WORLD TRADE  
ORGANIZATION  RESTRICTED 
WT/TPR/G/271 
17 October 2012 
 (12-5584) 
Trade Policy Review Body Original:  English/French 
  
 
   
 
TRADE POLICY REVIEW 
 
Reports by 
 
THE EAST AFRICAN COMMUNITY 
MEMBERS 
 
   
Pursuant to the Agreement Establishing the Trade Policy Review Mechanism 
(Annex 3 of the Marrakesh Agreement Establishing the World Trade Organization), the policy statements by the East African Community (EAC) members are attached. 
 
Note: These reports are subject to restricted circulation and press embargo until the end of the 
first session of the meeting of the Trade Policy Review Body on the East African Community. East African Community WT/TPR/G/271 
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 CONTENTS 
 Page 
REPORT BY BURUNDI 
I.  INTRODUCTION  7 
II.  KEY DEVELOPMENTS IN BURUNDI  8  
 (1)   INSTITUTIONAL DEVELOPMENTS  8  
 (2)   KEY DEVELOPMENTS IN THE DOMESTIC MARKET AND  
  G ENERAL GOVERNMENT POLICY  9 
 (3)   ELABORATION AND IMPLEMENTATION OF INVESTMENT POLICY  12  
 (4)   RECENT ECONOMIC PERFORMANCE AND FUTURE CHALLENGES  13  
III.  BURUNDI'S TRADE POLI CY OBJECTIVES  17  
 (1)   INTRODUCTION  17  
 (2)   BURUNDI AND THE WTO 18  
 (3)   SECTORAL TRADE POLICES  19  
 (4)   BILATERAL AND REGIONAL TRADE RELATIONS  24  
IV.  TRADE POLICY PROSPECTS  25  
V.  TECHNICAL ASSISTANCE AND CAPACITY BUILDING  26  
REPORT BY KENYA 
I. BACKGROUND 27 
II. ECONOMIC PERFORMANCE 27 
 (1) M ACROECONOMIC PERFORMANCE  27 
 (2) M ACROECONOMIC OUTLOOK  28 
III. SECTOR SPECIFIC PERFORMANCE 28 
 (1) A GRICULTURE , LIVESTOCK AND FISHERIES SECTOR  28 
 (2) M ANUFACTURING  29 
 (3) M INING  29 
 (4) S ERVICES SECTORS  29 
  (i) Tourism 29 
  (ii) Building and construction 30 
  (iii) Information and communication technology 30   (iv) Energy 31 
  (v) Financial services 31 
  (vi) Transport services 32 
IV. PUBLIC EXPENDITURE MANAGEMENT 33 
V. INVESTMENT REGIME 33 
 (1) F
OREIGN DIRECT INVESTMENT (FDI) 34 
 (2) L ICENSING REFORMS  35 
VI. TRADE PERFORMANCE 36 
 (1) D OMESTIC  36 
 (2) F OREIGN  36 WT/TPR/G/271 Trade Policy Review 
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VII. TRADE POLICY REGIME 37 
 (1) N ATIONAL AND INDUSTRIAL TRADE POLICY  37 
 (2) T RADE FACILITATION  37 
 (3) C OMPETITION POLICY  38 
 (4) G OVERNMENT PROCUREMENT  38 
 (5) P RIVATIZATION  39 
 (6) D EVELOPMENT IN STANDARD 'S AREA 39 
 (7) I NTELLECTUAL PROPERTY RIGHT AND ENFORCEMENT  41 
VIII. REGIONAL AND BILATERAL TRADE AGREEMENTS 42 
 (1) E AST AFRICAN COMMUNITY (EAC) 42 
 (2) C OMMON MARKET FOR EASTERN AND SOUTHERN AFRICA (COMESA) 42 
 (3) T RIPARTITE  42 
 (4) EAC-EU-EPA  NEGOTIATIONS  43 
 (5) A FRICAN GROWTH AND OPPORTUNITIES ACT (AGOA) 43 
 (6) M ULTILATERAL NEGOTIATIONS IN THE WTO 43 
 (7) B ILATERAL TRADE AGREEMENTS  44 
IX. PRIVATE SECTOR DEVELOPMENT STRATEGY (PSDS) 44 
REPORT BY RWANDA 
I. INTRODUCTION 46 
II. MACROECONOMIC ENVIRONMENT 46 
 2.1 E CONOMIC PERFORMANCE  46 
 2.2 S ECTORAL PERFORMANCE AND OUTLOOK  47 
  2.2.1 Agriculture 47   2.2.2 Industry 49 
  2.2.3 Services 51 
III. TRADE POLICIES AND PRACTICES 52 
 3.1 T
RADE POLICY OBJECTIVES  52 
 3.2 I MPORT AND TARIFF REGIME  53 
 3.3 E XPORT POLICY  54 
 3.4 I NVESTMENT REGIMES  54 
 3.5 S ANITARY AND PHYSTOSANITARY (SPS)  MEASURES  55 
 3.6 I NTELLECTUAL PROPERTY RIGHTS (IPR S) 55 
IV. TRADING ARRANGEMENTS 55 
 4.1 B ILATERAL AND REGIONAL TRADING AGREEMENTS  56 
  4.1.1 East African Community (EAC) 56   4.1.2 Common Market for Eastern and Southern Africa (COMESA) 56 
  4.1.3 The COMESA-EAC-SADC Trip artite Free Trade Area (TFTA) 56 
  4.1.4 Economic Community of the Great Lakes Countries (CEPGL) 57 
  4.1.5 European Union-East African Economic Partnership Agreement 57 
 4.2 M
ULTILATERAL COMMITMENTS  57 
  4.2.1 World Trade Organization (WTO) 57 
 4.3 A ID FOR TRADE  58 
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REPORT BY TANZANIA  
I. INTRODUCTION 59 
 II. MACROECONOMIC DEVELOPMENTS 59 
 (i) GDP Performance 59 
 (ii) Inflation Development 60  (iii) National Debt Developments 61 
 (iv) Fiscal Performance 61 
 (v) Balance of Payments 61  (vi) Exchange Rate 61 
 (vii) Employment 62 
 (viii) Economic Outlook 62 
III. MEDIUM TERM POLICY FRAMEWORK 62 
IV. TRADE RELATIONS 63 
 (i) East African Community 63  (ii) Southern Africa Development Community 64 
 (iii) The World Trade Organization 64 
V. SECTOR DEVELOPMENT 65 
 (i) Services Sector 65 
 (ii) Agriculture Sector 66   ( a )  C r o p s  6 6  
  (b) Livestock 68 
  (c) Forestry 69  (iii) Industrial Sector 69 
 (iv) SME Sector 72 
 (v) The National SME Development Policy 73  (vi) Energy and minerals 73 
 (vii) Natural Resources and Tourism 74 
  (a) Tourism 74   (b) Wildlife 75 
  (c) Forestry and beekeeping 76 
VI. CONCLUSION  76 
REPORT BY UGANDA 
I. INTRODUCTION 77 
II. ECONOMIC OUTLOOK 77 
 (1) G
ROSS DOMESTIC PRODUCT  77 
 (2) I NVESTMENT AND SAVINGS  78 
 (3) E MPLOYMENT  79 
 (4) P UBLIC REVENUE  79 
III. SECTORAL PERFORMANCE 79 
 (1) A GRICULTURE  79 
 (2) S ERVICES  80 
 (3) M ANUFACTURING  80 
IV. UGANDA'S TRADE POLICY 81 WT/TPR/G/271 Trade Policy Review 
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V. DIRECTION OF TRADE 81 
 (1) E XPORTS  81 
 (2) I MPORTS   82 
VI. TRADE POLICIES BY SECTOR 82 
 (1) S ERVICES  82 
 (2) A GRICULTURE  82 
 (3) M INING AND ENERGY  82 
 (4) M ANUFACTURING INDUSTRY  83 
VII. UGANDA'S EXTERNAL TRADE RELATIONS 83 
 (1) R EGIONAL TRADE RELATIONS  83 
 (2) B ILATERAL TRADE RELATIONS  83 
 (3) U NILATERAL TRADE RELATIONS  84 
 (4) M ULTILATERAL TRADE RELATIONS -WTO 84 
VIII. CONCLUSION  84 
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REPORT BY BURUNDI 
 
