Latest news with #EACSecretariat
Zawya
12-06-2025
- Business
- Zawya
EAC ministers order probe on products requiring special tax treatment
East African Community (EAC) ministers have directed the Secretariat to institute measures aimed at abolishing special tax treatment for certain goods in the region in the next 12 months. The EAC Sectoral Council of the Ministers of Trade, Industry, Finance and Investment (SCTIFI) wants an investigation to ascertain the availability of these products in the region and the justification for the special treatment. They say applications for preferential tax treatment by member states must be backed by comprehensive and valid justification. This is in the latest attempt by the regional ministers to deal with persistent stays of application requests by member states, which are believed to be watering down the objectives of common external tariff (CET), including enhancing regional competitiveness and industrialisation. In a meeting held in Arusha May 26-30, the Council directed partner states to submit a list of not more than five products each, which are prone to preferential tax treatment and are available in sufficient quantities in the region by June 30, 2025. Read: EAC ministers suspend new levies on high-risk products pending reviewThe EAC Secretariat and the partner states are expected to undertake a regional study to establish the availability of the products manufactured within the region by the end of June 2026.'The meeting emphasised the need for justification for the requested stays prior to approval,' says according to the report of the meeting. The meeting noted that, despite the comprehensive review of the EAC Common External Tariff in May 2022 aimed at enhancing regional industrialisation, value addition and competitiveness, partner states have continued to submit numerous requests for stays of application on the same tariff lines.'This persistent trend suggests that national interests are still taking precedence over the agreed regional objectives, thereby undermining the uniform application and effectiveness of the revised CET,' says the report. Currently, there are 1,956 tariff lines under stays (22 percent of CET), with potential increase to over 2,000 lines (30 percent of CET).'This upward trajectory raises concerns and undermines the EAC CET,' the Council warns. They noted that some stays of applications were found to have minimal traffic, with transactions as low as $200. The EAC Council of Ministers, in April 2014, decided to do away with stays of applications and directed that a phase out proposal be developed, which was subsequently adopted by the Sectoral Council of the Ministers of Trade, Industry, Finance and Investment in May that year. But the directive is yet to be implemented, as countries still pursue this window of stays of applications and tax exemptions on various sensitive goods. It is argued that the excessive protection granted to sensitive goods should be removed and the products opened to competition, as most member states have abused this window. The EAC Council had agreed that the removal of stays of applications and duty remission inform the comprehensive review of tariffs. According to the ministers, the special tax treatment accorded to sensitive items is not anchored in the EAC Customs law and is stifling intra-regional trade. The ministers have proposed harmonisation of specific duty rates between partner states and verification of products where countries have sufficient production. In last year's budget, EAC ministers of finance agreed on duty remissions on raw materials and inputs used by local manufacturers to facilitate domestic production. Kenya was granted an extension of the current stay of application to import rice at a duty rate 35 percent or $200 per metric tonne, whichever is higher, for one year, instead of the EAC rate of 75 percent or $345 per metric tonne, whichever is higher, in order to meet local demand and enhance food security. It was also allowed to import wheat at a duty rate of 10 percent, instead of 35 percent for one year under the EAC Duty Remission Scheme. © Copyright 2022 Nation Media Group. All Rights Reserved. Provided by SyndiGate Media Inc. (
Zawya
09-06-2025
- Business
- Zawya
Kenya's new ceramics tax irks partners
