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The East African : Feb 25th 2017
FEBRUARY 25 - MARCH 3, 2017 The EastAfrican GOOD NEWS FOR LOCAL MANUFACTURERS Edible oils now listed as ‘sensitive’ Impo≥t duty to ≥ise f≥om 30 to 40 pe≥ cent ove≥ the next th≥ee yea≥s By CHRISTABEL LIGAMI Special Correspondent M anufacturers of edible oils in the EAC have been shielded from competition from other countries. Regional trade ministers have included edible oils manufactured in the EAC on the list of sensitive products, paving the way to increase the import duty levied on them. “The refined edible oils manufactured from locally sourced raw materials now qualify for preferential tariff treatment, and thus should be accorded preferential treatment when transferred to other partner states,” the EAC Sectoral Council on Trade, Industry, Finance and Investment said. The import duty will be increased gradually over three years, to allow partner states to develop the capacity to meet the demand for raw materials. In 2017-2018, the rate will go up to 30 per cent, in 2018-2019 to 35 per cent, and up to 40 per cent in 2019-2020. The decision follows recommendations by experts from the EAC partner states, who carried out a verification exercise from October 31 to NEWS THE INTEGRATION TRACKER Monitoring the progress of the East African Community Positive developments Negative developments Neutral Kigali to host second EAC high-level manufacturing business summit and exhibition The second high-level East African manufacturing business summit and exhibition (EAMBS) organised by the East African Community is scheduled to take place from 23 to 25 May in Kigali. The Bidco factory in Kenya. Local manufacturers of edible oils will be shielded from foreign competition. Picture: File Refined edible oils manufactured from locally sourced raw materials qualify for preferential tariff treatment.” EAC Council on Trade November 6, 2016 in Uganda, Kenya and Tanzania, to establish how much oil was being imported within and outside the region from 2011 to 2015. The manufacturers that were covered by the study included A.K Oils & Fats Uganda Ltd, Nile Agro Industries, Oil Palm Uganda Ltd a subsidiary of Bidco Uganda, Kapa Oil Refineries Ltd in Kenya, and East Coast Oils and Fats Ltd of Tanzania. Findings The experts found that the number of oil manufacturers in the region is increasing, and that existing manufacturers are expanding their factories, with a total investment of Bu≥undi, Como≥os apply fo≥ membe≥ship to SADC BY CHABI BARASA The EastAfrican BURUNDI could join Tanzania as a member of the Southern African Development Community, a move that complicates the direction the East Africa Community takes for the remaining phases of integration. Burundi has applied alongside the Union of Comoros for membership in the 15-country regional grouping headquartered in Gaborone, Botswana. The applications were to be as- sessed first by the Inter-State Politics and Diplomacy Committee of SADC’s Organ on Politics, Defence and Security Co-operation which convened in Dar es Salaam on February 24. “This meeting has been tasked to assess the eligibility of both states to join SADC before advising our heads of state accordingly,” said Tanzania’s Foreign Affairs and East African Co-operation Minister Augustine Mahiga He added that the two countries’ applications would be decided by the organisation’s heads of states at a later date. Ever since President Pierre Nku- runziza pushed through his third term in office, Burundi has appeared reluctant on EAC matters, boycotting East African Legislative Assembly meetings over its differences with Rwanda and sitting out of the EAC-led Intra-Burundi Dialogue over the involvement of political rivals. Bujumbura and Dar are also opposed to an economic partnership approximately $550 million. Manufacturers import crude palm oil from Malaysia and Indonesia because the local supply cannot meet the demand. Other manufacturers source crude sunflower oil from Ukraine and Argentina. Under the current Common External Tariff regime, palm oil is imported as a finished product and subjected to a duty of 25 per cent. Under the current rules of origin, only goods produced wholly from local inputs are allowed to cross national borders without attracting Customs taxes. The EAC member countries agreement between the EAC and the EU that Kenya and Rwanda have signed as Uganda tries to reconcile the positions. SADC and EAC, however, have joined hands with Comesa in a Grand Free Trade Area launched last year. Mr Mahiga said the expulsion by Mozambique of 200 Tanzanians and other foreigners was also to feature during the meeting. “We have been informed some of those expelled were involved in criminal activities such as the drugs trade,” said Mr Mahiga. He dismissed claims that the Tanzanians were targeted in the crackdown but added that Tanzania will continue to investigate how its nationals were treated before being deported, amid claims that some of them were beaten up. The crackdown was conducted in This meeting has been tasked to assess the eligibility of both states to join SADC.” Augustine Mahiga, Foreign Affairs and East African Co-operation Minister the district of Monte Puez in Cabo Delgado Province, where more than 3,000 Tanzanians live. Ministry of Home Affairs Perma- nent Secretary Maj-Gen Project Rwegasira said last week the government sought to verify claims of abuse, including allegations that the passports of some deportees were seized and torn up. REVIEW Currently, the EAC Secretariat is undertaking a comprehensive review of the Common External Tariff and rules of origin to establish the level of production of various goods, and the rates to be applied as was directed by the council of ministers last year. The review is expected to be completed in one year. were concerned that regional manufacturers were losing out by paying 25 per cent duty on some imported products, which should have ordinarily attracted zero per cent or 10 per cent duty. The three-day conference, under the theme “Harnessing the Manufacturing Potential for Sustainable Economic Growth,” will bring together top executives in the manufacturing and agri-business sectors, policy and decision-makers, as well as key financial institutions from Africa and the rest of the world, to explore opportunities for investment in manufacturing and agri-business in the region. The EAMBS will include an exhibition where investors, enterprises, researchers and academia will showcase new products and services, as well as exhibit the latest advances in manufacturing technology and innovation, particularly those with relevance to small and medium enterprises. The official opening is expected to be presided over by the President of Rwanda, Paul Kagame. 3 Govt p≥obes Da≥ fi≥m ove≥ ‘e≥≥oneous’ labelling By CHRISTOPHER KIDANKA The EastAfrican AFTER TENDERING an apology to the government over misleading branding of its products, the Minjingu Fertiliser Company is being probed over corporate management, tax compliance, standards compliance and fair competition in business. The EastAfrican has established that officers from the Tanzania Revenue Authority, the Business Registration and Licensing Authority, the Fair Competition Commission and the Tanzania Bureau of Standards camped at the company’s plant last week Sources in government said the four institutions will submit their findings to Prime Minister Kassim Majaliwa, after which the whole matter will be made public. Last week, it emerged that the company had labelled its products “County Government of Bungoma- Nafaka Plus,” purporting to show that they were packaged in Minjingu Mines and Fertiliser Ltd, KenBro Industrial Park, in Nairobia. Minjingu Phosphate director Tosky Hans told the prime minister that the labelling was a deliberate move aimed at checking counterfeits in export markets. But Bungoma Governor Ken Lusaka denied buying fertiliser directly from Tanzania. A trade expert, Faraja Mgwabati, says the Minjingu plant may have violated rules of fair competition, labelling goods as coming from a country when it was not so. “The principle demands that a client should get exactly what he has been promised. If a commodity is made in country A under licence from a company in country B it should be said so,” he said. East African Common Market Protocol is silent on this as it insists on free trade with free movement of goods.
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Mar 4rth 2017