I. INTRODUCTION 
1. The Republic of Burundi is a landlocked countr y wedged between Central and East Africa.  
Burundi joined the World Trade Organization (WTO) in July 1995, after having become a Contracting Party to the GATT in 1962.  The Government of Burundi recognizes the pivotal role played by the WTO in the management and pr otection of an open multilateral trading system, 
based on rules designed to promote growth and development on a global scale.  The monitoring 
of national trade policies through the Trade Policy Re view Mechanism is an important feature of the 
WTO's work, and transparency is a fundamental component of the efficiency of the multilateral 
trading system. 
2. The first Trade Policy Review of Burundi took pl ace in 2003.  The current review is therefore 
the second of its kind, but is marked particularly by  the fact that it is being held jointly with the 
reviews of four other countries of  the East African Community (EAC).
1  There have been a number of 
important developments since Burundi's first review in 2003, which continue to have implications for 
trade and trade-related policies. 
3. Burundi's new trade policy, as envisaged by the authorities for the coming years, is set out in 
several framework documents, including the document entitled "Burundi Vision 2025"2;  the Growth 
and Poverty Reduction Strategy Paper (GPRSP II)3;  the national agricultural strategy (2008-2018)4;  
the national trade and industrial development strategy5;  and the national sustainable tourism 
development strategy.6  At the same time, the national strategy for private sector development and the 
national regional integration strategy, which ar e currently being elaborated, will enhance the 
framework for future action by Bur undi in the area of trade policy. 
4. Despite its landlocked status, Burundi is seek ing to make trade an essential pillar of 
its strategy for development, employment pr omotion and poverty reduction.  Between 2004 
and 2006, the cumulative share of trade in goods and services (exports and imports) in GDP 
rose from 43.5 per cent to 57.7 per cent, an increase of 14 per cent over the period.  Trade in services 
alone, as a proportion of GDP, grew from 15.41 per cent in 2004 to 29.26 per cent in 2008. 
5. One of the main changes in Burundi's trad e policy was its accession to the East African 
Community in July 2007.  Since then, Burundi has contributed to the work of the 
Community Secretariat, particularly in the context of the implementation of protocols for the creation 
of the customs union and the common market, negotiations under the Economic Partnership Agreement (EPA) w ith the European Union (EU), and the 
                                                      