Kenya has imposed excise duty on ceramic tiles originating from Uganda and Tanzania, setting off fears of a potential trade dispute with Kampala and Dodoma terming the tax as 'discriminatory.'Uganda brough this up before the EAC Sectoral Council on Trade, Industry, Finance and Investment (SCTIFI) during a meeting in Arusha last month (May 26-30), saying it has affected Uganda originating ceramic tiles, in contravention of the principle of National Treatment as enshrined in Article 15 of the EAC Customs Union Protocol and contrary to the broader objectives of the EAC Customs Union. Kenya imposed five percent duty or Ksh200 ($1.55) per square metre on imported ceramic paving or tiles as part of a list of goods and services subject to new duties under the Tax Laws (Amendment) 2024 that came into effect in January. The EAC Secretariat said that a related issue had been raised by Tanzania in December 2024. AdjustmentsIt was noted that the matter was reported during the Regional Monitoring Committee and also during the Sectoral Committee on Trade held in May where Kenya promised policy adjustments to the national budget for the financial year 2025/2026. Kenya added that consultations were on, and an update would be provided during the 47th SCTIFI meeting but argued partner states have excise duty which does not conform to the provision of Article 15 of the Protocol establishing the EAC Customs Union. The meeting noted that many partner states have imposed excise duty on goods produced within the community which does not conform with the provisions of the EAC Customs Union. EAC Sectoral Council on Trade, Industry, Finance and Investment (SCTIFI) directed the EAC Secretariat to compile a list of all goods for which excise duty has been imposed contrary to Article 15 of the Protocol establishing the EAC Customs Union and convene an Extraordinary meeting of the EAC Sectoral Council on Finance and Economic Affairs to deliberate on the matter by end of July. © Copyright 2022 Nation Media Group. All Rights Reserved. Provided by SyndiGate Media Inc. (
Business Insider
28-04-2025
- Business
- Business Insider
Financial crisis looms in East African Community as member states owe $58 million
As of March 2025, the East African Community Secretariat revealed that member states collectively owe a staggering $58 million in contributions, setting off a string of challenges for the bloc. This followed a meeting of the EAC Council of Ministers in Arusha, Tanzania this week to address the financial crisis caused by a shortage of funds for programs and staff salaries, which is threatening operations at the Secretariat. The meeting highlighted the cash shortfall as a top agenda item, alongside security concerns. This significant shortfall in funding has put essential programs and staff salaries at risk, threatening to halt operations across the bloc. Zawya reports that the growing debt and the lack of consistent budget remittances from partner states have put the future stability of the EAC in jeopardy. The EAC The East African Community (EAC) is a regional intergovernmental organization comprising six member states: Kenya, Uganda, Tanzania, Rwanda, Burundi, and South Sudan. Founded in 1967, the EAC aims to promote economic integration, peace, and stability within East Africa. It seeks to foster cooperation in various sectors, including trade, infrastructure development, and security. The EAC operates through various institutions and organs, including the Council of Ministers, the East African Court of Justice, and the EAC Secretariat, which is based in Arusha, Tanzania. The organization has made significant strides toward creating a common market and political federation but faces challenges related to financial constraints and member states' commitment. East African states see cash crunch As of March 2025, EAC member states owed $58,048,678 to the bloc, with only Kenya and Tanzania fully paying their contributions. Uganda has paid 99% of its due amount. The ongoing defaults have forced the EAC Secretariat, led by Veronica Nduva, to scale back operations. The East African Legislative Assembly (EALA) has skipped sittings, and the East African Court of Justice (EACJ) faces a backlog of over 260 cases, worsened by a lack of permanent judges. The Secretariat is also dealing with a staffing crisis, with 150 vacancies and 30 senior staff set to leave by the end of the financial year.
