AGOA Waiver Extension Approved

AGOA

The World Trade Organisation’s Goods Council has approved a request from the US for the extension of the waiver of the Africa Growth and Opportunity Act (Agoa).

The waiver means that goods from African countries will continue to have free access to the US market and are exempt from the most favoured nation and non-discrimination provisions under the WTO’s General Agreement on Tariffs and Trade.

The US enacted legislation in June 2015 extending the Agoa programme for 10 years, or until 30 September 2025.  The waiver will run until the expiry of the programme.

It is estimated that with the approval, trade under Agoa in the East African countries will bring in $100 million in new investment to the region, which will create about 10,000 jobs in the period through to 2019.

Read more: AGOA Waiver Extension Approved

African Union Warms Up for CFTA Negotiations

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As we approach the start of negotiations for the establishment of the Continental Free Trade Area (CFTA), the African Union (AU) held a series of three meetings on enhancing intra-African trade from the 23 to 27 November.

These meetings, organised with the Trade Law Center (Tralac) in Cape Town, South Africa, have examined the progress and prospects for regional integration in the context of the CFTA; the issue of modalities for services negotiations of the CFTA; as well as the monitoring of the implementation of the AU Action Plan for Boosting Intra African Trade (BIAT).

Adopted in 2012 by members of the AU at the 18th Ordinary Session of the Assembly of Heads of State and Government, the BIAT Action Plan aims to deepen African market integration and significantly increase the volume of trade that African countries undertake among themselves. The road map also envisages that the CFTA will be established by 2017, building upon and consolidating the regional free trade agreements of Regional Economic Communities (RECs).

One of the meetings held on 25 November specifically focused on the progress evaluation in regards to the implementation of the BIAT plan.

The meetings were attended by several departments of the AU Commission and representatives of regional economic communities (RECs) and some African member states.

Read more: African Union Warms Up for CFTA Negotiations

Nairobi Tops Africa in Financial Services

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Nairobi has been rated the top African city in access to formal financial services, catapulting it into the top 10 cities in economic growth potential.

According to the 2015 MasterCard African Cities Growth Index, Nairobi's index value rose from 37.2 in 2014 when it was ranked 19th, to 41.3 in 2015 which ranks the city in ninth position out of 74 African cities.

A 2013 survey by the Financial Sector Deepening Trust (FSD Kenya) showed that financial inclusion level in Kenya is 75 per cent, boosted by the growth of mobile money usage especially in the informal sector.

"Nairobi has the highest percentage of the population with a financial account, ranking higher than the South African cities," says MasterCard in the report.

Read more: Nairobi Tops Africa in Financial Services

Kenya's Exports to go Up By Sh10 billion

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Kenya's manufacturing sector is set to get a new growth stimulus when an Africa-wide trade pact that could provide access to a big market is implemented.

In June, African leaders signed a 26-nation pact — the Tripartite Free Trade Agreement (TFTA) — to create a common market covering half of the continent.

As the regional trade integration agenda is implemented, Kenya is expected to cash in on the combined GDP of over $1-trillion in the new bloc.

"The TFTA and the Continental Free Trade Area agreements provide an opportunity for Kenya to become a manufacturing hub for Africa and this needs to be harnessed," said Kenya Association of Manufacturers chief executive Phyllis Wakiaga.

According to the Oxford Business Group, Kenya's exports are projected to increase by over Sh10.2 billion ($100 million) following full implementation of the TFTA.

The initiative is expected to create a 26-member trade zone spanning from Egypt to South Africa, and creating a market of about 632 million people, equivalent to over half of the continent's population.

Read more: Kenya's Exports to go Up By Sh10 billion

Lake Turkana Wind Takes Charge of Marsabit Project

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Lake Turkana Wind Power Ltd will now directly oversee the building of the 310-megawatt wind farm in northern Kenya after taking over the role from its partner Aldwych International to cut red tape and speed up the power generation project.

The firm, which targets to inject the first 90 megawatts of wind power into the grid by next September, says the many administrative layers risked slowing the project, necessitating the takeover of the role from the UK-based firm.

Aldwych is the single largest investor in the Sh76 billion wind project with a 30.7 per cent stake.

"The role has reverted to Lake Turkana Wind Power Company to simplify administration of the project and meet targets," said Carlo Van Wageningen, a director of Lake Turkana Wind Power Ltd.

The change comes a month after Google bought a 12.5 per cent equity stake in the wind project, the largest in Africa, for Sh4 billion in October.

Read more: Lake Turkana Wind Takes Charge of Marsabit Project

Kenya Outlines Measures to Lift Fisheries Sector

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The Ministry of Agriculture has developed a raft of policy, regulatory and financing incentives to accelerate transformation of the fisheries sector that contributes 0.6 per cent to the country's Gross Domestic Product (GDP).