1 Kenya, Rwanda, Tanzania and Uganda. 
2 Republic of Burundi, Ministry of Planning and Communal Development (2011), " Vision 
Burundi 2025 ", Bujumbura. 
3 Republic of Burundi, Second Vice- Presidency of the Republic (2012), Cadre stratégique de 
croissance et de lutte contre la pouvreté II , Bujumbura. 
4 Republic of Burundi, Ministry of Agriculture and Livestock (2008), Stratégie agricole nationale:  
2008-2018 , Bujumbura. 
5 Republic of Burundi, Ministry of Trade, Industry, Posts and Tourism (2012), Stratégie nationale de 
développement industriel et commercial , Bujumbura. 
6 Republic of Burundi, Ministry of Trade, Industry, Posts and Tourism (2011), Stratégie nationale de 
développement durable du tourisme , Bujumbura. WT/TPR/G/271 Trade Policy Review 
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  SADC-COMESA-EAC Tripartite Agreement.  Ap art from its participation in the various 
WTO agreements, Burundi is continuing its progra mme of trade liberalization on a bilateral and 
regional basis with a view to promoting trade a nd investment.  According to the World Bank Doing 
Business index for 2012, Burundi climbed eight places in the ranking, from 177 in 2010 to 169 in 
2012.  Burundi is also ranked 46 in the investor prot ection index and thus stands as one of the top ten 
reforming countries in the world. 
6. Burundi is seeking to fulfil all its trade policy goals while promoting improved social 
inclusion, economic growth and sustainable developm ent.  The purpose of this report is to provide a 
broad overview of the way in which Burundi's trade policy is formulated, as well as to highlight the 
country's current and future trade priorities. 
II. KEY DEVELOPMENTS IN BURUNDI 
(1) INSTITUTIONAL DEVELOPMENTS  
7. This is the first time that Burundi is conduc ting its trade policy review jointly with other 
countries of the East African Community.  Follo wing the protracted socio-political crisis 
between 1993 and 2003, and th e return to stability in the aftermath of the signing of the Arusha Peace 
Agreement on 28 August 2000 and the holding of gene ral elections in 2005, Burundi has established 
new democratic institutions. 
8. A new Constitution was adopted in February 2005 and promulgated in accordance with 
Law No. 1/610 of 18 March 2005.  The new Constitution provides for the restoration of a pluralistic 
democratic system and the rule of law, guarant ees individual freedoms and recognizes the right of 
association, including the right to form political  parties.  Executive power is exercised by 
the President of the Republic, two Vice-Presiden ts of the Republic and the members of the 
Government.  The first Vice-President is responsib le for coordinating political and administrative 
affairs, while the second Vice-President has the task  of economic and social coordination.  At the 
provincial level, executive power is delegated to a governor responsible fo r coordinating provincial 
administrative services. 
9. Legislative power is exercised by the Parliament which comprises two chambers:  
the National Assembly and the Senate.  The Cons titution also provides for a court of auditors 
(Article 178). 
10. The President, H.E. Mr Pierre Nkurunziza, was elected in 2005 and re-elected in 2010.  
The first and second Vice-Presidents are Mr Thérence Sinunguruza and Dr Ir Gervais Rufyikiri, 
respectively. 
11. Information relating to Burundi's trade policy is contained in the basic law, particularly as 
regards questions of external control, ratification of international agreements, or the adoption of the 
State budget.  Burundian trade policy is mainly con ducted by the Ministry which has trade as part 
of its remit.  Other Ministries contribute thereto in varying degrees, in particular the Ministries 
responsible for economic developm ent planning, transport, mining and energy, and justice.  
After joining the EAC, Burundi established a Minist ry to oversee East Afri can Community affairs, 
which is attached to the Office of the President of  the Republic.  The Ministry plays a vital role in 
coordinating the activities of th is regional economic community. 
12. The tax administration was reformed in 2009 through the establishment of the Burundi 
Revenue Office (OBR), in accordance with Law No. 1/11 of 14 July 2009.  The law completely East African Community WT/TPR/G/271 
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 overhauled the organization of the tax and customs authorities and established an agency with a high 
degree of managerial autonomy, operating on the results-based management model, to replace the 
previous quasi-ministerial administrative authorities. 
13. An investment promotion agency (API) was established in 2009 by virtue of Decree 
No. 100/177 of 19 October 2009.  The API's main func tion is a general one of informing and assisting 
investors, in particular in obtaining documents a nd fulfilling the formalities provided for by the law.  
The agency is also responsible for devizing re forms needed to improve the business climate in 
Burundi and ensure sound implementa tion of the new Investment Code.7 
14. One noteworthy development in the private sector  was the reform of the Burundi Chamber of 
Commerce and Industry (CCIB) in May 2010, th rough the establishment of the Burundi Federal 
Chamber of Commerce and Industry (CFCIB).  Th e new body's purpose is to initiate and support 
actions to improve the business climate and develop th e private sector in Burundi.  It groups together 
several private-sector professional organizations, wh ich have been organized into 11 sectoral and 
two cross-sectoral chambers. 
15. A Government decree of June 2008 introduced a framework for dialogue to promote 
public-private sector partnership.  The framework h as a standing Secretariat and is meant to serve as a 
platform for consultation and dialogue between au thorities at the highest level in connection with 
private-sector development issues. 
16. Lastly, the State has stepped up its privatization programme by withdrawing from several key 
sectors of the economy, including coffee and finance in particular.  The current Government has a 
Ministry responsible for good governance and privati zation, which is directly answerable to the 
President of the Republic.  The Ministry's task is to supervise and conduct the policy for privatization 
of State-owned enterprises, and to introduce the n ecessary related structural and institutional reforms. 
(2) KEY DEVELOPMENTS IN THE DOMESTIC MARKET AND GENERAL GOVERNMENT POLICY  
(a) The "Burundi 2025" vision 
17. In the aftermath of the socio-political crisis experienced by Burundi between 1993 and 2000, 
the authorities took a series of emergency measures to stem some of the most seriously adverse 
consequences.  Thus, with a view to ensuring a longer strategic horizon for the consolidation of 
security and socio-political stability, sustainable ec onomic growth and job promotion, food security 
and poverty reduction, the G overnment adopted its forwar d-looking national study entitled 
"Burundi 2025" in June 2011. 
18. The "Burundi 2025" vision is a planning instrument for long-term economic and social 
development which will guide national policies in the area of sustainable development, with a view to 
satisfying the needs of present and future generati ons.  The document relies on eight key pillars which 
will serve to ensure a clean break with the negative tendencies of the past. 
19. The first pillar concerns enhancing good governance and strengthening Government 
capabilities.  The aim is to strengthen security, resolv e past disputes and, at the same time, prevent 
new conflicts through the promotion of national rec onciliation.  Burundi also intends to strengthen the 
rule of law, Government capacities and th e professional skills of the administration. 
                                                      