Zawya
16-04-2025
- Business
- Zawya
East African Community (EAC) Regional Leather Platform Meeting held in Kampala to Unlock Leather Sector Potential
The East African Community (EAC) Secretariat convened an EAC Regional Leather Platform Meeting from 3–5 April 2025 in Uganda. The meeting was held with support of the East African Business Council (EABC), and the International Trade Centre (ITC) through the EU-funded EU-EAC Market Access Upgrade Programme (MARKUP II). This hybrid event aimed to accelerate the implementation of the EAC Leather and Leather Products Strategy 2020-2030 and identify key priority interventions for 2026-2027. The meeting brought together representatives from Partner States, national leather apex bodies, private sector stakeholders, and development partners to address barriers and define priority initiatives for the region's leather industry. With growing regional demand for leather products, discussions centered on transforming the sector by scaling up domestic production capabilities, boosting value-added production, expanding market opportunities, and driving sustainable industrialization. The leather sector in East Africa holds important market potential for manufacturers, driven by abundant raw materials in the EAC, which accounts for 4% of the world's cattle and 6% of small ruminants. However, despite the region's abundant resources, there remains untapped potential to enhance value addition, particularly in transforming hides and skins into higher-value products such as wet blue, finished leather, and leather goods. Key challenges, including access to quality hides, limited industrial infrastructure, and high production costs, hinder progress. Addressing these barriers presents a significant opportunity to strengthen African sourcing, boost local manufacturing, and position the continent as a competitive player in the global leather market. Public and private stakeholders should work together to enhance quality, invest in processing facilities, and drive sustainable growth in this promising sector. The meeting opened with remarks from key officials, underscoring the sector's promise and bold interventions. The Chairperson of the Leather Platform for this year (Kenya Representative) Mr. Jimmy Odhiambo from Ministry of Investments, Trade and Industry emphasized that 'the leather sector is a vital economic driver, and through the Leather Platform, we're uniting the industry to push for quality and policy harmonization to compete globally.' Mr. Jean Baptiste Havugimana, Director of Productive Sectors at the EAC Secretariat, declared that 'The leather industry has deep historical roots in East Africa, yet despite a vast supply of raw materials from over 500 million livestock, the sector faces persistent challenges, including low value addition, limited processing, and inadequate infrastructure. The EAC Secretariat is committed to tackling these issues through regional strategies focused on value addition, technology, and market access. Public-Private Partnerships (PPPs) will be key in driving infrastructure development and fostering innovation, alongside greater investment in research and collaboration to enhance the global competitiveness of East African leather products.' Mr. Simon Kaheru, Vice Chairperson of EABC, asserted that "The leather sector holds immense potential, with the opportunity to create 500,000 direct jobs and generate $1.5 billion in annual export revenue. Expanding market access for SMEs, promoting locally made leather goods, and mobilizing investments are critical to driving sectoral transformation. EABC remains committed to supporting the Leather and Leather Products Platform to turn this potential into tangible economic benefits for East Africans.' The meeting reinforced key priorities to transform the EAC leather sector: improving quality of hides and skins, strengthening local manufacturing, attracting investments, and building globally competitive industries. Aligning with ongoing regional efforts, the public-private EAC Regional Leather Platform will amplify the industry's voice, harmonize policies, and drive investment into processing and manufacturing—meeting growing demand for quality leather goods and footwear. These efforts are part of EAC Leather and Leather Product Strategy implementation. As part of the meeting, participants visited a leather production site, a Ugandan impact-driven fashion brand specializing in handcrafting stylish and customizable leather products, as well as the Department of Leather and Textile Technology at Kyambogo University to gain practical insights into local innovations, training, and value addition efforts. Distributed by APO Group on behalf of International Trade Centre.
