KAM calls for change of laws toreduce excessive drinking

Kenya needs to develop a more comprehensive policy if its fight against illicit alcohol is to succeed, according to a new analysis of the regulation of alcohol in the country by the Institute of Economic Affairs (IEA).

The policy recommendation is contained in a White Paper by the Institute of Economic Affairs and launched by the Kenya Association of Manufacturers during the summit on illicit trade.

Kwame Owino, the Institute’s Chief Executive said that their analysis had shown that the approach taken to regulate alcohol is population-based rather than targeted at reducing excessive drinking.

“Regulation of the alcohol beverage sector is through the Alcoholic Drinks Control Act, which by reducing the amount of time for drinking and limiting the advertising of alcohol, assumes that it solves the problem of heavy drinking. But that does not work and more people are pushed towards illicit alcohol. By suppressing one side, you go back to the other side. Our licensing model actually creates barriers to market entry,” said Mr Owino.

Direct interventions targeting individual drinkers

He said that a regulation model that involves direct interventions targeting individual drinkers and others aimed at specific alcohol-related problems such as drunk-driving are less likely to affect the non-problem drinker.

“Kenya’s alcohol policies should not be exclusive but should encompass a mixed approach involving Problem Directed Policies and Intervention Policies. They have been proven to work elsewhere,” said Mr Owino.

The White Paper was launched at a day-long summit on illicit trade in Kenya, with focus on the alcoholic beverages sector. A resolution paper will be developed from the submissions made at the summit and submitted to the Treasury.

IEA argued that Population Based Policies are easier to administer but are unlikely to be most successful in Kenya given the low per capita consumption of alcohol, demographic changes, dual market structure and expected income growth among Kenya’s working population.

Consumption of alcohol in Kenya stood at 3.4 litres of pure alcohol

Data from the World Health Organisation shows the per person consumption of alcohol in Kenya stood at 3.4 litres of pure alcohol in 2018, much less than the global average of 6.4 litres per person.

Of the 3.4 litres, says the WHO, 1.9 litres is recorded (legally recognized) while 1.5 litres is unrecorded (not officially recognized).

“The negative effect on the industry by illicit alcohol is too big to ignore, given the extent of loss in Kenya. We are not only concerned by the health risk to consumers; illicit alcohol trade denies formal players a level-playing ground and the economy billions of revenue over time. This paper provides some insight to a cross section of stakeholders on how to forge ahead to eliminate this danger,” said Eric Kiniti, the Secretary of Alcoholic Beverage Association of Kenya. The alcoholic beverages industry is a leading contributor to the Exchequer East African Breweries Limited, the leading player in the industry, estimated that it made tax contributions of up to Ksh. 42 billion in the fiscal year 2018.

The significance of the industry is amplified because the direct tax contribution represented 2.74% of all government revenues for the financial year 2017/18.

With the excess regulation that the recorded alcohol is subjected to, says IEA in the White Paper, more consumers are pushed towards the alcohol that is not officially recognised, and which bears risks for drinkers.

“In sum, excessive regulation can generate the unintended consequences of driving demand for alcoholic beverages in the informal sector and generate worse health outcomes owing to the production methods employed in the latter,” IEA says.

Wanyama Musiambo, the head of the Multi-Agency Taskforce on Enforcement of Standards has so far succeeded in clamping down on illicit products.

“We cannot say that we let people drink what they want yet the cardinal responsibility of the government is to protect Kenyans. If nothing else has been achieved, we have achieved public awareness and Kenyans know there is a problem of illicit trade,” said Mr Musiambo.

Mr Musiambo said the taskforce’s work is intelligence-led.

“Once we make a raid, we should, in a very accountable manner, be able to process and prosecute the case as we strengthen our borders to reduce the level of illicit products in this country,” said Mr Musiambo.

Githii Mburu, the commissioner for intelligence and strategic operations, said it is evident that a more comprehensive approach is needed if illicit products is to be dealt with.

“We have to have a more comprehensive approach so that we look at both the policies and the enforcement, and this is where this study comes in,” said Mr Mburu.

A friendlier tax regime

He said that with neighbouring countries having a friendlier tax regime, ethanol is cheaper there and thus the motivation by a lot of those who import it illegally to source it there.

The commissioner said there must be collaboration between the State and non-state actors for eradication of illicit alcohol to work.

“It should never be left to the government. It’s a partnership between the government and the private sector and we must work together for it to succeed,” said Mr Mburu.

Kenya Association of Manufacturers Chairman Sachen Gudka said companies are of the view that the issue of illicit products was bigger than initially thought.

