EAC's Joint Cargo Clearance Deal Bears Fruit for Traders

 

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Traders are saving up to $300 (Sh30,600) per transaction through more efficient joint clearance of cargo by EAC partner states at Mombasa port.

An audit of the Single Customs Territory (SCT) system that was recently adopted by Kenya, Uganda, Rwanda, Burundi and Tanzania also showed that cargo clearance time at the port has dropped to an average of four to six days, from 18 to 22 in 2013.

“Customs documentation requirements have been reduced by over 50 per cent and one customs agent is required to clear goods right from the Port of Mombasa or Dar-es-Salam to the Ugandan destination,” the Uganda Revenue Authority revealed in a performance update.

The SCT system allows joint collection of Customs taxes by the East African Community partners.

Under the SCT deal that began in 2014, clearing agents within EAC have been granted the rights to relocate and carry out their duties in any of the partner states as part of a strategy to improve flow of goods and curb dumping.

Read more: EAC's Joint Cargo Clearance Deal Bears Fruit for Traders

Kenya-Tanzania Eye More Trade After Launch of First One Stop Border Post

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Kenya last week opened its first one-stop border post with Tanzania at Holili in a bid to cut the time taken to clear goods between the two nations and increase volumes of transshipment cargo through the Mombasa port.

The $12 million (Sh1.2 billion) facility at the Taveta-Holili crossing is intended to reduce by a third the time trucks take to cross the border and will also cut the distance between Mombasa and Bujumbura by 400 kilometres.

The one-stop-border post is first to be commissioned among the total 15 border facilities under construction across the EAC bloc and South Sudan.

Tanzania and Kenya are targeting joint infrastructure projects to help boost trade flow across their common border amid thawing relations between Dar es Salaam and other partners of the East Africa Community (EAC).

President Uhuru Kenyatta and his Tanzania counterpart John Magufuli said on Wednesday they would Thursday launch the construction of the Arusha-Tengeru dual carriage way and a bypass road in Tengeru as part efforts to smoothen the flow of cargo. The road is part of the Arusha – Holili – Taveta - Voi road that links northern Tanzania with Taveta, on the Kenyan side.

“We want to take our friendship and relations to higher levels by implementing projects that impact positively on the lives of our people,” the Heads of State said in a joint statement following a meeting on the sidelines of a regional summit in Arusha.

“I and my friend and brother President Magufuli have similar visions for our countries. We are targeting development projects that grow the economy and eradicate poverty,” said President Kenyatta.

Tanzania’s latest commitment to joint infrastructure projects with Kenya and coming in the wake of a joint oil pipeline deal with Uganda on Monday could help clear its latest “lone-ranger” image among other EAC partners on key integration issues such as trade and infrastructure development.

The fallout between Tanzania and Kenya, Rwanda and Uganda was fuelled by the formation of a “coalition of the willing” by the three states to push for faster integration within the EAC. At a meeting in Mombasa in August 2013 regional leaders including Mr Kenyatta, Yoweri Museveni (Uganda) and Paul Kagame (Rwanda) discussed key proposals to deepen integration without the input of Tanzania.

The meeting was followed later by another in Entebbe, Uganda in what most analysts read as a resolve by Kenya, Uganda and Rwanda to ditch the laborious consensus model of the EAC, in favour of one where there is a “leading tendency” by a willing few. The meetings drew anger from former Tanzania President Jakaya Kikwete who alleged a scheme to isolate Tanzania from the EAC bloc.

Dr Magufuli on Wednesday however said Tanzania was committed to EAC integration and pledged to work with other members of the bloc.

Source

 

Kenyan Textiles Can Compete with The Best

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While in school, Wandia Gichuru always aspired to work independently. Now, through sheer determination, hard work and an entrepreneurial spirit, she is living her dream.

She is the founder of Vivo, a clothing design and manufacturing firm that is set to compete with the best in the market. Ms Gichuru has worked creatively in the textile industry for the past five years focusing on women’s wear.

With no prior training in textiles, she overcome a steep learning curve and now wants to scale and compete with the likes of Spanish clothing and accessories retail giant Zara. To cut a long story short, she has succeeded widely.  

After graduating with an economics degree from University of Western Ontario in Canada, she began her working career as a banker at Citi Bank in Nairobi. She quit the job a few years later to join the University of Cape Town for an MBA degree. 

She then became a corporate woman for 20 years in a career spanning the World Bank, the UN and the British Department for International Development (DFID). Once again, she quit a well-paying job at DFID to found Vivo with four other relatives and friends.

