Countries in the East African Community have adopted new Common External Tariff (CET) import duty measures that seek to protect local industries from cheap imports. The new import taxes took effect on July 1, raising import duty for some products to shield domestic industries, while lowering import duty on critical inputs.
Currently, the CET stands at 25% for finished goods, 10% for intermediate products, and 0% for raw materials.
Categories of the import duty measures include the Duty Remission for Industrial Inputs, Stays of Applications, and Amendments of the East African Community Customs Management Act, 2004.
Under Duty remissions, local manufactures can import raw materials not available in the region at lower rates. According to the East African Business community CEO Dr. Peter Mathuki, this provision will only apply to gazetted manufacturers who will apply to import specific amounts of imports at lower rates.
“The duty remission measures adopted by the EAC Partner States will ensure that local manufacturers can import raw materials and inputs which are not available in the region at a lower rate,” Mathuki said in a Statement.
Stay of Application allows EAC partners to agree on a CET on the final product to stimulate local production. Countries can apply a higher rate than the CET on products like garments, leather shoes and belts, processed tea, coffee, cocoa, edible oil, iron sheets, and metal products to protect local production. In this case, Kenya will maintain an EAC CET 25% duty on margarine and edible mixtures for a year. However, the country will apply a 35% import duty for clothing apparel, both knitted and crocheted for a year as they are sensitive to the country. Most countries in the region have applied duty rates between 35% and 60%, showing a common need to protect industries, and therefore review the CET.
Noting that the EAC cannot manufacture everything, Stay of Application allows countries to set duties lower than the CET on products like mobile phones, wheat, and sugar.
Individual Country Import Duty Could Prevent Uniform Policy.
Nevertheless, Mathuki believes that different stays of application could prevent the region from developing a uniform policy governing imports into the region. Further, it will prevent products that benefit from a uniform EAC CET from accessing the area at a preferential tariff. Mathuki, therefore, recommends a review to fastrack a harmonized CET.
Equity Group Takes Over KSh2.1 Billion EA Cables Loan
Equity Group Holding has taken over KSh 2.1 billion East Africa cables loan. EA Cables 2018 financial report reveals a huge debt portfolio amounting to KSh3.55 billion owed to several lenders; Standard Chartered Bank Kenya $25.6 million, Standard Chartered Bank Tanzania $5.32 million, Ecobank Kenya $1.61 million, State Bank of Mauritius $2.85 million, and Credit Bank Kenya ltd $38,200.
The East African reports that Equity Group will refinance EA cables existing debt over a longer period thus reducing the monthly principal loan repayments. The transaction will allow EA cables to plow back cash flows into the business to return it to a strong financial footing.
Equity Bank will take over and restructure loans over a 10-year tenure. The gross loans acquired by Equity bank amounted to $20.46 million.
EA cables had delayed the release of the financial reports for the year ended 31 December 2019 citing debt restructuring negotiations. The savings from this transaction will be captured in the financial reports for the year 2019 expected to be released on July 31.
NSE appoints Kiprono Kittony as board chair following the resignation of Samuel Kimani
NAIROBI, Kenya, Jul 13 – Nairobi Securities Exchange has appointed Kiprono Kittony as the board chair effective immediately.
Kittony replaces Samuel Kimani who resigned on July 13 after serving as the chairman of the NSE board since 2012.
“After a thorough process, the board of directors has appointed Kittony as the next chairman of the NSE,” NSE announced.
“Kittony takes over from Samuel Kimani who stepped down as chair of board on July 13, 2020 after holding the position for four years, he remains on the board as an independent non-independent director for one more year,” reads NSE’s statement.
At the same time, NSE said Bob Karina will continue to serve as the Vice-Chairman of the Board for the next year.
In one of his social media accounts, Kittony thanked the board for having elected him to the position of chairmanship.
“I appreciate the confidence of the board of the NSE upon my election as Chairman this morning,” Kittony tweeted.
Kittony has been serving as a non-executive NSE board member in 2018.
He also served as Kenya National Chamber of Commerce President for two terms since 2012 before he passed on the baton to the current President Richard Ngatia.
He is a well-known personality in business leadership circles in Kenya as he also chairs the board of Radio Africa Group and the Chief Executive Officer Capital Realtime Limited.
Kittony also serves as the chair of the Credit Reference Bureau Kenya Limited, AAR insurance Limited, Mtech Limited.
He also serves on the Business Advocacy Fund board and also sits on the advisory council of the International fund for Health in Africa.
Safaricom, UNESCO and Eneza Education partner for Digital Mentorship Programme
NAIROBI, Kenya, Jul 13 – Safaricom has partnered with UNESCO, and Eneza Education to implement a digital mentorship programme for high school students interested in Science, Technology, Engineering and Mathematics (STEM).
The program involves working with role models and mentors to provide students with information on STEM subjects to enable them make informed career choices. Learners will get a chance to engage with tutors through programmes on local TV and community radio stations as well as through SMS via the short code 40291.
“We are implementing lessons picked during this COVID-19 pandemic to partner with other organisations to provide meaningful solutions for our customers via alternative channels. For this digital programme we are using our partnership with Eneza’s Shupavu 291 solution to give students access to mentors and information on STEM subjects via SMS”, said Peter Ndegwa, CEO, Safaricom.
Over 40 radio stations and a local TV channel will air the live shows during which students will be encouraged to send questions via SMS to 40291. The mentors and facilitators of the show will then send responses to each question as they engage the learners. The programme will run for the next 11 weeks.
“We are happy to be part of this project leveraging our existing Ask a Teacher platform on Shupavu 291 to adapt the mentorship solution. We believe that this will keep students connected to STEM in the face of this global pandemic irrespective of their gender and socio-economic backgrounds,” said Wambura Kimunyu., CEO, Eneza Education.
“Through this project we hope learners will be able to nurture interest in STEM through the linkage between them and the role models in the STEM profession, through online interaction and the continual access to mentorship services. During this period of containment UNESCO has partnered with the Ministry of Education, the Kenya National Commission for UNESCO, the National Commission for Science Technology and Innovation (NACOSTI) and Safaricom to provide students with information on STEM Education and life and survival skills to enable then overcome gender stereotypes about STEM careers, hence developing interest in science related subjects while learning from home,” said Ann Therese Ndong-Jatta, Regional Director, UNESCO.
Statistics show that only 22 percent of all students who are enrolled in Kenyan universities are in STEM fields despite a large number of related programmes on offer and the critical role they play in development.
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