7 Law No. 1/24 of 10 September 2008 on the new Investment Code of Burundi. WT/TPR/G/271 Trade Policy Review 
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  20. The second pillar relates to the development of human capital.  The State intends to offer 
quality social services in the areas of health and education. 
21. The third pillar concerns economic growth a nd poverty reduction.  The authorities are aiming 
for accelerated double-digit economic growth under th e impetus of a diversified production sector that 
is competitive both internally and externally.  Given the importance of agriculture to the 
Burundian economy and the fact that it is still in an  undeveloped state, it is planned to modernize the 
sector and develop agribusiness.  The national auth orities are also anxious to develop sectors with 
high growth potential such as tourism, telecommunicati ons and mining.  Lastly, particular emphasis is 
placed on industrialization and private-sector developm ent in Burundi over the next few years.  Under 
this pillar, the "Burundi 2025" vision gives prio rity to economic infrastructures, including energy. 
22. The fourth pillar is based on the strengtheni ng of regional integration and attracting 
gains thereby.  Apart from the EAC, Burundi is also a member of the Common Market for Eastern 
and Southern Africa, the Economic Community of the Great Lakes Countries (CEPGL) and the 
Economic Community of Central African States (ECCAS).  The authorities plan to rationalize 
their commitments vis-à-vis  these different communities by implementing appropriate reforms, 
and in particular to make Burundian products co mpetitive on the different regional markets.  
The diversification of the export base and the deve lopment of the competitiveness of local business 
in Burundi are essential prerequisites for th e success of the regional integration policy. 
23. Population control is the fifth pillar of the "B urundi 2025" vision.  With a population growth 
rate estimated at 2.4 per cent per year in 2010, Burundi is well aware of the burden placed by its 
population on the success of future reforms.  Th e authorities wish to ease demographic pressure and 
lower the population growth rate to 2 per cent by 2025.  To this end, the Government will use 
awareness-raising measures to reduce the fertility rate among women. 
24. The sixth pillar entails "restoring social cohesion by giving renewed priority to basic 
cultural values".  In Burundi's post-conflict setting, the strengthening of social cohesion is essential to 
mobilizing and harnessing the energies of the populati on as a whole for the sake of a shared future 
and enhanced future prospects. 
25. The penultimate pillar concerns town and country  planning.  Burundi intends to introduce a 
large-scale town planning policy that would produc e benefits extending to the promotion of urban 
employment and improvement of the quality of basic social services and access thereto.  It is planned to achieve an urbanization rate of 40 per cent by 2025, compared with barely 10 per cent in 2010. 
26. The eighth and final pillar relates to the strengthe ning of international partnership.  Burundi is 
seeking to create synergies between different devel opment partners and to promote a framework for 
dialogue in the development planning process and in the financing and implementation of the 
"Burundi 2025" vision. 
(b) The growth and poverty reduction strategy paper (GPRSP) 
27. Deriving inspiration from the "Burundi 2025" vision, the Burundi Government adopted 
its first growth and poverty reduc tion strategy paper (GPRSP I) in September 2006.  Following an 
evaluation, this document was update d in January 2012 (GPRSP II).  GPRSP II is aimed at creating an 
environment conducive to sustainable developmen t in Burundi with a view to achieving the 
Millennium Development Goals (MDGs)  and the "Burundi 2025" vision. East African Community WT/TPR/G/271 
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 28. Implementation of GPRSP I has produced encour aging results in the areas of security, 
governance, development of human capital and access to  basic social services.  However, there has 
been no improvement on the poverty front given the weakness of economic growth, caused mainly by 
poor performance in the agricultural sector, which has a very narrow export base, low levels of 
investment and a weak private sector.  In additio n, implementation of GPRSP I has enabled Burundi 
to reach the completion point under the Heavily Indebted Poor Countries (HIPC) initiative of the 
IMF and thus to obtain substantial debt relief vis-à-vis  its international creditors. 
29. In the face of the numerous challenges that rema in to be addressed for the sake of harmonious 
development in Burundi, four strategic priorities have been adopted under GPRSP II:  strengthening 
of the rule of law;  consolidation of good governance and promotion of gender equality;  
transformation of the Burundian economy to promote sustained growth with job creation;  improvement of accessibility and quality of basic so cial services and strengthening of the social 
welfare base;  and lastly, land and environmen tal management for sustainable development. 
(c) Burundi's accession to the East African Community (EAC) 
30. The strengthening of regional trade integrati on is an essential pillar of the "Burundi 2025" 
vision.  Following Burundi's accession to the EAC on 1 July 2007, and to its Customs Union, 
all internal community tariffs were eliminated.  Community rules of origin were introduced and the 
elimination of customs duties and taxes of equiva lent effect on products originating in the EAC 