“It is our view that a better informed regulatory and policy framework will be the bedrock with which the agencies tasked with enforcement will better carry out their mandates,” he added.

Also Read: This is what alcohol manufacturers in Kenya want

Why construction industry needs to embrace human resource management

Human resource has been described as the most essential resource in an organization since it is the human aspect that makes sure that all other resources work optimally (or not).

In the construction industry, the concept of human resource management is not as well defined and improved as in other mainstream and formal industries.

For every industry to grow there has to be continuous improvement of efficiency in resources usage. There has to be capacity building to empower all the stakeholders to be better and to do better.

Every construction site has labour, whether mechanized systems are employed or not and also regardless of the magnitude of mechanization. This therefore makes it necessary to direct enough attention and resources towards human resource management and development in construction.

How many times have you commissioned a site and you only know the contractor out of an average of 20 craftsmen in your premise? How many times have you thought of the fundi who helps the mason build your wall as a resource that could be improved through training and empowerment using fringe benefits such as insurance facilitation?

As a contractor, how many times do you think of your fundi as a resource that could benefit from  remunerations other than their daily wages?

Human resource management is a critical part of project management. A client who is building should be keen to know how well the resources are being utilized through-out the project. A contractor on site must be very hands on when considering the usage of resources in any individual project because this has a direct effect to the quality of his deliverables, his profit margins and eventually his reputation as contractor.

Imagine a contractor solution that comes in to help you conveniently manage your human resources on the job site; having the  proper knowledge of the people working on your projects, including their skills and skill level will increase a their capacity to function as a developer. Even as an independent Home Owner managing their own project, this knowledge brings then confidence in getting the right talent for every job. We live in the age where information is more powerful than anything!

There is no more need to imagine that solution. The iBUILD app  is here to revolutionize the human resource management aspect in the construction industry. It is a one stop shop where you have an elaborate and detailed list of all the fundis on your site, their skills, their reviews and recommendations from other contractors as proof of their capabilities. The iBUILD mobile app also allows you to digitize your day to day operations by running and managing timesheets. For every worker you hire through the iBUILD app, a timesheet is generated that helps you manage their working hours as it keeps records of the amounts due to each of them according to the hours worked. At the end of the day, it gives you a summary of who was on site and how long they worked and how much is due to them! iBUILD then provides the best tool of all- the ability to upload time sheets directly to the payment gateway and pay all of your workers through the iBUILD wallet. Straight from the contractor wallet into the worker wallets. And there is more! Workers can cash out of their wallets directly into their Mpesa accounts. Contractors will have a permanent record of who gets paid what amount, and who worked on which projects for how long. Workers are rated every time they are paid and contractors will never have to remember which workers performed well and which did not- it all becomes part of the permanent transaction history. Organized details, and historical knowledge all at your fingertips so that you minimize mistakes and continue to hire and manage the best talent for your projects.

What the App is able to achieve

You can even save your favorites for easy access to contact and hire them for new projects- all directly through the app.

As a Home Owner or developer, you are able to see the work profiles of all the people involved in your site. This puts the control back into your hands!

Marlowa Okwogo of Marvin Interiors Inc. is a company that specializes in interior installations and external façade finishes in Nairobi and Kisumu Counties. Marlowa has been using the new technology from iBUILD  to manage his fundis on site. He sent out a posting for some positions he needed urgently filled and within 6 hours he had a number of qualified applications. He was able to review and hire, all through the app. One worker in particular was named Charles. He has been managing these workers along with Charles through the timesheet on the app, as well as paying them and it has increased efficiency and accuracy and using the e-wallet in the app, the contractor no longer has to deal with all of that cash.

Mr. Marlowa was especially impressed by the convenience and the ability to keep better records. He can revisit these records in his project detail on the app at any point for referencing purposes. Charles, on the other hand appreciated the convenience of being able to get work to do right from the comfort of his home- without standing for hours on street corners. He is no longer just at home or roaming around. He has found consistent work and has started building his portfolio in the construction industry. He is now able to show tangible evidence through his profile on the app of the history of all his jobs and total hours he has worked and he has aa separate record of the payment dates and amounts he received.  This gives Charles the ability to qualify one day for a loan of his own and to help him to grow and scale his career in to the future!

The Kenyan development agenda requires that, as a country, we must be ready to improve our efficiency in all sectors. We must begin to add value to what we produce and what we build. The  iBUILD app is at the fore front to champion the ability of the construction industry to maximize efficiency and quality.  This improves production and scalability in the delivery of their products and services and it also improves the construction sector as a whole.  As acceptance for finance technology grows in the construction industry, so will the value that is ultimately delivered to customers in the form of increased production, greater choice, and lower prices due to increased efficiencies and better project management.

