Private sector’s continuous engagement with governments in the six East African Community (EAC) partner states is vital in boosting intra-regional trade, which currently stands at only 20 percent. The Chief Executive Officer (CEO) of the East African Business Council (EABC), Mr Peter Mathuki made the observation in Dar es Salaam yesterday on the sidelines of a breakfast meeting with heads of the business community in the country. Read more. Source | Daily News
Foresight Africa 2019 is a report by the Brookings Institution highlighting the triumphs of the past years as well as strategies from our experts to tackle the remaining obstacles that influence outcomes in various sectors such as trade, governance, youth development and climate change.
On matters trade and investment, the authors assess the potential of the African Continental Free Trade Agreement (AfCFTA) and look at the implications of the new free trade agreement. AfCFTA stands to knock down barriers to intracontinental trade and investment, thus accelerating industrialization, and facilitating economic diversification and inclusion.
In 2018, Nigeria’s economy stuttered, foreign investors welcomed South African President Cyril Ramaphosa’s anti-corruption drive and budget discipline, and despite a rebound in oil prices, Angola’s economy continued to experience a slump, while Ethiopia’s new reformist prime minister Abiy Ahmed implemented a series of economic reforms aimed at attracting foreign investor as well. But what is in store for Africa in 2019? Here is a snapshot. Read more. Source | New Times
US businesses are huge in Africa. In Kenya, the technology and communication is littered with many start-ups mainly with a link to the US. The Fintech environment too in Kenya is also marked by American companies. In total, US investment in Kenya inform of Foreign Direct Investments is on a rising trajectory. In Africa, the US investments go beyond Fintech with massive investment in health, agriculture, oil and gas as well as other forms of energy. Its influence has been waning but now, this is taking a turn with the new strategy. Read more. Source | The Exchange
East African Community member states are working on joint rules and regulations to rescue troubled banks, as part of measures to enhance the stability of the sector in the region. The region’s deposit insurers started by sharing information on best practices as a first step to merging the rules and regulations governing the protection of depositors’ cash in the region.
The insurers are considering the possibility of adopting a common framework for addressing the issues facing financially distressed banks to avert further failures. Read more. Source | East African
Policy Reform Memo addresses restrictions in Kenya’s mining sector to facilitate FDI and attract regional investment
The USAID Hub works with the region’s public and private sectors to expand opportunities for trade and investment in the East African Community (EAC) by supporting the accelerated implementation of the EAC Common Market Protocol (CMP). A key focus of CMP implementation is to support the enactment of laws, regulations and administrative measures that facilitate the free movement of capital, services and goods in the EAC. In line with these principles, the Hub drafted a reform memo that addresses restrictions on foreign participation in the mining sector in Kenya’s Mining Act 2016.
Recently, there have been calls in Kenya to reform the Mining Act. The Kenya Chamber of Mines chief executive Moses Njeru told the East African newspaper that the law was seen as an inhibitor for the sector, citing its requirement for investors to obtain consent from communities occupying targeted land before receiving licenses to explore and extract minerals. The Hub’s reform memo contributes to these broader private-sector led efforts by highlighting another investment-inhibiting area in the act.
Section 38(1) of the Mining Act prohibits the government from issuing prospecting and mining rights on community land without the consent of the community, despite the Act stipulating that every mineral is the property of Kenya and is vested in the national government in trust for the people of Kenya. In addition, Section 124 (1) of the Act provides that artisanal mining rights shall only be granted to applicants that are Kenyan citizens in the case of individuals, and only those that have a least 60 percent of their shareholding held by Kenyans when it comes to companies. Section 164 (1) of the Mining Act provides that an applicant for a mineral dealer permit should have 60 percent of shareholding held by Kenyans.
These provisions are foreign direct investment (FDI) restrictive and inconsistent with Article 24 of the EAC CMP which requires Partner States to remove restrictions on the free movement of capital. These restrictions include those based on nationality, place of residence, current payments and where capital is invested. Annex VI of the Protocol identifies 20 operations, including direct investment operations (operations 17 to 19), that should be free from legal and regulatory encumbrances. These inter alia facilitate direct international acquisitions, greenfield investments, re-investment of profits in enterprises and outward direct investment.Read more
East African Community Partner States continue to introduce tariff and non-tariff barriers that are hindering intra-regional trade and putting integration at risk. Manufacturers of confectionery in Kenya, oil and fats in Uganda and a wheat and juice producer from Tanzania reported encountering tariff and non-tariff barriers that blocked them from entering regional markets. Read more. Source | East African
A regional business lobby has been taking a lead to advocate for liberalization of professional services across the EAC borders. The body, East African Business Council (EABC) brought together key players from the business community, to share insights, which were instrumental in the formulation of the Mutual Recognition Agreements for Accountants, Architects, Engineers and Veterinaries. Read more. Source | The Exchange
So far the benefits of the Single Customs Territory are already being witnessed by both the public and the Private Sector in the region, The East African Business Council Chairperson has noted.
According to the EABC Chairperson Mr Nicholas Nesbitt, with the Single Customs Territory regional customer-centric procedures have been put in place eliminating duplication and reducing the cost of doing business. Read more. Source | The Exchange
The East African Community (EAC) bloc is developing a regional Science, Technology and Innovation (STI) Policy to boost its competitiveness, officials said on Tuesday.
Gertrude Ngabirano, Executive Secretary of the East African Science and Technology Commission (EASTECO), told a media briefing in Nairobi that the draft policy will be submitted to the EASTECO Governing Board for adoption before consideration and approval by the EAC Council of Ministers of the six member states. Read more. Source | New Times