Zawya
02-04-2025
- Business
- Zawya
Tanzania leads as top source of FDI into Kenya in East Africa
Tanzania is the largest source of foreign direct investment (FDI) to Kenya among member states of the East African community (EAC). Investors from Dodoma have pumped in a total of $72.45 million in Nairobi in the last six years highlighting the growing appeal of the Kenyan economy to regional and foreign investors despite continuous trade dispute with Tanzania over non-tariff barriers (NTBs). Latest data by the EAC Secretariat shows that Dodoma has been the top most investor in Kenya in the period running from 2018 to 2023 with a total of $72.45 million invested in 19 projects, followed by Uganda and Rwanda which invested $36.91 million and $3.69 million respectively. According to the data that is contained in the EAC trade and investment report (2023) Burundi and the Democratic Republic of Congo (DRC) invested $2.01 million and $250,000 in Kenya respectively during the period under review while South Sudan invested $190,000. Read: Moderna, Taifa Gas deals lift Kenya's FDIThe major investors in Kenya however came from the rest of the world putting a massive $3.75 billion into the Kenyan economy during the period. Investors are mainly interested in putting money in key sectors including manufacturing, transport, communication and storage, finance and insurance. Other sectors were real estate and business services, agriculture, fishing, forestry and hunting, wholesale, retail trade and tourism and construction. Overall intra EAC planned investments declined by 5.6 percent to $567.17 million in 2023 from $600.78 million in 2022 with the number of projects also decreasing to 72 from 76 in the same period, according to the report. Uganda attracted the most intra-EAC investments worth $280.74 million though it was a drop from $391 million in 2022, followed by Burundi ($155.18 million). Burundi intra-EAC investments projects increased from two to four while their value rose from $1.9 million in 2022 to $155.18 million in 2023. Rwanda's intra-EAC Investment inflows jumped to $55.16 million from $46.78 million and the number of projects rose to 18 from 15. The report shows that Kenya's intra-EAC investment fell to $1.32 million in 2023 from $22.6 million in 2022 while that of Tanzania declined to $74.77 million from $138.5 million in the same period. Despite growing interest of Tanzanian investors in the Kenyan economy the two countries are still embroiled in on-and-off trade disputes over non-tariff barriers (NTBs) that are stifling business between them. Last year (2024) the two countries resolved to address at least 14 NTBs following a, meeting between President William Ruto and his Tanzanian counterpart Samia Suluhu in 2023. The meeting considered 14 issues six from Tanzania and eight from Kenya and provided direction for their resolution. However of the 14 only three were fully resolved. Tanzania continues to deny Kenya import permit for poultry and poultry products including day-old chicks, hatching eggs and meat. Last week Dodoma hit Nairobi with fresh protectionist levies on eggs, dairy and meat as well as confectionery such as biscuits upsetting the EAC customs unions rule and cutting export earnings. The fresh tariff war threatens to reopen another round of on-and-off frosty trade ties between the two countries. The Kenya Association of Manufacturers (KAM) said Dodoma has slapped a 25 percent excise duty on exports of hatching eggs to Kenya contrary to the spirit of the EAC Customs union. Kenya and Tanzania have largely been involved in persistent trade wars over tariff and non- tariff barriers to trade prompting intervention by respective ministries and sometimes Heads of State. Despite tiffs over trade barriers data shows Tanzanian investors still consider Nairobi a worthwhile destination. Read: Ruto launches building of $130.5m LPG plant in MombasaSeveral business tycoons from Dodoma have made massive investments in Kenya, some through acquisitions of Kenyan companies. Among notable Tanzanian investors in Kenya include Rostam Aziz who through his Taifa Gas is building a multimillion dollar 30,000 tonne cooking gas plant and storage facilities in Mombasa worth Ksh16.9 billion ($131 million) and Ally Awadh who is also building a similar but smaller facility at 10,000 tonnes. Mr Awadh is the founder of Tanzania's Lake Oil that acquired the Petroleum retail division of Kenya's Hashi Energy for undisclosed fee in 2017. The family of Tanzanian business tycoon Abdallah Nahdi through Amsons Group has also successfully acquired Bamburi cement at deal estimated at $180 million. In 2017, Tanzanian investors Aunali and Sajjad Rajabali bought 30.2 million shares equivalent to a 2.06 percent stake in oil marketer Kenokobil rising to the list of the oil marketers top shareholders. In 2016 Tanzanian Bank M became the first lender from the neighbouring country to take over a Kenyan institution when it acquired a 51 percent stake in Oriental commercial bank. © Copyright 2022 Nation Media Group. All Rights Reserved. Provided by SyndiGate Media Inc. (