Read Also: Kenya mulls over new road construction method

Kenya airways in trouble as loss deepen to US$74 million

Fuel, personnel and cost of aircraft remain top drivers of the airline’s costs

Kenya’s national carrier-Kenya Airways has posted a Ksh7.558 billion (USD74.6 million ) net loss for the year ended December 2018, as higher operating costs continue to eat into its improving revenues.

The airline which has changed its reporting period (end year) from March 31 to December 31, had a Ksh6.418 billion (USD63.5 million) loss in the 9-month period between April 1, and Dec 31, 2017.

This is despite the airline’s growth in total revenue for the 12 months which increased to Ksh114.45 billion (USD1.13 billion), compared to Ksh80.79 billion (USD789.7 million) for the nine month period ended December 31, 2017.

According to the management, fuel, personnel and the cost of aircraft remain the top three drivers of the airline’s costs, contributing to about two thirds of total operating costs.

“Fuel price volatility remains a major challenge for airlines around the world, and Kenya Airways is no exception,” Chairman Michael Joseph said as the carrier released its results on Tuesday.

According to KQ’s management, the price of oil per barrel saw an upward trend from the beginning of the year before reducing in the last three months of the year.

“As a result we saw our fuel costs rise by 73.6 per cent from Ksh19 billion (USD187.8 million) incurred in the nine months period in 2017 to Ksh33 billion (USD362.2 million) in the full year ended December 2018. The total cost of fuel in the 12-month period of 2017 was Sh25.5 billion(USD252.1 million), a 30 per cent increase,” Joseph said.

Fleet ownership costs also increased to Ksh18.9 billion (USD 186.9 million) from a restated amount of Ksh12.5 billion (USD 123.6 million) incurred in the previous nine months.

“The 2018 results are not directly comparable with the 2017 results as it is a representation of 12 months against the nine months in 2017. Were the 2017 results to be annualized, there would have been improvement in the results for the year,” the management notes in its financial statement for the year under review.

KQ has been struggling with loses since 2015 when it reported a Ksh25.7 billion loss (USD254.1 million). Things worsened in 2016 when the airline sunk deeper into losses reporting a loss of Ksh26.2 billion (USD259 million).

READ:Kenya Airways posts a $38.7 million loss in 2018 half year results

The carrier has however been making strides in improving its revenue stream through a number of initiatives, including additional routes.

Last year, growth in passenger revenue boosted its total revenues from Ksh63.9 billion (USD631.7 million) in the previous nine month period of 2017 to Ksh88.7 billion (USD876.9 million) in the year ended December 31, 2018.

Passenger numbers were 4.84 million at close of December 2018, while the nine-month period ended December 2017 recorded 3.43 million passengers. The airline achieved a cabin factor of 77.6 per cent (12 months compared to 76.2 per cent in the nine months of 2017.

In addition to the growth in passenger revenues, revenue from cargo amounted to Ksh8.68 billion (USD85.8 million) for the year 2018 compared to Ksh5.7 billion (USD56.4 million)  in the nine months of 2017.

“Kenya Airways continues to focus on delivering the turnaround programme that we embarked on in 2016. In the last year ended December 31, 2018, the capital optimization programme dubbed ‘project safari’  was completed. We have also undertaken various actions to ensure financial and operating efficiency to enhance business sustainability,” Joseph said.

KQ hired Polish CEO Sebastian Mikosz in 2017 to help turnaround the loss making carrier.

READ:Polish CEO Mikosz taxiing Kenya airways back to profit runway

The carrier is hoping its new routes, including the long haul Nairobi-New York route which commenced in October last year, will help boost its revenues as it works on its turnaround strategy.

ALSO READ:History made: From Kenya to New York with KQ’s inaugural direct flight

“We are on the right direction to turn this airline around and make it once more the pride of Africa,” Joseph had said last year when the carrier narrowed its losses to Ksh4 billion(USD39.6 million)  in half year to June 2018.

 

 

 

 

After Israelis, Tanzania expects Chinese tourists

An uptick in diplomatic ties between Tanzania and Israel has started to bear socio-economic fruits, the Prime Minister Kassim Majaliwa said.

The premier who saw off 274 tourists on the Israeli Airlines plane at the Kilimanjaro International Airport (KIA) over the weekend, pleaded  with the visitors to serve as Tanzania`s ambassadors back home.

Over 1,000 tourists from Israel were since April 20, this year, in the northern tourism circuit to sample various attractions in Serengeti National Park and Ngorongoro Conservation Area.

