East Africa: Improve Logistics and Create More Jobs in East Africa

As all the negative reports of sibling rivalry bedevils the East African Community (EAC) integration process , one cannot help but see the numerous opportunities that may be missed out if one concentrated on the positive news emanating from the region.

East Africa has the highest logistics costs in the world and a reduction of transport logistic costs would mean higher growth which would translate into more jobs for East Africans, this is according to the recent World Bank Business report.

To be sure , each of the countries are pushing either for faster integration or step by step processes for their own reasons which can either be called selfish or self serving.

Uganda’s Yoweri Museveni and Paul Kagame both have their own designs while Uhuru Kenyatta has the small matter of the ICC hanging around his neck like a milestone.

Tanzania is probably the only country that has been the more honest of the partner states because when any matter is brought before it, Tanzania scrutinises it with a fine tooth comb before going ahead. Let us call a spade a spade, the rest of East Africa says they are reciprocating on waving work permit fees, right?

What exactly are they saying? Does this mean that a Rwandan citizen can now work in Kenya without the need for a work permit? The answer to that question of course is no.

What the so called Coalition of the Willing seems to be sayings is that from January, next year, they shall abolish the need to pay a fee ranging anything between 900 to 3,000 US dollars that have been payable to date.

The requirements for a work permit is in place and the taste of the pudding is in the eating, let us wait and see whether Kenyans shall access work permits in Uganda and vice versa, easily, readily and without bureaucracy when they apply for them. When that time comes and there are results to show, we shall begin to believe.

In more positive news from the region, Tanzania has confirmed it’s commitments and rubbished any attempts either to be sidelined from the regional body arguing that “sibling rivalry were normal things in every family and that, only good things could come out of the on-going talks.”

This stance was taken by the Deputy Secretary General in charge of Finance and Administration, Dr Evans Bukuku during the launch of Logistics in Trade Innovation Fund (LIFT) that took place in Dar es Salaam this week. The funding agency that works in East Africa, Trade Mark East Africa, this week launched Lift amidst pomp and glory as the United Kingdom Minister for International Development, Justine Greening told the audience it was in the interest of East Africa to reduce the cost of logistic of trade.

In response to the compelling evidence that reducing transport costs is vital for its mission of growing prosperity through trade, TradeMark East Africa (TMEA) plans to enhance the efficiency of the logistics and transport industry in East Africa through innovation.

This will be delivered through a new instrument, the Logistics Innovation for Trade Fund (LIFT). LIFT’s impact will be to reduce transport time along the main transport corridors in East Africa and to contribute to TMEAs objective of reducing transport time along the main transport corridors by 15 per cent by 2016.

LIFT will contribute to a significant reduction in transport times in order to increase competitiveness for the trading community in East Africa.

It will: . Leverage substantial private sector investment into cutting-edge freight and other logistics technologies and business processes into East Africa; – Stimulate and accelerate further innovation and research of transformational innovation in logistics and – Create systems for tracking industry performance and efficiency.

The gap which LIFT aims to fill is therefore to reduce the risk of investment through a matching grant in transformative technologies or improved practice that will have a significant impact on the efficiency of the overall transport and logistics sector across East Africa.

Early adopters will demonstrate the advantage of improved service offers, reliable deliveries and lower cost to a wider set of companies. The Innovation in Trade Fund joins TRAC Funds again another innovation from Trademark, Africa Development Banks Trade Development Fund and Investment Climate Facility’s funding opportunity all as opportunities for businesses in the region and on the continent to access the much needed funds for development.

LIFT will achieve its objectives through the use of matching grants to private sector firms on a competitive basis. At least 50 per cent of the capital for LIFT projects will be contributed by the private sector itself. Grants will vary in size given the challenges a specific partnership will try to address, but typically grants will be upto US$500,000.