by expanding into new markets,” InterVISTAS senior vice president for aviation forecasting Ian Kincaid said in Nairobi. The research states that whether the home carrier prospers or suffers under liberalisation will highly depend on the quality of its management and how the carrier chooses to respond. In 1999, the Yamoussoukro Decision was adopted by 44 African countries, recognising that the strict regulatory protection that sustains national carriers has unfavourable effects on a country’s economic growth. The decision was aimed at liberalising air transport in African countries to create a conducive environment for foreign and regional investment.The survey commissioned by the East African Business Council and the EAC Secretariat is aimed at providing information on the impact of implementing the Yamoussoukro Decision in East Africa. “Implementation of YD remains pending mostly due to a lack of clear and specific information regarding the impacts of enacting such liberalization,” Kincaid said. EABC CEO Lilian Awinja reiterated the sluggish implementation of open skies by...

Kenyan lawyers will start practising in other East African countries if an agreement between member states is approved. The government, through the Ministry of East African Community (EAC) and the department of Labour and Social Protection, has announced elaborate plans that will enable lawyers to work freely within the bloc. Barack Ndegwa, the secretary in charge of integration in the State department responsible for the EAC, said there is a mutual-recognition agreement being drafted to facilitate the move. “We are working on the mutual-recognition agreement that will see lawyers from the neighbouring EAC partner states such as Uganda and Tanzania come to work in Kenya while ours also work in their countries,” said Mr Ndegwa. He was speaking in Nakuru during a two-day workshop organised for Law Society of Kenya lawyers. Mr Ndegwa noted that the establishment of the EAC court in Tanzania will require lawyers from member states to handle matters and represent their clients at the court. He said lawyers from member states need exposure on the East African Treaty laws that are being drafted to understand how the East African Court of Justice operates. He said the court has already opened registries in the capitals of member states. Mr Ndegwa was accompanied by East African Court of Justice Registrar Yufnalis Okubo and David Njoka, the director of political affairs in the State department of the EAC and integration. Source: Daily Nation

Prevalence of trade barriers in the region is a contributor to food shortage especially hampering movement of grains. East Africa Grain Council (EAGC) says trade barriers have pushed business of grains from formal, well-regulated channels to informal, unregulated and inefficient mediums. Grain experts say informal trade translates to higher food safety risks, lower quality, high post-harvest losses, higher transaction costs and ultimately higher consumer prices. “Today, 70 per cent of maize, 63 per cent of dry beans, 57 per cent of rice and 89 per cent of millet are traded informally across national borders. This scenario has exposed more than 10 million East Africans to hunger,” Eagc Board Chairman Bernard Otim told People Daily during the council’s Annual Members’ meeting in Nairobi. Despite importance of regional food trade in availing markets for producers and affordable food for consumers, export bans, import bans or both, are active in a number of countries in Eastern and Southern Africa region. Otim said there are close to 20 countries affected by such a scenario in the region. “It is an irony that our governments have been quick to sign regional and continental commitments to support agriculture but have been slow to back such commitments with concrete action and resources,” he said. A few of these countries have committed 10 per cent of their national budgets to the agricultural sector as per the AU Malabo Declaration. Regrettably, development of the grain sector in the region is inhibited by a restrictive policy environment, characterised by ad...

A newly designed Short Messaging Service for reporting trade barriers within the tripartite regional economic blocs has been launched. The SMS will supplement the current web based online system for reporting, monitoring and elimination of Non-Tariff Barriers (NTBs) used by the Common Market for Eastern and Southern Africa (Comesa), the East African Community (EAC) and the Southern African Development Community (Sadc). The Tripartite online reporting system is a real-time, mechanism for reporting, processing, monitoring and resolving NTBs and is available on www.tradebarriers.org. It was operationalised in November 2010. The SMS tool was first launched in 2013 in Zambia to facilitate a diverse spectrum of economic operators, especially the informal and small scale traders who may not have access to the internet. “At the time the design of the SMS reporting too, there was a central number to which the economic operators in different countries could send the SMS messages to report the trade obstacles that they could have encountered,” Mr Tasara Muzorori, senior trade officer in Comesa said. This was expensive for the economic operators as it involved incurring roaming charges. “It was also a challenge to publicise that central number to the relevant players in each of the countries as the foreign numbers did not identify with local users,” Mr Muzorori said. “Further, the system was faced with sustainability challenges as it was operated outside the National NTBs structures thereby requiring continued donor support to cater for administration costs.” This led to the re-design of the SMS system whereby each...