became effective in 2010.  In prac tical terms, having already fully lib eralized its trade with Rwanda 
and Kenya in the context of the COMESA free trad e area, and having partially liberalized its trade 
with Uganda, Burundi additionally opened its market to the United Republic of Tanzania. 
31. Following accession to the EAC Customs Union, Burundi applies the three bands of the 
Common External Tariff (CET):  0 per cent on raw materials and capital goods;  10 per cent on 
intermediate goods;  and 25 per cent on finished  goods.  The EAC CET comprises 5,432 eight-digit 
lines under the Harmonized System (HS) nomenclatu re.  The protocol provides for reviewing the 
highest tariff after five years.  In addition, higher rates ranging from 35 per cent to 100 per cent are 
applied to products deemed to be sensitive such as dairy products, wheat, rice, sugar, maize and 
cotton fabric.  The protocol instituting the EA C Common Market, which entered into force for 
Burundi in July 2010, also provides for the free move ment of goods, persons and workers, the right of 
establishment, the right of residence and the free movement of services and capital. 
32. Burundi's customs legislation has consequent ly undergone a major transformation with the 
implementation of the EAC Customs Management Ac t, replacing Law No. 1/02 of 11 January 2007 
on the Burundi customs code. 
(d) Legal and regulatory framework 
33. Progress has been made on several fronts in Bur undi since 2004 in terms of modernizing the 
legal and regulatory framework relating to trade polic y.  The main reforms that have been introduced 
concern the commercial code, Law No. 1/07 of  26 April 2010;  the law on the competition 
law regime, Law No. 1/06 of 25 March 2010;  the Government procurement code, Law No. 1/01 
of 4 February 2008;  the law on industrial property, Law No. 1/13 of 28 July 2009;  the law establishing a code for private companies and compan ies in which the State has shares, Law No. 1/09 
of 30 May 2011;  and the law on bankruptcy a nd composition, Law No. 1/07 of 15 March 2006.  
The new law on intellectual property governs the us e of compulsory licences, traditional knowledge 
and handicraft items, as well as unfair competition;  while the law on the competition regime WT/TPR/G/271 Trade Policy Review 
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  establishes an independent competition commission which has its own legal personality and enjoys 
administrative and financial autonomy. 
(3) ELABORATION AND IMPLEMENTATION OF INVESTMENT POLICY  
34. Since the end of the socio-political crisis in Burundi and following the elaboration of the 
GPRSP and its implementation, which made it po ssible to reach the completion point in the 
HIPC process, the authorities have been working ha rd to address the constraints on the growth of 
investment in general and foreign direct investment  (FDI) in particular.  The Government recognizes 
FDI and development of the private sector as a central feature of the economic revival and the fight against poverty. 
35. Structural reforms have been introduced , such as the State's withdrawal from 
production sectors in favour of private enterprises, a nd liberalization of the economy.  This process 
is one of the pillars of Burundi's strategy to  attract FDI and create a more investment-friendly 
economic environment.
8 
36. Burundi's proactive approach to investment policy found concrete expression in the adoption 
of a new Investment Code in 2008, pursuant to La w No. 1/24 of 10 September 2008.  The new Code 
is very similar to those of the EAC countries.  In addition, Law No. 1/23 of 24 September 2009 
specifies the tax benefits granted to investors.  These benefits include exemptions from customs 
duties on certain capital goods, a tax credit of 37  per cent for depreciable investment goods, 
exemptions from advance payment of VAT on investment projects exceeding a value of 500 million Burundi francs (FBu) (€285,000), redu ction of countervailing duties from 5 per cent 
to 1.5 per cent when the investment exceeds one billion FBu (€571,000), or again the reduction of 
the 2 per cent taxing right when the en terprise creates between 50 and 200 jobs. 
37. Burundi's institutional investment policy framework was strengthened by the 
establishment, in 2009, of the Investment Promotion Agency (API), under Law No. 100/177 of 19 October 2009.  The API's main functions are to provide information on investment and export promotion, to provide general assistance a nd support to investors, particularly in obtaining 
documents and complying with formalities, to devi se reforms needed to improve the business climate, 
to engage the administrative authorities in th e event of failure to implement or improper 
implementation of the Investment Code, etc. 
38. As mentioned above, Burundi was ranked 169
th out of 183 countries in the World Bank's 
Doing Business index of 2012, and thus moved up eight places from the previous year.  Burundi has 
undertaken to continue its efforts to improve the business climate. 
39. Burundi also benefits from an economic ma nagement support project (PAGE) initiated by 
the Government in 2004 with the support of the Wo rld Bank and the IMF.  The aim of the project 
is to improve the investment climate by m odernizing the entire regulatory framework for 
economic activities. 
40. Burundi has investment potential in the key sectors of agriculture, mining, manufacturing, 
services and tourism, and will cont inue gradually to de velop its investment policy, in close 
coordination with regional initiatives such as the ne gotiation of bilateral investment agreements. 
                                                      