The first group of the tourists left on Friday night, the second, which was seen off by the Premier, flew on Saturday afternoon, the third on Saturday evening and the last on Saturday night.

Majaliwa invited members of the business community from Israel to invest in the tourism sector in the natural-resource rich Tanzania. He further asked the Israelis to consider coming back to visit Rubondo, Katavi and Ruaha National Parks and Selous Game Reserve in the Southern Circuit as well as Zanzibar.

`We are flattered,` Majaliwa told Carmel  Shlomo, the Director of Another World, as he extended his gratitude to local and Israel tour operators for promoting Tanzania as number one tourist attraction in Africa.

Ten tour operating firms were involved in arranging the Israelis` safari to Serengeti and Ngorongoro Crater, namely Excellent Guides, Mauly Tours and Safaris, Matembezi, Leopard Tours and Safaris, African Queen Adventures and TAWISA from Tanzania and Another World, My Trip, Camel and Safari Company from Israel.

The Tanzania Tourist Board Director, Devotha Mdachi, said a similar group of tourists from Israel were scheduled to arrive in Tanzania by June 2019. `Also expected in May this year are over 300 tourists from China,` she said in an interview, adding that the board was arranging a trip of Israel journalists and tour operators to Tanzania later this year.

One of the Israeli tourists marveled at how the country is very good and its people excellent upon his arrival a week ago, but however observed that roads heading for Serengeti needed to be improved.

Dr. Hamis Kigwangalla, the Natural Resources and Tourism Minister said the government was reforming the tourism sector for it to offer quality services. Last year, the ministry unveiled its ambitious plan to invest over Tshs.300 billion ($130 million) in the untapped Southern circuit for the country to register 2.2 million tourist arrivals a year from the current 1.3 million.

Dr. Kigwangalla said the money would be spent on improving infrastructure, increasing tourist services and promoting the virgin destinations and its rich culture, cuisine and the people of Tanzania cemented renewal of its friendship with Israel when it opened its embassy in Ramat Gan in May 2018, over 20 years after ties between the two countries were re-established.

Tanzania had initially established diplomatic ties with Israel in 1963, but they were torn asunder in 1973, thanks to the intense Arab pressure.

Earnings from tourism, Tanzania`s main source of hard currency, jumped 7.13 per cent in 2018, as a result of increased arrivals of foreign visitors. Tourism revenues fetched Tshs5.5 trillion ($2.43 billion) during the period 2018, up from Tshs.5 trillion ($2.19 billion) in 2017. Tourist arrivals totaled 1.49 million in 2018, as opposed to 1.33 million in 2017.

Also read:Tanzania-China Direct Flights set to Boost Tourism

African aviation has potential to rake in $29 billion

It has been by AviaDev event, in conjunction with partners, MIDAS Aviation and Futureneers Advisors, that the estimated potential revenue from new African aviation routes could yield $29 billion in direct revenue.

This revenue, which is more than the individual GDP’s of 70% of the countries in Africa, could be realized if the largest airports in each African country are connected with one another. Currently, only 33.7% of this huge market is served, meaning that there is over $19 billion in untapped annual revenue.

Now in its fourth year, AviaDev, brings together airports, airlines, tourism bodies, and suppliers and customizes one-to-one meetings so that new partnerships and routes can be created. AviaDev’s managing director, Jon Howell, unveiled the event’s mission: to connect the largest airports in each African country with one another. He stated: “AviaDev aims to challenge the status quo through encouraging disruptive thinking. We believe our new mission crystallizes the opportunity that African aviation presents, and we look forward to driving the industry forward and measuring the progress made. We are encouraged by the drive on the continent towards partnership and collaboration”

Rebecca Rowland, Partner at Midas Aviation, who estimated the current aviation services said: “We’ve looked at how well-connected Africa is in terms of the flights between the largest airports in every country, which mostly means the capital cities. Only a third of these routes currently have regular air services. We know that connectivity is vital for economic growth and trade, so the potential is huge. As the visa regimes become more open and regulatory constraints looser, we should see many more of Africa’s capitals connected to each other and, with that, we’ll see more of the opportunities realized.”

Martin Jansen van Vuuren, founder of Futureneer Advisors, quantified the potential revenue from the new aviation routes. He indicated that the potential aviation growth could result in additional hotel growth, which will further add revenue to the destination.  He said: “Considering the anticipated increase in air connectivity, estimations on the number of room nights and expenditure per person can be made.  With this is mind, it is fair to say that anticipated investment of US$194 billion could be made in new and existing hotels across the continent in the coming years, further showcasing the untapped potential of Africa.”

