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The East African : Jun 14th 2015
12 EA BUDGETS 2015-2016 Construction of the standard gauge railway in progress at Tsavo River Super Bridge in Voi, Taita Taveta County, Kenya. Picture: File The EastAfrican NEWS JUNE 13-19,2015 EAC govts banking on e-comme≥ce fo≥ se≥vice By SCOLA KAMAU Special Correspondent THE EAST Africa Community governments are using technology to promote e-commerce and take services closer to citizens. Kenya has allocated Ksh2.5 billion ($25.7 million) towards increasing the one-stop shop Huduma Centres and Ksh1.9 billion ($19.5 million) for the continued rollout of Integrated Financial Management Information Systems. Rwanda and Kenya will pro- Rwanda’s new levy on goods from outside the EAC to fund projects P≥io≥ity will be given to const≥uction of the standa≥d gauge ≥ailway By BERNA NAMATA The EastAfrican R wanda will impose a new levy on goods imported from outside the EAC to raise funds for regional infrastructure projects. The 1.5 per cent charge on all imports into the EAC, referred to as the infrastructure levy, was agreed on by finance ministers from member states during pre-budget consultations held in Nairobi in last year. Uganda and Kenya are al- The reduction and optimisation of construction costs is essential to reduce the burden on governments.” Neside Tas Anvaripour, business and development director of Africa50 ready charging the levy; Tanzania and Burundi requested for time to consult before releasing a timeframe for implementing the levy. Rwanda is targeting to col- lect Rwf10.6 billion ($15 million) from the levy in the new financial year, although it will continue to collect the fees in the coming years mainly for regional projects including the central corridor. Although the funds will be devoted to regional infrastructure projects agreed on under the Northern corridor initiative, priority will be given to the standard gauge railway (SGR) project. Completion of the railway is expected to significantly reduce the cost of freight and doing business within the region, particularly for landlocked countries. Other regional projects to be funded include energy networking infrastructure such as electricity grids and oil pipelines. “This (SGR) is one of the projects that is being prioritised,” Rwanda Finance Minister Claver Gatetetold The EastAfrican. The country needs Rwf1.2 billion ($1.7 million) to finance the Gatuna-Kigali segment of the 2,000-km SGR to connect Rwanda and Uganda to the Kenyan port of Mombasa. Feasibility studies of the project are expected to be completed by the end of July. Mr Gatete said the country is considering external concessional loans to bridge the shortfall in financing for the other projects. “Our debt to GDP ratio is 26 per cent, and we still have room because our target is 50 per cent. “One of the sources is the China Exim Bank, which has given a signal that this is one of the areas that they would be interested in,” he said. Uganda and Rwanda have selected the firm China Civil Engineering Construction Corporation to build the Kampala–Kigali railway section. While China is expected to take the lead in financing the regional project, the region has signed a memorandum of understanding with African Development Bank (AfDB) through its Africa 50 Fund, which assists countries to mobilise private financing, for the project. African countries are cur- rently in the process of reviewing the first draft of the busi- PROJECT FINANCING Rwanda remains a net importer in the region. Imports value is expected to increase by 7 per cent in 2015. Capital and intermediate goods imports (infrastructure related) are expected to contribute a large share in 2015, for implementation of the delayed projects. In the fiscal year 2014/15, the trade deficit rose to $1.3 billion or 16 per cent of GDP, from ness proposal of SGR submitted by Africa50 Fund, the new infrastructure vehicle sponsored by the AfDB, which will be used to sell the project to private investors. Public private partnership Experts say the project should be structured as a public private partnership to lessen the burden on the budgets of these countries. The SGR is expected to be funded under the same arrangement. The scope of private sector participation, the project’s financing plan, and the amount of sovereign and non-sovereign investments are also currently under discussion. While the entire project needs at least $14 billion, AfDB experts have recommended the development of the railway line in coordination with new mining opportunities along the line, which they say can cover a substantial portion of the project’s construction costs. “The effective implementation of transport policies are also key. $537.5 million 2013. Africa50 is structured as a developmentally-oriented yet commercially operated entity. It will be complementary to and legally independent of existing development finance bodies in Africa. Accordingly, the operational decisions will be made by a management team selected solely on technical merit and demonstrated managerial competence The reduction and optimisation of construction costs is essential to reduce the burden on governments,” Neside Tas Anvaripour, the business and development director of Africa50, told The EastAfrican recently. In the fiscal year 2015/16, project loan drawdowns are estimated at Rwf111.8 billion ($157.5 million) slightly higher than the Rwf105.5 billion ($153.2 billion) disbursed in 2014/15. Large shares of this amount are expected to come from the World Bank, the African Development Bank, and the Arab Funds and will mainly be used for infrastructure projects in energy and road projects. However, there are exemp- tions on the levy — including goods that were made or tax exempted from within the EAC, fertilisers and seeds, live animals, and medicine and pharmaceutical products. It also includes goods such as medical equipment, mosquito nets, industrial machinery and equipment for energy and water sectors. President Uhuru Kenyatta at the launch of the Huduma Centre in Mombasa Pic: File mote e-learning through providing ICT learning devices to schools. Rwanda will continue with its One-Laptop-a-Child project while Kenya will be making a second attempt to provide laptops to primary school children. The government has allocated Ksh17.58 billion ($181 million) towards this initiative covering ICT learning devices, digital content, building capacity for teachers and the building of computer labs. Tanzania is also planning to have more learning equipment in place with the aim of promoting technology. The country is planning to take more e-services available to its citizens through Internet and mobile penetration. “Key challenges that the gov- ernment needs to overcome for successful implementation are access to electricity and Internet connectivity in remote areas and safety of the devices,” says a report by PwC on budget analysis. Over 400,000 Kenyans have registered on the e-Citizen Payment platform with over 8,000 transactions and with revenue collection averaging about Ksh10 million ($103,000) daily, the government further aims to digitise at least 100 inbound payment service transactions by end of 2015. In Uganda, the National Infor- mation Technology Authority is currently consolidating the hardware and software licences to accelerate delivery of government services. It is also connecting public universities to the national backbone infrastructure to enable access to high speed Internet connectivity and facilitate e-learning and technological research at a lower cost.
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