8 UNCTAD (2010), Investment Policy Review of Burundi , 132 pages, Geneva. East African Community WT/TPR/G/271 
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 (4) RECENT ECONOMIC PERFORMANCE AND FUTURE CHALLENGES  
(a) Overall economic performance 
41. In 2011, Burundi's real GDP growth rate reac hed 4.2 per cent, compared with 3.8 per cent 
in 2010 and 3.5 per cent in 2009.  Burundi's economy has been growing steadily since 2003, the year 
of its last Trade Policy Review, although the ec onomic growth rate remains weak and below the 
forecast for GPRSP I, which projected average growth of the order of 6 per cent to 7 per cent per year.  Headline inflation stood at 9.5 per cent in 2011, as against 6.4 per cent in 2010 and 10.6 per cent in 2009.  In 2008, the pressure on overall demand ca used by a price shock on oil and food and an 
energy deficit caused inflation to rise to a record leve l of 26 per cent.  Real GDP growth is expected to 
reach 4.9 per cent in 2012, with an 11.7 pe r cent average increase in consumer prices. 
42. The continued high level of population growth  in 2010 (2.5 per cent) is a blow to the 
ambitions of the authorities in terms of the su ccess of economic reforms and poverty reduction.  
Burundi's total population stood at 8.4 million in 2010, compared to 8 million in 2008 and 6.83 million in 2003.  The slight improvement in life expectancy at birth, which stood at 49.6 years in 2010, compared to 48.9 years in 2008 and 47 years in 2003, reflects progress in 
access to health services and in the fight against HIV/AIDS. 
43. In January 2009, Burundi reached the completi on point of the HIPC initiative, which reduced 
Government debt by more than 90 per cent of its inflation-adjusted net value and lowered the debt 
burden by around 30 to 40 million per year over the next 30 years.  The country has also received 
additional benefits under the multilateral debt re lief initiative.  Total outstanding debt accounted 
for 22 per cent of GDP in 2010 compared with 98 per cent of GDP in 2008. 
44. Since the last review in 2003, investment h as recorded a significant increase mainly as a 
result of post-crisis reconstructi on and the improved business climate.  The total volume of investment 
in nominal terms grew from 32.1 per cent between  2007 and 2010 (FBu 185.7 billion compared to 
FBu 379.9 billion);  and the overall investment ra te rose from 17.5 per cent to 20.6 per cent of GDP 
over the same period. 
45. In the area of poverty and according to UNDP data (data obtained from a multi-indicator 
cluster survey), the proportion of Burundians livi ng in extreme poverty in 2011 is 61.9 per cent.  
The survey reveals that 81.3 per cent of the popul ation live on less than US$1.25 per day (measured 
by purchasing power parity (PPP)) and 66.9 per cent live below the poverty line;  51.6 per cent of the 
population do not have clean water;  63.1 per cent ar e not covered by the improved sanitation system;  
and 84.3 per cent lack modern fuel products. 
46. According to GPRSP II, the state of poverty is difficult to evaluate because of the lack of 
reliable and recent data.  The assessment report produ ced in 2010 shows mixed results in terms of 
the MDGs;  only two of the eight goals have actually been achieved. 
47. Table 1 below indicates trends in the main economic aggregates for Burundi between 2005 
and 2010. WT/TPR/G/271 Trade Policy Review 
Page 14 
  