Africa also has plans underway to establish a Single African Air Transport Market (SAATM) as was discussed at the recently concluded Second Ordinary Session of the African Union Specialised Technical Committee in Transport, Transcontinental and Interregional Infrastructure, Energy and Tourism in Cairo Egypt. The SAATM is aimed at promoting intra-regional connectivity between the capital cities of Africa by creating a single unified air transport market in Africa, as an impetus to the continent’s economic integration and growth agenda.

African Union (AU) member states that have subscribed to the solemn commitment of establishing SAATM  are: Benin, Burkina Faso, Botswana, Capo Verde, Central African Republic, Chad, Congo, Côte d’Ivoire, Egypt, Ethiopia, and Gabon. Others are Gambia, Ghana, Guinea, Kenya, Liberia, Mali, Mozambique, Niger, Nigeria, Rwanda, Sierra Leone, South Africa, Swaziland, Togo and Zimbabwe.

Read Also: Single air transport market for Africa in pipeline

Kenya’s steel makers lobby for zero rated fees to boost sector

Over 50 stakeholders in the steel sector have called upon the government to zero rate fees in a bid to boost the industry.

The stakeholders who converged for the first ever International Steel Forum in Kenya said that local steel industry is heavily dependent on imported raw materials.

The forum saw the stakeholders sourced from all over the world meet and focus on providing partnership opportunities to boost the sector’s competitiveness and developing frameworks of collaboration to better shape the future of the industry.

Speaking at the event, the Kenya Association of Manufacturers (KAM) Chair Mr Sachen Gudka noted that the local Steel sector has grown over the years, adding that the establishment of stronger partnerships with global investors, would be vital to attain the desired growth in the sector and the economy.

“The future of the sector looks at the development of Smart Infrastructure. Through data and employment of sustainable strategies the sector will spur the productivity of the country and the continent for the next generation.

We are at the juncture where our trade deficit continues to widen as a country, and the numbers in Steel are a clear demonstration of that. If we can forge stronger partnerships, with our global stakeholders finding opportunities to continually invest in Kenya, surely we can turn this around in a short amount of time,” said Mr Gudka.

He further stated that the realization of the targets set out under the Manufacturing and Affordable Housing pillars of the government’s Big 4 Agenda will require a significant input from the iron and steel sector, as it presents opportunities for growth.

According to data from the Ministry of Industrialisation, direct and indirect consumption of steel in Kenya is projected to increase as the country embarks on the development activities as envisioned in the Vision 2030.The major Vision 2030 projects include Lamu port development, railway and roads projects, housing, Industrial parks and the development of the special economic zones all of which utilize steel products. The Iron and Steel industry in Kenya forms about 13 percent of the manufacturing sector, which in turn contributes significantly to the GDP.

The local steel industry is heavily dependent on imported raw materials, as no local sources have been developed to date. The local deposits of iron ore and coal, which are the raw materials for the production of iron, that have been identified in several Locations in the country have not attracted commercial interest.

KAM Steel Sector Chair Mr Bobby Johnson highlighted that though the sector continues to grow, its full potential still remains unexploited, due to a variety of challenges including, high energy cost, Import Development Fees (IDF) and  Railway development levy (RDL) and illicit trade.

Zero Rating to improve sector competitiveness

“We have continued to lobby the government for Zero rating of IDF and RDL for all industry inputs to improve the sector’s competitiveness. In addition,  we are also keen on advocating for the development of clear procedures for smooth implementation of Buy Kenya, Build Kenya and local content – especially for large scale infrastructure projects with a high demand of steel.

If the Big 4 Agenda target to grow Manufacturing’s GDP contribution to 15% is to be met, we must address these challenges.  We remain resilient in engaging the government, with proposals to solve these issues, and anticipate that  favourable  changes shall be effected soon,” concluded Mr Johnson.

It is estimated that the country spends about 60 billion shillings (approximately 750 million US dollars per annum on importation of steel. This import bill can be reduced if high quality steel is produced locally. The development of the iron and steel sector has a spillover effect to other sectors of the economy and has the potential to create employment opportunities to Kenyans. A single steel plant of a capacity to produce 350,000 metric tons of steel per year can generate about 10,000 jobs not to mention the jobs created through other steel related activities.

Other production activities depend on imported hot rolled coils, used for re-rolling into cold rolled coils, which in
turn are processed into galvanized sheets, color coated sheets, bars, rods etc. In 2017, imports of iron and steel were 1.3 million tonnes valued at Sh83,580 million ($826.347 million). Iron and steel exports during the same year are estimated to have been 108,717 tonnes valued at Sh11,717 million ($115.754 million). The local deposits of iron ore and coal, which are the raw materials for the production of iron, have been identified in Kwale, Kitui and Tharaka Nithi but are yet to attract
commercial interest.