She tells me that this new brand has great potential, and has been growing by between 30 to 50 per cent year-to-year, with seven outlets in Nairobi and Mombasa at present. The demand is so good that she is actively seeking space in Nairobi’s city centre. Online sales are on the rise and the local logistics firms have not let her down, always meeting her customer needs on time.

 Although she did everything by herself at the beginning, just like many start-ups, she quickly learnt to hire professionals and appointed a board of directors to help her run the enterprise. 

As a result, the company has grown to 40 employees and is looking to expand its retail network. She is very aware that if she wants to be a real big player in the market, she must outsource production and focus company energies on retail.

Read more: Kenyan Textiles Can Compete with The Best

KENYA TAKES OVER THE FAO/WHO COORDINATION ROLE FOR CODEX ALIMENTARIUS COMMISSION (CAC) FOR AFRICA

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The Government of Kenya has officially taken over the mantle as the new country host for the FAO/WHO Codex Coordinating Committee for Africa.

For the next three years, Kenya’s role as the FAO/WHO Coordinator will be to come up with regional Codex Food Standards for African countries with a goal to facilitate trade in the continent.

The coordination role will be facilitated through Kenya Bureau of Standards (KEBS), and as such will link the CAC Secretariat in Rome with Kenya in regard to any CAC activities, such as drafting Codex food standards and related text development.

Speaking at the handover ceremony KEBS Managing Director Mr. Charles Ongwae termed the move for Kenya as a major milestone for Codex food and feed standardization and step in the right direction.

“The participation from the 49 African countries members in various Codex committee meetings has accorded us the opportunity to influence standardization work in new areas which can be rolled to other daily products thus greatly improving the lives of Kenyans and Africans.

Read more: KENYA TAKES OVER THE FAO/WHO COORDINATION ROLE FOR CODEX ALIMENTARIUS COMMISSION (CAC) FOR AFRICA

Let Us Make Industries the Key Driver of Kenya Growth

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For Kenya to achieve its expected seven per cent economic growth as predicted by the Treasury, we must focus on the quick wins available to get us there.

The Treasury, in its budget review, has named exports promotion with a focus on expanding regional markets, commodity exchanges and special export zones as some of the sureties to steady growth in the next three years.

There is an obvious and immediate role for industrialisation as a key driver for economic growth and sustainability in Kenya.

Across the globe, industrialisation has been credited for increased per capita income, growth in international trade, high levels of employment and increased investment.

The growth of industry results in modernisation of other sectors and more so agriculture — without industrialisation we cannot continue to hope for increased productivity and quality of products.

Industry has also supplemented government efforts to urbanise regions, providing access to public amenities and in the process reducing poverty levels.

Last year, the government unveiled a blue print for Kenya’s industrialisation in which it evaluated the competitiveness of our manufacturing sector and areas that could be exploited in the short to medium term to bring about the desired economic transformation.

We have sought for ways to shield our economy from external shocks in the global market and yet here the programme identifies opportunities to strengthen the economy by increasing our manufacturing base.

The plan directs our focus to what have been our traditional strengths, in particular sectors whose potential has been overlooked.

It has four key targets which are to increase manufacturing’s contribution to the GDP to over 15 per cent, to create on million jobs, to have a fivefold increase in our Foreign Direct Investment (FDI), and to secure a top 50 position in the Ease of Doing Business Index.

Last year Kenya’s position in the index moved up 21 places to position 108. Actualizing the Kenya Transformation Industrial Programme will see us make great strides on the other indicators and improve the overall business environment in our country.

The blueprint will be driven through five pillars which include the launch of sector-specific flagship projects such as a food processing hub in Mombasa to process agro-based products and a textile cluster in Naivasha among others.

Transforming our country into an industrial hub needs not be a long term vision because we have everything that we need at present to make it a reality.

Source

State Injects Sh500m to Lift Kariobangi Artisans

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Kariobangi Light Industries, Kenya’s most prominent informal manufacturing hub, has been granted Sh500 million for new equipment to support innovators.

It is expected that new machinery would hasten the turnaround for incubation of manufacturing ideas such as the hugely successful Muharata – which has grown to be the biggest maker of posho mills in the region.

Industrialisation, Trade and Investment Cabinet Secretary Adan Mohamed has said the new funding for the incubation centre will spur the contribution of small businesses in job creation and the economy.

“Fundamentally, the centres are meant to address the issues of lack of technology, technology transfer, business management and linkages for Jua Kali artisans and have thus far trained over 1200 artisans considerably improving their manufacturing techniques,” said Mohamed.