Speaking at an occasion to mark World Fisheries Day, Acting Cabinet Secretary for Agriculture, Adan Mohammed, said efforts to transform this sub-sector have gained steam to boost food security, exports and rural livelihoods.

The Government is committed to development of a robust fisheries sub-sector as a means to boost export earnings, achieve food and nutrition security and create employment," Mohamed said.

Kenya has one of the most vibrant fisheries sector in the region thanks to state incentives that promote investments in aquaculture. According to the ministry of agriculture, the country earned Sh4.6 billion ($45 million) from the export of 10,165 metric tonnes of fish in 2013. In 2014, Kenya's total fish production stood at 193,106 tonnes.

Read more: Kenya Outlines Measures to Lift Fisheries Sector

A Higher Score On Ease Of doing Business Is Good For SMEs

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The recently released "Doing Business 2016" report by the World Bank Group shows remarkable improvement in the overall business environment in Kenya. The country has improved in ranking by 21 positions from 129 to108 out of the 189 economies surveyed. It also edged closer to best practice by scoring 58 per cent from 53 per cent in terms of distance from frontier, which measures how close the ease of business is when best practice has a score of 100.

While there is room for further improvement, it is important to note that this was way above the average for the sub-Saharan region which ranked 143 and among the top 10 in Africa. Rwanda (62) was in the lead in Africa, followed by Botswana (72), South Africa (73), Tunisia (74), Morocco (75), Zambia (97) and Namibia (101).

The doing business report measures and tracks changes in regulations relating to 11 areas in the life cycle of a small and medium enterprise that are critical to its survival. The report then highlights how easy or difficult it is for a local entrepreneur to open and run the business while complying with the relevant regulations.

The improvement is good news for the many enterprises that find themselves choosing whether to comply or to survive, because they are unable to do both. With the important role that SMEs play in the economy, it is critical that regulations and ease of doing business continue to facilitate rather than hinder the survival and thriving of such businesses.

Read more: A Higher Score On Ease Of doing Business Is Good For SMEs

Tatu Industrial Park seeks more investors

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Tatu Industrial Park, the light factory area of Tatu City, broke ground on Tuesday on a 420-acre site with plans to target an additional 12 local and multinational companies by the first quarter of next year.

Founder and chief executive of Rendeavour, the majority shareholder in Tatu City, Mr Stephen Jennings, told the Nation that a dozen investors had already signed deals to locate their enterprises at the park, with an additional 12 showing significant interest.

"I think we will be 80 to 90 per cent sold out by the end of next year," said Mr Jennings.

He said global consumer goods giant Unilever and Kenyan companies Dormans, Kim-Fay and Maxam are among those that have announced plans to build new manufacturing plants at the park. Dormans had already started construction, he added.

"The Unilever site is 70 acres. It will be their biggest site investment in Africa," said Mr Jennings.

Read more: Tatu Industrial Park seeks more investors

Kenya Moves to Enhance Competitiveness in Issuance of Construction Permits

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Kenya has moved to remove bottlenecks surrounding issuance of construction permits that have been dragging the country down in global business competitiveness.

A special committee involving construction sector regulators and industry stakeholders will look into the nature of the permits issued in the construction sector and related challenges.

The team will then recommend whether the permits should be simplified or eliminated altogether going forward, depending on their relevance.

"The Acting Lands, Housing and Urban Development Cabinet Secretary Fred Matiang'i has formed a committee comprising the National Construction Authority (NCA) and other regulators as well as stakeholders in the sector to look at the issue.

"We have made a proposal to have a one-stop shop approach to the issue," NCA executive director Mr Daniel Manduku, told the Nation on Tuesday.

Read more: Kenya Moves to Enhance Competitiveness in Issuance of Construction Permits

Company law to be effected in stages, says AG

Githu Muigai

Attorney-General Githu Muigai has published regulations that bring parts of the company law into force.

The Companies (General) Regulations, 2015, will make sections of the law that are not in contention take full force by the end of the month.

Parts of the 760-page Act became applicable in November 6 and the new set of regulations is meant to enforce them.

"The Attorney-General has published the Regulations for the operationalization of phase I in a special issue of the Kenya Gazette and will come into force 14 days after the publication," reads a statement to newsrooms.

The Registrar of Companies has also prepared the Registrar's Rules, which prescribe the forms to be used under the Act.

Prof Muigai said the law had been staggered into phases to allow time for enough consultation on the new concepts under the regulation.

Read more: Company law to be effected in stages, says AG

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