KAM is a Business Member Organization representing value-add companies and associate services in Kenya.  Its members’ significant contribution to the economy is estimated at a quarter of the country’s Gross Domestic Product. The Association provides an essential link for co-operation, dialogue and understanding with the Government and other key stakeholders by representing its members’ views and concerns through fact-based policy advocacy.

KAM promotes trade and investment, upholds standards, encourages the formulation, enactment and administration of sound policies that facilitate a competitive business environment and reduce the cost of doing business.

The Association houses the UN Global Compact Network Kenya chapter and its CEO – Ms. Phyllis Wakiaga is the network representative for the country.

Read Also: Kenyan manufacturers back government on recycling

AfCFTA timeline starts to count in July

That will be decided during the forthcoming African Union meeting slated to take place in the next three months, according to the officials who gathered in Arusha on Thursday 25th April, 2019.

The proposed African Continental Free Trade Area is not simply a `Free Trade Agreement` it is about establishing a unified continental market with 1.2 billion potential customers and where the private sector is the major engine to make it happen.

This was the tone from the discussions of the meeting held in Arusha about how the East African Private Sector including Small and Medium Enterprises (SMEs) could benefit from the African Continental Free Trading Area (AfCFTA)

The one-day meeting, organized jointly by the East African Business Council (EABC) and the United Nations Economic Commission for Africa (ECA), convened close to 40 key players from the region`s private sector. The office for Eastern Africa of ECA estimates large potential gains from the AfCFTA, including an increase in intra-African exports of Eastern Africa by nearly Tshs.2.3 trillion ($1 billion) and the job creation of 0.5 to 1.9 million.

`Together African economies have a collective GDP of $2.5 trillion, making it the eighth largest economy in the world. That makes the continent much more attractive to investment, both from within and from outside the continent, ` said Andrew Mold, acting Director of ECA in Eastern Africa. `This should encourage business people to take advantage of AfCFTA and make the investments necessary to sustain economic growth and create employment.`

Nick Nesbitt, Chairman of EABC, emphasized the importance of the continent having a clear vision to put an end to the fragmentation of the internal market. `I really applaud everybody who has been involved in creating the AfCFTA because their vision is the one of Pan-Africanism. It is something our founding fathers aspired for a long time. Our thanks to ECA for being at forefront of this conversation and pushing the agenda forward so that the continent becomes a single economic trading bloc, ` he said.

Kenneth Bagamuhunda, Director General of Customs and Trade at the East African Community Secretariat, cited the experience of Regional Economic Communities as the building blocks for the AfCFTA. `The AfCFTA should build on what has already been achieved in regional negotiations like the Tripartite Free Trade Area, as well as within our respective regional blocks,` he said. Bagamuhunda also highlighted governments need to set a conducive environment for the successful implementation of AfCFTA.

The AfCFTA was signed in March 2018, at a historic meeting of the African Union in Kigali. 52 of 55 African Union member states have so far signed the AfCFTA, 22 countries that have ratified the agreement, which was the minimum number for it to enter into force. It seeks to create the largest trade zone in the world, increase intra-African trade by 52% by the year 2022 and remove tariffs on 90% of goods.

A summary of AfCFTA’s progress

  • 52 countries have signed the AfCFTA agreement
  • 22 countries have ratified the agreement as of April 2,2019
  • 15 countries have deposited their instruments of AfCFTA ratification with the AU
  • 7 countries including Gambia have received parliamentary approval for ratification but are yet to deposit instruments with AU.
  • Eritrea, Nigeria and Benin are yet to sign the AfCFTA agreement
  • The AfCFTA Agreement will enter into force; 30 days after the required number of ratifications have been deposited with the AU.

Also read:Africa’s move to push for cheaper, faster trade

Israeli tourists hail Tanzania`s landscape

The serene rural Tanzanian landscape has wowed more than 1000 tourists from Israel who have just concluded their week-long tour of the country, leaving them planning for more future visits to explore the beauty of the country further.

The visitors from the Middle East have also expressed their admiration of the friendly attitude shown by the Tanzanians who they said were easy to make acquaintance with, noting that Israel stands a good chance of investing in cultural tourism.

The tour guide and leader of the group, Hagit Geffen stated they were surprised by the Tanzanians way of life as most of them seem to live in rural areas far away from towns and cities, and still the government manages to reach out to all these places, providing electricity, water and other essential services.

