G8 Should Accelerate Support
Since the 2002 G8 Summit in Kananaskis, Canada, African development has been a high priority on the agenda. The Kananaskis Summit adopted the Africa Action Plan, which was implemented within the framework of the New Partnership for Africa’s Development (Nepad), an African-led initiative to deal with the continent’s developmental challenges.
While the Action Plan has contributed to the social and economic development of Africa, there are now growing concerns, escalating with the global economic crisis, that G8’s assistance to Africa will significantly drop at exactly the wrong time. The G8 Africa Action Plan seeks to support Africa’s development by establishing partnerships guided to a large extent, though not wholly, by the African Peer Review Mechanism (APRM).
China Sets Trade Target with the EAC
China is looking for ways to increase trade with the EAC states. According to the country’s envoy to Tanzania, Liu Xinsheng, the Asian country has set a trade volume target of US$100bn with EAC states by 2010. In 2006, the trade volume was estimated at US$55.5bn.
China is also looking into doubling its assistance to African countries. The country has already written off a total of US$1.6bn it was owed by 31 African countries. The bilateral trade agreements signed between China and Kenya include the Agreement on Economic and Technological Co-operation between the People’s Republic of China and the Republic of Kenya and the Agreement on Trade between the People’s Republic of China and the Republic of Kenya that was signed in 1978.
Launch of Web-based Trade Licence Registry
Kenya’s efforts aimed at simplifying and cutting the cost of doing business in the country got a boost following the launch of a web-based register of all operative licences. The launch of the electronic registry is a progress on policy to reform the business environment that saw over 315 licences eliminated and others simplified between 2006 and 2007.
The new development comes with a promise that within the next eight months, the system will be upgraded, making it possible for applicants to inquire about a licence, apply and pay on-line. Already, a Bill to entrench the reforms into a legal framework and ensure permanency has been tabled in Parliament and, if passed, could be enacted by December 2009.
Government to Tackle Climate Change
Kenya’s failure to take action on climate change will result in losses running to trillions of shillings, ranging from reduced arable land to deaths from hunger. But, this can be reversed if economic plans are revised to include climate change scenarios and how to lessen its effects. Climate change will mean higher temperatures in countries like Kenya, to peak in 2050 at an additional two degrees centigrade and 7.5 degrees more by 2090, if no action is taken today, research shows.
Already, rising temperatures have resulted in melting of glacier at Mount Kenya, leading to unpredictable water levels downstream. In Kenya, the rise of the Indian Ocean will result in the loss of land used to grow mangoes, cashew nuts and coconuts.
Export Revenue Rising
Although export revenue is increasing, the trade balance deficit is still getting bigger. Therefore, a strategy is being implemented to diversify export products and add value to them. Although there was a marked increase in exports in 2008, with revenue amounting to US$256.69mn, compared to US$176.7mn in 2007, there was also a large increase in the value of imports as a result of increase in commodity prices, which resulted in an increased trade balance deficit.
The average exports performance over the last four years has been relatively low, with a value of US$160mn on average, which represents a mere 29.8 percent of the imports during the same period. The recurrent trade balance deficit underscores the importance of substantially widening the Rwandan export base.
Road Network to be Ready Soon
Infrastructure development in the Kigali Free Trade Zone (KFTZ) will be completed by the end of 2009, a move that will open doors for investors to buy plots and develop them. Seven to 10 kilometres of road network has already been set up and will be developed with stones and then tarmacked.
The project is expected to cost between US$10mn and US$15mn. A marketing campaign will be kicked off to create awareness on the importance of having a plot in the KFTZ and how they will benefit from tax free products. Prices are not yet fixed, but the proposed ones will be taken to the cabinet for approval.