The six member States of the East African Community (EAC) are set to meet this week in Rwanda to push for the implementation of the One Area Mobile Network, officials said on Monday. Kenya's Communication Authority Director General Francis Wangusi told Xinhua that Kenya, Rwanda, Uganda and South Sudan are already part of the single network. "Later this week EAC ministers in charge of telecommunications will discuss ways to fast track operationalization of the single network," Wangusi said on the sidelines of the opening ceremony of the 36th Ordinary Session of the Administrative Council of the pan-African postal union. Once the single area network is effective, all intra-EAC mobile tariffs will be harmonized so that the calls within the trading bloc will be treated as local calls. Wangusi said that the overall objective is to reduce the cost of communication in the region. "It is unfortunate that it is cheaper to call Europe, Asia and the US from EAC partner states than it is to call other member states," said Wangusi. While South Sudan has joined the single network, it is yet to implement the network, and Tanzania will have to amend its telecom laws before it becomes part of the network. Wangusi said that due to civil strife in Burundi, it may take the country longer than expected to join the single mobile network. The one area network will be a building block to the Smart Africa Initiative that aims to make Africa a single mobile area network. Wangusi...

East Africa still seems relatively unloved as a petroleum province and yet it has a number of positive aspects: There is a regional entity, the East African Community, which draws together Kenya, Uganda, and Tanzania (but not Mocambique). There is a declared ambition to bring energy to the combined population of 150+ million but little yet in the way of actual development or actionable plans. Post Brexit, the UK Department of International Trade (DIT) has declared an Oil & Gas High Value Campaign for East Africa, the aim being to deliver opportunities for UK companies in the region. DIT has representatives in-country and an officer in Whitehall who carries the regional responsibility: DIT's current early focus seems to be on the big gas (LNG) developments offshore Tanzania and Mocambique (see 3.). There is no shortage of resources and reserves. Significant oil has been found onshore in the rift plays of Uganda and Kenya; there is commercial gas under production in Tanzania, and at least one further discovery; there are world class (??100 Tcf) gas discoveries offshore Tanzania and Mocambique; there is the potential for a significant oil play in the coastal region from northern Mocambique, through Tanzania, potentially into Kenya, first evidence of which may be provided by recent wells drilled by Aminex in Tanzania and Sasol in Mocambique, There is current production of gas in Tanzania at Songo Songo, Kiliwani-North and Mnazi Bay. There is an under-utilised pipeline from the producing fields up to Dar-es- Salaam. A possible starting...

The soaring cost of living in the country has forced scores of Busia residents to cross into Uganda to shop for basic commodities. A spot check by The Standard showed locals crossing the border to buy essential items like sugar, milk, maize and wheat flour, which are more affordable there. Retail shops in Uganda are selling a kilo of sugar at Sh150 compared to local supermarkets in Busia, where the cost has reached Sh200. Meanwhile, unscrupulous business people have taken advantage of the unavailability of basic goods in local markets to smuggle them into the country. Ugandan sugar and milk are finding their way through the porous borders of Busia and Malaba before being sold exorbitantly in Kenyan shops. The manager of a mini-supermarket located less than two kilometres on the Ugandan side confirmed that for the last one week, Kenyans have been swarming to the chain store to shop. "Most of our customers for the last one week have been coming from Kenya. They don't buy in bulk but in small quantities, certainly for family use," he confirmed. Busia Traders Association chairman Stephen Obala blamed the devolved units for doing little to safeguard Kenyans from the high cost of living. "The problem we are experiencing now cannot be blamed on the national government alone but the county governments as well because the essence of devolution was to bring resources nearer to the people," said Mr Obala. Mary Anyango, one of the Kenyans who cross into Uganda to shop, the...