One of the tourists in the group observed that while back home in Israel people live in cities, towns or Kibbutz (a collective community in Israel that was traditionally based on agriculture) they are not as scattered as here. He also was surprised to see how people managed to get essential needs and basic services far away from cities and towns, yet he thought people must always live in big clusters in order to get services. He further stated that even the language in simple to master noting that in just a few days most of the tourists were able to learn Swahili words and could easily sing the song `Jambo Bwana, Habari Gani? ` citing that they were singing the song along their trips to Serengeti, Ngorongoro, Tarangire and Lake Manyara.

The tourists expressed their desire to return to Tanzania, but this time to really meet and understand the people of Tanzania whom they described to be warm, friendly, happy and peaceful.

A communications official for the Tanzania National Parks (TANAPA) described the arrival of more than 1000 tourists from the Middle East as a `typhoon` which has occurred during the off-season period in the northern circuit. The number of Israeli tourists visiting Tanzania rose to 36,640  in 2017, from 4,635 in 2012, according to data from the tourism board.

The Tourism Minister Dr. Hamis Kigwangalla said the marketing drive is paying dividends since the world is now turning to Tanzania as destination of choice when studying their global travel plans. In February this year, Tanzanian tourism experts attended the International Mediterranean Travel Market (IMTM) in Tel Aviv, Israel to promote the tourist attractions in the country.

The Zion tourists were seen off by the Prime Minister Kassim Majaliwa at the Kilimanjaro International Airport (KIA) over the weekend. The premier said their visit was among ongoing strategies to cultivate mutual cooperation between Jerusalem and Dar es Salaam.

The influx of Israel tourists to Tanzania comes after Israel opened its first visa processing centre in Dar es Salaam putting an end to necessitate people from Tanzania and Israel from traveling to Nairobi for visa related issues. The Tanzanian government also established an embassy in Israel in 2018 which was aimed at strengthening the ties that had been severed by the Arab pressure during the Yom Kippur war of 1973.

Also read: Germany, United Kingdom tourists dominate Tanzania tourism market

EAC to exploit the $1.2 billion continental market after AfCFTA ratification

Members of East Africa`s private sector including small and medium size enterprises are preparing to exploit the over Tshs.2.7 trillion ($1.2 billion) continental market after endorsement of African Continental Free Trade Area (AfCTA).

At their meeting in Arusha on Thursday 25th April,2019, members of East Africa Business Council (EABC) who teamed up with United Nations Economic Commission for Africa (ECA) said they foresee large potential gains from the AfCFTA, including an increase in intra-African exports of Eastern Africa by nearly Tshs.2.3 trillion ($1 billion) and job creation of 0.5 to 1.9 million

`Together African economies have a collective gross domestic product (GDP) of $2.5 trillion, making it the 8th largest economy in the world. That makes the continent much more attractive to investment, both from within and from outside the continent, ` said Andrew Mold, the acting Director of ECA in Eastern Africa.`This should encourage business people to take advantage of AfCFTA and make the investments necessary to sustain economic growth and create employment, ` Mold added.

EABC Chairman, Nick Nesbitt emphasized the importance of the continent having a clear vision to put an end to the fragmentation of the internal market. `I really applaud everybody who has been involved in creating the AfCFTA because their vision is the one of pan-Africanism,` Nesbitt said. `It is something our founding fathers aspired to. Our thanks to ECA for being at forefront of this conversation and pushing the agenda forward so that the continent becomes a single economic trading bloc, ` he added.

Speaking at the same gathering, Director General of Customs and Trade at the East African Community Secretariat, Kenneth Bagamuhunda cited the experience of regional economic communities as the building blocks for the AfCFTA.

`The AfCFTA should build on what has already been achieved in regional negotiations like the tripartite free trade area, as well as within our respective regional blocks, Bagamuhunda said. He also highlighted governments need to set a conducive environment for the successful implementation of AfCFTA.

The AfCFTA was signed in March 2018, at a historic meeting of the African Union in Kigali. 52 of 55 African Union member states have so far signed the AfCFTA (Eritrea, Nigeria and Benin are yet to sign the agreement) , 22 countries have ratified the agreement, which was the minimum number required for it to enter into force. Gambia`s parliament approved the AfCFTA on Tuesday 23rd April,2019, becoming the 22nd nation to do so, and effectively meeting the minimum threshold for the agreement to come into force.

The AfCFTA seeks to create the largest trade zone in the world, increase intra-African trade by 52% by the year 2022 and remove tariffs on 90% of goods.

Also read: Africa’s move to push for cheaper, faster trade

Russia leads CIS towards Islamic banking and finance

While considerably new, Islamic Banking and Finance has now taken firm roots in Russia and other Commonwealth Independent States (CIS) countries are following suit.