  Table 1 
Burundi, trends in main economic aggregates, 2005-2010 
2005 2006 2007 2008 2009 2010
GDP at market prices (FBu million) 860,90 0 946,402 1,060,132 1,386, 199 1,637,111 1,843,893
GDP at market prices (US$ million) 796 920 980 1, 169 1,331 1,498
Real GDP, growth rate (%) 0.9 5.1 3.2 4.3 3.4 3.9
Population (millions) 7.4 7.6 7.8 8.1 8.3 8.5
Nominal GDP per capita (US$) 107.9 121.0 125.0 144.8 160.3 175.9
Percentage of GDP 
Sectoral distribution of GDP   
Primary sector 45.2 45.1 43.7 43.5 42.8 42.9
Secondary sector 15.4 15.3 15.3 15.4 15.7 15.8
 Industry, mining and energyb 10.6 10.4 10.3 10.2 10.2 10. 3
 Construction 4.8 4.9 5.1 5.2 5.4 5.5
Tertiary sector 32.5 32.8 34.3 34.5 35.0 35.0
 Tradable services 11.5 11.5 12.5 12.5 12.8 12.8
 Non-tradable services 21.0 21.2 21.9 22.0 22.2 22.2
GDP at factor cost 93.1 93.2 93.3 93.4 93.5 93.6
Indirect taxes less subsidies 6.9 6.8 6.7 6.6 6.5 6.4
       