He was speaking during a tour of the centre that is in the largely informal settlement to the East of Nairobi. It is the first investment by the State in developing skills among artisans, most of who end up in the Jua Kali sector while a few have built multi-billion-shilling companies. Apart from Muharata, which also manufactures chaff-cutters for chopping hay, a paint manufacturer called Solai Paints and a leather football maker - Dallas Sports International, are among the bigger firms.

Read more: State Injects Sh500m to Lift Kariobangi Artisans

Nairobi to Host up to 6,000 Delegates for Japanese Forum

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Close to 300 Japanese corporate captains, a host of African presidents, and up to 6,000 delegates will grace the Tokyo 6th International Conference on Africa Development (Ticad) Summit in Nairobi, the first of its kind in Africa.

Japan External Trade Organisation (JTRO) executive vice president Katsumi Hirano said that the CEOs would be seeking investment opportunities and partners in Kenya and Africa.

The event’s main agenda is to boost growth through trade and investment driven by the private sector.

“Ticad will attract more than 6,000 participants, of whom 300 will be Japanese CEOs. The CEOs, coming at the invitation of Prime Minister Shinzo Abe, will show the interest of the private sector in Africa’s economic growth,” said Dr Hirano during a meeting at Japan’s Institute of Developing Economies.

Mr Abe, together with President Uhuru Kenyatta, are expected to open the event on August 27-28.

Read more: Nairobi to Host up to 6,000 Delegates for Japanese Forum

Kenya Woos Ethiopian Investors

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Ethiopian delegates from more than 20 sectors are in the country to scout for investment opportunities. The two-day forum, the fourth since the two nations signed the Special Status Agreement, opened yesterday with both expressing concern over low trade volume.

Addressing delegates, Principal Secretary of International Trade Chris Kiptoo said even though trade between the two countries has been growing, the volumes are still low. He encouraged investors to tap into opportunities in major sectors such as energy, ICT, agribusiness, engineering and manufacturing.

This was echoed by Kenya Investment Authority Managing Director Moses Ikiara who noted that the range of products involved have been narrow. He encouraged Ethiopian investors to take advantage of incentives in Export Processing Zones and Special Processing Zones (SPZs) to boost the volumes.

“Kenya has a strong private sector with strong bodies to support its growth. This is supported by attractive incentives such as reduced corporate tax rate of 10 per cent for the first 10 years and 15 per cent for the next 10 years,” said Ikiara.

Ethiopia’s imports from Kenya in 2012 were worth $55.9 million. The country, in turn, exported goods worth $4.3 million to Kenya.

Source

Kenya's Future Lies in Industrialisation

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The prevailing discourse on Africa’s economic development has shifted from whether the region will develop, to how the continent can position itself as the next economic frontier.

The Economic Report on Africa 2015 takes cognisance of the fact that Africa has the potential to experience growth greater than the East Asian countries through industrialisation.

With Africa’s natural resource endowment, it is no wonder that a considerable share of its oil, minerals, and agricultural produce is exported.

Worryingly, however, is that the continent’s performance has been volatile, with short periods of acceleration followed by long spells of deceleration, underscoring serious shortfalls in some areas, notably in the industrialisation and economic diversification of many countries, a case not unique to Kenya.

The launch of Kenya’s 10-year Industrial Transformation Programme, informs the government’s stance to pull out all the stops to industrialise the country.

Read more: Kenya's Future Lies in Industrialisation

Nairobi Grabs Top Slot in FDI destinations in Africa

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Nairobi edged out Johannesburg to become the top destination of Foreign Direct Investments (FDI) in Africa in 2015 reflecting improving investor confidence in Kenya.

A report by an investment monitoring platform, FDI Markets also shows that FDI flows into Kenya rose 37 per cent in 2015 compared to 2014 adding that Kenya also attracted 12.6 per cent of FDI inflows into Africa, second only to South Africa's 17.1 per cent.

"This is further compounded by Nairobi attracting the most FDI on the continent at city level in 2015, beating Johannesburg, which has held this accolade since 2010," notes the report.

The report attributes the sharp upward trend to favourable conditions for doing business in Kenya where an investor enjoys a 10 year tax holiday upon setting shop and are allowed to repatriate all profits.

Kenya has attracted notable private equity and grants that are being used to fund public infrastructure projects such as the Standard Gauge Railway, Lamu Berth-cum railway line to Ethiopia and private projects in real estate, hospitality as well as industrial development.

Read more: Nairobi Grabs Top Slot in FDI destinations in Africa

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