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The East African : July 7th 2014
The EastAfrican OUTLOOK JULY 5-11,2014 REGIONAL MARKETING PLATFORM EA commodity exchange links farmers, markets EAX platfo≥m will facilitate c≥oss-bo≥de≥ t≥ading of commodities within the ≥egion by p≥oviding a cent≥al ma≥ketplace BY KABONA ESIARA Special Correspondent producers of other goods to agricultural and financial markets, was launched in Kigali last week, creating fresh opportunities for regional trade. The East Africa Exchange (EAX), E which is privately funded, will help producers to secure competitive prices for their goods, as well as facilitate access to funding opportunities. It is wholly owned by Africa Exchange Holdings Ltd (AFEX), whose shareholders include Tony O. Elumelu of Heirs Holdings, Nicolas Berggruen of Berggruen Holdings, Dr Jendayi Frazer of 50 Ventures and Rwandan investment company Ngali Holdings. It launched operations in Janu- ary last year and has mainly traded in maize and beans. The plan is to increase traded items to include coffee, tea, cereals, as well as minerals. In November last year, the exchange conducted its first regional trade auction, selling 50 metric tonnes of maize from Kampala-based Savannah Commodities Ltd ex-warehouse at $398 each to Ladislas Mwitende from Top Services Enterprises Ltd of Rwanda, which operates in the Musanze area in Northern Province. Dr Frazer, who is a former US assistant secretary of state for African Affairs, said the EAX platform would facilitate cross-border trading of commodities within the region by providing a central marketplace and connecting buyers and ast Africa’s first commodities exchange, linking farmers and sellers throughout the region. “To be a true regional exchange, we are also opening up for regional investors so we can become East-African owned.” Plans are also underway to set up centres in Uganda and Kenya to extend the market’s operations, and to also test the South Sudan and Tanzanian markets, she added. Mr Elumelu emphasised the need for Africa to move towards greater self-sufficiency with private investment and strategic partnerships: “The EAX showcases our desire to identify far reaching investment opportunities, while ensuring that most of the value-adding aspects of Africa’s resource wealth stays on our continent,” he said. Mr Berggruen said the Exchange was “complementing the East African Community’s goal of regional economic integration, and putting in place a world-class exchange to create a globally competitive market for Africa’s commodities”. Products for sale on the Exchange are graded for quality, with Rwanda Bureau of Standards being the key HOW IT WORKS Once a farmer or producer of other goods delivers their produce to the warehouse, they are issued with an electronic receipt, indicating the monetary value of the produce. They can either trade in the receipt for cash at the exchange or use it as collateral to obtain a loan from a financial institution. Workers unload maize at a depot. The East Africa Exchange EAX will help producers to secure competitive prices for their goods. Picture: File standards enforcer. Analysts say the commodity ex- change will not only help regional farmers to eliminate post-harvest losses, but also improve the liquidity levels in the economy. It will also encourage a steady supply of quality raw material needed to trigger industrialisation. “The commodity exchange is suit- able for agriculture transformation. There is no country that has de- veloped without transforming agriculture. With farmers paid more for their produce, they are encouraged to grow more,” said Alex Ruzibukira, the director general in charge of in- dustry and SMEs at Rwanda’s Ministry of Trade and Industry. As part of ensuring quality and reducing post-harvest losses, the EAX runs several warehouses in Rwanda and has contracted Collateral Management International to support farmers. During the 6th Northern Corri- dor Integration Meeting that took place in Kigali, Rwanda was asked to make a business proposal for joint investment in EAX for consideration. The partner states have also agreed to exchange legal texts on commodities and warehouse receipt systems and standards by July 15. 33 EA states set August deadline fo≥ secu≥ity pact By KABONA ESIARA Special Correspondent Kenya, Uganda and Rwanda have committed themselves to ratify the Defence and Security Protocol aimed at fighting terrorism and improving security in the region. The protocol will be ratified in August, a recent meeting of defence chiefs held in Kigali concluded. East African Community Sec- retary-General Richard Sezibera also appealed to the three countries to expedite the process, in view of the increasing terrorist attacks in the region, especially in Kenya. Uganda and Rwanda have al- so been on high alert following warnings by Western countries that Al Shabaab militants were planning more attacks in the region, targeting supporters of African Union Mission to Somalia (Amisom). The region is also experienc- ing increased cases of poaching, drug trafficking, money laundering and other high level crimes that need to be urgently tackled. The three states signed a pact on the establishment of the Mutual Defence, Peace and Security Protocol on January 8 in Kigali, but only Rwanda has ratified the treaty. But Rwanda Defence Minis- ter James Kabarebe is optimistic, noting that the ratification of the protocol depends on the countries’ parliaments. “Other countries will not go beyond the August deadline agreed upon in the ministers’ meeting to ratify the protocol,” said Gen Kabarebe. Ugandan State Minister for Justice Kahinda Otafiire said it was in the interest of the region to jointly tackle security matters. Ai≥ Uganda to ≥emain g≥ounded fo≥ one month pending audit By JULIUS BARIGABA The EastAfrican AIR UGANDA will remain grounded for at least one month after independent aviation experts ordered a fresh safety audit before it resumes operations. The five-phase audit will take 28 days, starting with a pre-application, which the airline has so far negotiated. At the time of going to press, the carrier’s officials were in the process of submitting the application to complete the second phase. The next phases of the audit will evaluate the airline’s application and the company’s implementation of safety measures by testing the crew and aircraft. The EastAfrican has learnt that the independent audit team has dismissed earlier reviews by Uganda’s Civil Aviation Authority that led to the withdrawal of Air Uganda’s air operator’s certificate on June 17, along with those of two other operators — the Ministry of Defence-owned Uganda Air Cargo Corporation and private airline Transafrik Uganda Ltd. The five-man audit team comprises three lead consultants — two aviation ex- perts from the Kenya Civil Aviation Authority and one from the Civil Aviation Safety and Security Oversight Agency of the East African Community. The other two are CAA officials acting as observers. The grounding of Air Uganda, which oper- ated eight routes — Entebbe to Juba, Nairobi, Mombasa, Dar es Salaam, Kilimanjaro, Kiga- li, Bujumbura and Mogadishu, carrying up to 6,400 passengers per week — means travellers around the region must brace themselves for tough times. Barely two weeks after Air Uganda was suspended, the air fares more than doubled on some routes as competitors took advantage of the crisis. Industry regulator Civil Aviation Authority suspended the three airlines after a review of their systems, structures and operations by the International Civil Aviation Organisation (ICAO). But, upon summoning and querying CAA officials last week, the parliamentary Infrastructure Committee of parliament, which has an oversight mandate on the transport sector, concluded that the regulator had “lied and used the weaknesses of the three airlines” to cover up it own failures.
June 30th 2014
July 14th 2014