NAIROBI // Business is good at Panda Flowers. The Kenyan flower company ships 200,000 red, yellow, orange and pink long-stem roses per day, mostly to florists in Europe and Asia.
But the company is missing out on the sweetest market of all: the United States. The high cost of shipping from Kenya to the US makes it impossible to compete with South American flower growers.
Despite a raft of trade incentives the American government has in place with African countries, the company still cannot work out a way to do business with the US, said Richard Hechle, the general manager.
"The favourable trade status does not give us an advantage at all," Mr Hechle said. "We still struggle to compete in the US market."
This is just the type of problem high-ranking American officials, including Hillary Clinton, the secretary of state, hope to address this week during the African trade and economic co-operation forum in Nairobi. The African Growth and Opportunity Act (AGOA), passed in 2000, allows some African countries to export goods to the US without tariffs, giving them a competitive advantage over goods from other countries. The goal was to stimulate local industries and "agribusinesses", helping Africa develop sustainably and weaning the continent away from foreign aid.
In a speech in Ghana last month, Barack Obama, the US president, said he wanted to make trade a key part of his Africa policy.
"I have no doubt that Africa holds the promise of a broader base of prosperity," Mr Obama said. "America can also do more to promote trade and investment. Wealthy nations must open our doors to goods and services from Africa in a meaningful way. That will be a commitment of my administration."
In the last nine years, AGOA has had mixed results. Some of the 39 African countries trading under the act have seen an increase in exports to the US, the world's biggest market.
In 2008, US AGOA-eligible imports from Africa rose by 30 per cent over the previous year to US$66 billion (Dh242.4bn), according to the US department of commerce. However, petroleum products from such countries as Nigeria and Angola accounted for 92 per cent of this trade. Products from Kenya's fledgling textile industry have slowly found their way to the US market, but the industry is still burdened by prohibitive shipping costs.
"Getting our products to the US is a problem because of freight charges," said Pauline Ngoru, general manager of Tarpo, a Kenyan tent manufacturer. "It's a real handicap."
Kenya's AGOA exports, valued at $250 million last year, may be inflated by transhipping. Some manufacturers in China and India send their products to Kenya, slap a "Made in Kenya" label on them and ship them on to the US duty-free under AGOA. While this practice is illegal, corruption and loose regulations in Kenya have allowed it to continue.
"Somewhere along the way, our textile industry was hijacked," said Paul Gamba, an economist at Egerton University in Nakuru, Kenya. "When you look at the volumes, you know it didn't all come from Kenya."
The agricultural sector, which is Kenya's top foreign exchange earner, has fared little better in getting products to American consumers.
"You have the government talking about AGOA, but the opportunity has not trickled down to the farmers," said Kanywithia Mutunga, the head of the Kenyan national federation of agricultural producers.
"We need to organise farmers to align themselves so that they can benefit."
"The private sector is going to take advantage of AGOA to expand trade and investment," said Joseph Wairiuko, the head of advocacy at the Kenyan association of manufacturers. "We have to exploit this opportunity." The legislation is set to expire in 2015 and American officials hope that, by then, African industry will be developed enough to compete on an equal footing with the rest of the world.
"For African economies to compete with advanced economies, they need a boost to get to that level," Mr Gamba, the economist, said.
"Handouts are not good. You need something that is sustainable, which is why I think the intention of this is good."
mbrown@thenational.ae
Business Insights
- As per the document, there are six filing options, including choosing to report on a realisation basis and transitional rules for pre-tax period gains or losses.
- SMEs with revenue below Dh3 million per annum can opt for transitional relief until 2026, treating them as having no taxable income.
- Larger entities have specific provisions for asset and liability movements, business restructuring, and handling foreign permanent establishments.
Electoral College Victory
Trump has so far secured 295 Electoral College votes, according to the Associated Press, exceeding the 270 needed to win. Only Nevada and Arizona remain to be called, and both swing states are leaning Republican. Trump swept all five remaining swing states, North Carolina, Georgia, Pennsylvania, Michigan and Wisconsin, sealing his path to victory and giving him a strong mandate.
Popular Vote Tally
The count is ongoing, but Trump currently leads with nearly 51 per cent of the popular vote to Harris’s 47.6 per cent. Trump has over 72.2 million votes, while Harris trails with approximately 67.4 million.
COMPANY%20PROFILE
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Nayanthara: Beyond The Fairy Tale
Starring: Nayanthara, Vignesh Shivan, Radhika Sarathkumar, Nagarjuna Akkineni
Director: Amith Krishnan
Rating: 3.5/5
Tax authority targets shisha levy evasion
The Federal Tax Authority will track shisha imports with electronic markers to protect customers and ensure levies have been paid.
Khalid Ali Al Bustani, director of the tax authority, on Sunday said the move is to "prevent tax evasion and support the authority’s tax collection efforts".
The scheme’s first phase, which came into effect on 1st January, 2019, covers all types of imported and domestically produced and distributed cigarettes. As of May 1, importing any type of cigarettes without the digital marks will be prohibited.
He said the latest phase will see imported and locally produced shisha tobacco tracked by the final quarter of this year.
"The FTA also maintains ongoing communication with concerned companies, to help them adapt their systems to meet our requirements and coordinate between all parties involved," he said.
As with cigarettes, shisha was hit with a 100 per cent tax in October 2017, though manufacturers and cafes absorbed some of the costs to prevent prices doubling.
