Trade, Investment & Sustainability

EAC to Decide Fate of Trade Deal
The EAC Heads of State Summit holds the key to the resumption of negotiations on the Economic Partnership Agreement (EPA) with the European Union (EU), which stalled after EAC experienced financial constraints. The 9th Extra-Ordinary Summit is expected to give directives to enable the two parties resume the negotiations. The talks have not been able to start even after the EAC Secretariat reported that it had secured US$3.48mn from Swedish International Development Agency (SIDA) to facilitate negotiations by EAC experts.

The EAC Council of Ministers directed the Secretariat to ensure that this issue is brought to the attention of the Summit after East African Legislative Assembly (EALA) blocked the use of the grant to fund talks that were to be completed in November 2010

Report Shows Africa on Track in MDG
A progress report on Millennium Development Goals (MDGs) shows that two-thirds of developing countries are on track or close to meeting key targets for tackling poverty and hunger. The report, Global Monitoring Report 2011: Improving the Odds of Achieving the MDGs, released by the World Bank adds that, with improved policies and faster growth, these countries can still achieve the targets in 2015, or soon after.

Developing countries, majority of them in Africa, will also achieve the MDGs for gender parity in primary and secondary education and access to safe drinking water. However, the report shows that African countries are struggling to halve their population living in extreme poverty

Rwanda’s Private Sector Pushes for Tax Reforms
Rwanda’s private sector is pushing for tax reforms in what should see tax cuts on some products and services, effectively reducing the cost of doing business.

The Private Sector Federation has requested the government to consider reforming the tax policy in the upcoming budget to widen the tax base and bring the Small and Medium Enterprises — which constitute over 90 percent of the businesses in the country — to the heart of the development strategy

Tanzania Exports Ban Heralds Rise in Maize Prices
The ban on food exports by neighbouring Tanzania will pile pressure on domestic maize prices, analysts have warned, citing poor production prospects in the country’s main grain basket areas. Tanzania halted food exports to tame rising prices of staple goods, which have pushed its inflation rate higher for six straight months. Tanzania’s inflation rose to 8.6 percent in April from 8.0 percent in March on higher food and fuel prices, reflecting rising inflation across east Africa.

Analysts and market dealers said the latest move by Tanzania is likely to trigger distortions in the domestic grains market through panic-buying and hoarding. Maize trade in the region is mainly driven by informal cross-border imports and exports, meaning that the decision by Tanzania to block its borders will affect the flow of the commodity.

Traders Protest over Duty-Free Imports
A fresh dispute is brewing between Kenyan traders and their Ugandan counterparts over preferential treatment of a list of imports by the landlocked country. Kenyan traders want the introduction of new custom taxes in the 2011-12 budget to shield them from unfair competition posed by Ugandan products made from inputs imported duty-free. Experts say introducing new tariffs almost six years after Kenya scrapped all custom taxes on goods from her EAC member states is likely to attract a similar move from Uganda, which is Kenya’s top trading partner, threatening the region’s integration process

EPA: A Threat to Region’s Industrialisation
The EAC decided wisely to hold off the signing of the EPA with the EU. Signing it would have compromised the future development of the EAC region, as well as jeopardised the potential of regional trade and integration. Although the negotiations have not moved much, the EPA remains on the table and member states seem to be preparing themselves to re-engage. In this context, a very basic question must be posed.

Does the EAC need the EPA? If an EPA is signed, what are the costs and the benefits and would the costs outweigh the benefits?