The 2017/18 East African Community budget will be relatively smaller compared to the current closing financial year owing to the current economic situation, regional ministers have decided. During the recent meeting of the Council of Ministers in Arusha, Tanzania, the bloc’s Secretary General, Amb. Libérat Mfumukeko, submitted a budget proposal for financial year 2017/18 amounting to $113.8 million compared to the current budget of $101.4 million. “Owing to the current economic situation, all partner states are experiencing rationalisation of their national budgets and, therefore, it would be difficult to increase contributions to the EAC Budget,” reads a report of the central decision-making organ of the Community. “The meeting, therefore, agreed to a zero per cent increase in partner states contributions to the 2017/18 Budget.” The Council observed that although there is no increase in the individual partner states’ contribution, countries’ total contribution will increase after including contribution from the Community’s new member, South Sudan. From May 22 to June 3, the final sitting of the third East African Legislative Assembly (EALA), in Arusha, Tanzania, will mainly debate the budget estimates as adopted by the Council. MP Patricia Hajabakiga, chairperson of EALA Rwanda Chapter, told The New Times that nothing much is likely to change. “Of course the budget voted by EALA cannot go beyond the ceiling provided by the partner states. It is only rationalising within what is already available,” Hajabakiga said. “In case some institution needs something and maybe some other institution has excess then they will rationalise within...

Siemens will work more closely with the African countries Uganda and Sudan in the areas of power supply, industry, transportation and healthcare. The African states signed the corresponding Memoranda of Understanding (MoU) at the World Economic Forum 2017 in the South African city of Durban. The documents were signed in the presence of Brigitte Zypries, German Federal Minister for Economics and Energy, Joe Kaeser, President and Chief Executive Officer of Siemens AG and further high-ranking personalities. “Africa’s economies are gaining ground and can develop their full potential with the right partner. Siemens wants to support their sustainable development – with solutions and projects in Africa, for Africa. The agreements with our African partners are important steps along this path,” says Joe Kaeser,  Siemens President and Chief Executive Officer. “Our goal is to double our order intake in Africa to more than €3 billion by the year 2020.” “Africa is a continent with economic opportunities and the German industry is an outstanding partner for the countries of Africa to realize these opportunities. I am very pleased that with the agreements signed today, good progress is being made towards the goal of better infrastructure and thus more growth and employment. I particularly welcome the training program because well-trained skilled workers are a key pillar of prosperity and development. And it is precisely these elements that I also support with the ‘Pro! Africa’ plan,” says Brigitte Zypries, German Federal Minister for Economics and Energy. “Siemens is a company that invests for the long term, and...

Kampala. The awarding of several infrastructure projects to Chinese contractors has seen China overtake India as Uganda’s top country for imports. The 2016 statistics from Bank of Uganda (BoU) indicate that Ugandaimported goods worth $720.9m (Shs2.6 trillion) from China compared to $686.4m (Shs2.5 trillion) from India. There were declines in imports from both countries compared to 2015 with the sharpest decline being from India at 31 per cent. Chinese imports declined by only 2.1 per cent. This is because the plant, machinery and vehicles for several road projects were imported, even as the import market underperformed. “The fewer declines in imports from China are not necessarily a substitution of the source of imports. It has more to do with the fact that most of the infrastructure projects currently under way are being undertaken by either Chinese firms or Chinese funding, which ideally dictates the source of imports,” explained Mr Adam Mugume, the executive director research at BoU. From India, Uganda majorly imports pharmaceutical products, veterinary products, oils, distillation products, electrical, iron and steel, stationery products, among others. According to BoU statistics almost all these products recorded a decline in 2016. The largest composition of Uganda’s import value is the machinery, equipment and vehicles (capital goods) that declined from $1.2b (Shs4.2 trillion) in 2015 to $921b (Shs3.3 trillion) in 2016 – a $298m (Shs1 trillion) drop. This decline was brought about by a decline in the importation of vehicles from Japan. Imports from Japan, dominated by vehicles dropped by $100.43m (Shs3612b),...