The total volume of Islamic Banking and Finance has now exceeded $2.6 trillion globally. This amount represents transactions, assets and investments by over 2,500 Islamic banking and financial institutions around the global.

In the modern era, Islamic banking and finance can be traced back to the 1960s from Egypt and Malaysia and its dramatic spread over the Middle East, Africa and Europe. Interestingly, while Islamic banking and finance was slow to take foot in Commonwealth Independent States (CIS) countries, its unprecedented growth over the last few years indicates that CIS countries are the emerging Islamic banking and finance market for the future.

Some well known CIS countries include Russia, Armenia, Kazakhstan, Uzbekistan, Tajikistan, Kyrgyzstan, Turkmenistan and Azerbaijan.

“The delay for Islamic finance initiative in CIS countries may count in many folds, it would be due to Russian influence in CIS countries,” suggests the Islamic Banking guru Mr. Muhammad Zubair Mughal who is the Global CEO of AlHuda Center of Islamic Banking and Economics.

https://theexchange.africa/zubair-mughal-wins-the-islamic-finance-recognition-award/

According to the seasoned banker, the mind set of Russian block and limited relations with International Banking and Financial Markets hampered development of Islamic Banking and Finance in CIS.

However, owing to what he described as ‘unstable Russian relationship with Europe’ and the sharp decline of oil prices has now compelled Russia to seek better financial alternatives, Islamic banking and finance.

Effectively, Russia has gone ahead and instituted friendly Islamic Banking policies and as a result geared-up Islamic banking and finance industry in CIS countries. This opens doors for enormous investment opportunities given that the Muslim population of CIS countries is estimated to be 75 million not to mention the non-muslim bankers that, like Russia, will opt for better banking options.

Russia also has a significant Muslim population and is with the recent government led initiative to support Islamic Finance it is expected that various Islamic banking and finance products will take root like Sukuk and Takaful.

Promoting Islamic Banking in CIS

AlHuda Centre of Islamic Banking and Economics (CIBE), a pioneer organization started its efforts to promote Islamic Banking and Finance is holding an Islamic banking and finance conference in Tashkent, Uzbekistan on 2nd May 2019.

The CIS Islamic Banking and Finance Forum will gather the CIS Islamic finance industry specialists and stakeholders on a single platform to promote Islamic banking and finance in the region.

In CIS countries, the Islamic banking and finance market can be divided into three parts. At first, there are countries such as Kazakhstan, Uzbekistan, Kyrgyzstan and Azerbaijan where the pace of Islamic banking and finance can be described as is satisfactory and where it is promoted and considered the sustainable financial alternative.

Secondly, there is the second group of countries, the likes of Tajikistan, Turkmenistan and Russia where the growth rate of Islamic banking and finance is rather slow. And the third group consists of countries in which there is no initiative taken so far, these are like Armenia, Ukraine and Belarus.

Kazakhstan leads the CIS in the growth of Islamic banking and finance. Started only in 1992, Islamic financing has grown drastically. More so, the growth can be noted following the global financial crises that started in 2008.

In Kazakhstan there is also considerable appropriate support of government institutions. Currently it has one full-fledged Islamic bank and 4 Islamic banking windows. They offer Takaful, Islamic leasing (Ijarah) and Islamic micro-financial institutions among other Islamic banking and Finance products.

Kazakhstan also launched an Islamic Agricultural Finance product with the financial assistance of the Islamic Development Bank. Further still, the recent establishment of the Astana International Financial Center (AIFC) places Kazakhstan as the regional center for Islamic Banking.

Azerbaijan comes after Kazakhstan but with much less government involvement. There is also no full-fledged Islamic bank in the country but there are at least 4 Islamic banking windows operating with limited Islamic Banking Regulations.

Uzbekistan follows and credit can be given directly to its new president H.E. Shavkat Mirziyoyev who has spearheaded the growth of Islamic Banking. Three Islamic banking windows are currently operational and accept deposits on Shariah bases.

Few Islamic leasing companies also offer Ijarah services, but it is predicted that after proper Islamic Banking and Finance regulations, Uzbekistan can supersede other CIS countries.

Neighbouring Kyrgyzstan also takes precedence its parliament passing the Islamic banking law in 2011 making it the only country in CIS to do so. In fact, there is at least one conventional bank that is in the process of becoming a full-fledged Islamic bank.

The most important factor of the growth of Islamic banking and finance industry in CIS countries is the Islamic Development Bank’s support.

https://theexchange.africa/emerging-trends-of-islamic-banking-and-finance-industry-in-cis-countries/