COMPANY PROFILE
Founders: Alhaan Ahmed, Alyina Ahmed and Maximo Tettamanzi
Total funding: Self funded
If you go
Where to stay: Courtyard by Marriott Titusville Kennedy Space Centre has unparalleled views of the Indian River. Alligators can be spotted from hotel room balconies, as can several rocket launch sites. The hotel also boasts cool space-themed decor.
When to go: Florida is best experienced during the winter months, from November to May, before the humidity kicks in.
How to get there: Emirates currently flies from Dubai to Orlando five times a week.
Company%20Profile
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Traits of Chinese zodiac animals
Tiger:independent, successful, volatile
Rat:witty, creative, charming
Ox:diligent, perseverent, conservative
Rabbit:gracious, considerate, sensitive
Dragon:prosperous, brave, rash
Snake:calm, thoughtful, stubborn
Horse:faithful, energetic, carefree
Sheep:easy-going, peacemaker, curious
Monkey:family-orientated, clever, playful
Rooster:honest, confident, pompous
Dog:loyal, kind, perfectionist
Boar:loving, tolerant, indulgent
Sam Smith
Where: du Arena, Abu Dhabi
When: Saturday November 24
Rating: 4/5
From Zero
Artist: Linkin Park
Label: Warner Records
Number of tracks: 11
Rating: 4/5
Milestones on the road to union
1970
October 26: Bahrain withdraws from a proposal to create a federation of nine with the seven Trucial States and Qatar.
December: Ahmed Al Suwaidi visits New York to discuss potential UN membership.
1971
March 1: Alex Douglas Hume, Conservative foreign secretary confirms that Britain will leave the Gulf and “strongly supports” the creation of a Union of Arab Emirates.
July 12: Historic meeting at which Sheikh Zayed and Sheikh Rashid make a binding agreement to create what will become the UAE.
July 18: It is announced that the UAE will be formed from six emirates, with a proposed constitution signed. RAK is not yet part of the agreement.
August 6: The fifth anniversary of Sheikh Zayed becoming Ruler of Abu Dhabi, with official celebrations deferred until later in the year.
August 15: Bahrain becomes independent.
September 3: Qatar becomes independent.
November 23-25: Meeting with Sheikh Zayed and Sheikh Rashid and senior British officials to fix December 2 as date of creation of the UAE.
November 29: At 5.30pm Iranian forces seize the Greater and Lesser Tunbs by force.
November 30: Despite a power sharing agreement, Tehran takes full control of Abu Musa.
November 31: UK officials visit all six participating Emirates to formally end the Trucial States treaties
December 2: 11am, Dubai. New Supreme Council formally elects Sheikh Zayed as President. Treaty of Friendship signed with the UK. 11.30am. Flag raising ceremony at Union House and Al Manhal Palace in Abu Dhabi witnessed by Sheikh Khalifa, then Crown Prince of Abu Dhabi.
December 6: Arab League formally admits the UAE. The first British Ambassador presents his credentials to Sheikh Zayed.
December 9: UAE joins the United Nations.
The Sand Castle
Director: Matty Brown
Stars: Nadine Labaki, Ziad Bakri, Zain Al Rafeea, Riman Al Rafeea
Rating: 2.5/5
COMPANY PROFILE
Name: Almnssa
Started: August 2020
Founder: Areej Selmi
Based: Gaza
Sectors: Internet, e-commerce
Investments: Grants/private funding
Bob Honey Who Just Do Stuff
By Sean Penn
Simon & Schuster
Ticket prices
- Golden circle - Dh995
- Floor Standing - Dh495
- Lower Bowl Platinum - Dh95
- Lower Bowl premium - Dh795
- Lower Bowl Plus - Dh695
- Lower Bowl Standard- Dh595
- Upper Bowl Premium - Dh395
- Upper Bowl standard - Dh295
The%20trailblazers
%3Cp%3ESixteen%20boys%20and%2015%20girls%20have%20gone%20on%20from%20Go-Pro%20Academy%20in%20Dubai%20to%20either%20professional%20contracts%20abroad%20or%20scholarships%20in%20the%20United%20States.%20Here%20are%20two%20of%20the%20most%20prominent.%0D%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EGeorgia%20Gibson%20(Newcastle%20United)%3C%2Fstrong%3E%0D%3Cbr%3EThe%20reason%20the%20academy%20in%20Dubai%20first%20set%20up%20a%20girls%E2%80%99%20programme%20was%20to%20help%20Gibson%20reach%20her%20potential.%20Now%20she%20plays%20professionally%20for%20Newcastle%20United%20in%20the%20UK.%0D%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EMackenzie%20Hunt%20(Everton)%3C%2Fstrong%3E%0D%3Cbr%3EAttended%20DESS%20in%20Dubai%2C%20before%20heading%20to%20the%20UK%20to%20join%20Everton%20full%20time%20as%20a%20teenager.%20He%20was%20on%20the%20bench%20for%20the%20first%20team%20as%20recently%20as%20their%20fixture%20against%20Brighton%20on%20February%2024.%0D%3C%2Fp%3E%0A
Company%20Profile
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AIDA%20RETURNS
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Kanguva
Director: Siva
Stars: Suriya, Bobby Deol, Disha Patani, Yogi Babu, Redin Kingsley
Business Insights
- Canada and Mexico are significant energy suppliers to the US, providing the majority of oil and natural gas imports
- The introduction of tariffs could hinder the US's clean energy initiatives by raising input costs for materials like nickel
- US domestic suppliers might benefit from higher prices, but overall oil consumption is expected to decrease due to elevated costs