National accounts       
Private final consumption 92.0 94.9 95.1 87.0 81.8 80.0
Public final consumption 26.5 27.3 27.1 41.6 36.7 39.2
Gross fixed capital formation 10.5 16.3 17.5 22.3 22.1 20.6
Variation in inventory 0.0 0.0 0.0 0.0 0.0 0.0
Net exports -29.1 -38.5 -39.8 -50.9 -40.7 -39.7
Exports of goods and services 11.5 10.1 8.6 9.0 7.3 9.1
Imports of goods and services 40.6 48.6 48.3 59.9 48.0 48.8
   
Prices and interest rates   
Inflation (CPI, % change) 13.5 2.8 8.3 24.1 11.0 6.4
Deposit rate (interest rate) 9.6 8.9 8.3 8.1 7.6 7.3
   
Exchange rate       
FBu/US$ (annual average) 1,082 1,029 1,082 1,186 1,230 1,231
   
Public finances    
Revenue and grants  32.5 30.4 34.3 28.7 25.9 39.4
Revenue 20.5 19.3 19.0 18.8 18.9 19.9
 Tax revenue  18.5 17.3 17.5 17.1 17.0 18.6
 Non-tax revenue 2.0 2.0 1.5 1.7 1.4 1.3
 Special revenue (COMESA) 0.0 0.0 0.0 0.0 0.5 0.1
Grants 12.0 11.1 15.2 9.9 6.5 19.3
Expenditure 34.7 33.7 37.1 31.6 32.8 46.8
 Current expenditure  25.7 24.0 25.0 26.1 26.4 27.5
 Expenditure on goods and services 16.1 17.4 17.3 18.6 17.3 16.8
 Wages 8.5 9.5 10.5 11.2 11.0 11.5
 Purchases of goods and other se rvices 7.6 7.9 6.7 7.5 6.3 5.3
 Subsidies and other transfers 3.5 3.8 4.4 5.2 6.9 8.5
 Interest payments 3.7 2.1 2.8 1.9 1.6 1.6
 Special fund expenditure 2.4 0.7 0.5 0.4 0.5 0.6
Current account balance, excluding grants -5.2 -4.7 -6.0 -7.3 -7.5 -7.6
Current account balance, including grants 6.8 6.4 9.3 2.6 -0.5 11.9East African Community WT/TPR/G/271 
 Page 15 
 
 
 2005 2006 2007 2008 2009 2010
 Capital expenditure 9.0 9.7 12.1 5.5 6.4 19.3
Overall balance, excluding grants (accrua l basis) -14.2 -14.3 - 18.1 -12.8 - 13.9 -26.9
Overall balance, including grants (accrua l basis) -2.3 -3.3 -2 .8 -2.9 -6.9 -7.4
Financing 2.3 3.3 2.8 2.9 6.9 7.4
 External financing 1.6 2.1 0.9 1.0 4.7 6.1
 Net domestic financing 0.4 3.9 0.4 2.4 5.2 1.3
 Errors and omissions 0.2 -2.7 1.6 -0.5 -3.1 0.0
    
Public debt   
 Domestic debt (year-end) / GDP 22.4 24.4 22.7 19.7 22.4 23.2
 External debt (year-end) / GDP 144.6 140.0 144.4 113.1 34.3 28.6
Sources : Ministry of Planning and Communal Development (2011), L'Economie Burundaise en 2010;  and Bank of the 
 Republic of Burundi (2012), Rapport annuel 2011 . 
(b) Sectoral growth 
48. In 2010, Burundi's economy is still dominated by  the primary sector (agriculture, livestock 
and fisheries), which accounts for 42.9 per cent of  GDP, compared with 43.7 per cent in 2007.  
The primary sector employs some 90 per cent of the workforce and accounts for more than 90 per cent of export revenue.  Although agriculture's contri bution to GDP remains impo rtant, it has in recent 
years given ground to the tertiary sector, particularly tradable services. 
49. With regard to effective implementation of  measures to revive agricultural production 
(diversification of agricultural production, maintenan ce of a stock of fertilizer to prevent persistent 
shortages, improvement of yields through research, introduction of disease-resistant varieties, use of 
selected seeds, promotion of the irrigation system, etc.), the primary sector grew by 3.9 per cent in 2010.  However, 2010 saw a slowdown in food pr oduction compared to the previous period (2 per 
cent as against 3 per cent in 2009), mainly due to the drought recorded in some of Burundi's northern 
provinces. 
50. The secondary sector, comprising mainly indus try and construction, has been stagnating 
since 2003 and accounted for an average of 15.5 per cent of GDP per year over the period.  Burundian industry is dominated by agribusiness (57.5 per cent of the sector) and construction 
activities (5 per cent of the sector on average) ma inly relate to socio-economic infrastructure. 
51. The tertiary sector is continuing the growth traj ectory started in 2005, having seen its share of 
GDP rise from 34.3 per cent in 2007 to 35 per cent in  2009 and 2010, respectively.  This change in the 
structure of the Burundian economy is explained by the strong growth of services, particularly in the 
subsectors of public administration, which account ed for 22.2 per cent of GDP in 2009 and 2010, 
compared with 9.7 per cent and 11.1 per cent in 2005 and 2006 respectively;  and transport and 
communications (5.2 per cent of GDP in 2009 a nd 2010, compared with 2.9 and 3 per cent, 
respectively, in 2005 and 2006).  The growth of the te rtiary sector is further bolstered by commercial 
activities which accounted for 4.4 per cent of GDP in 2010. 
(c) Foreign trade 
52. Despite its being a landlocked country, Burund i's foreign trade in goods and services has 
grown substantially since 2004.  Indeed, the contri bution of trade (exports and imports) in goods and 
services to GDP rose from 43.5 per cent in 2004 to 57.7  per cent in 2006;  and the total value of trade WT/TPR/G/271 Trade Policy Review 
Page 16 
  
  in goods and services more than doubled in the space of five years, rising from FBu 409.75 billion 
in 2007 to FBu 750.86 billion in 2 010 and FBu 1,110.68 b illion in 2011.  Trade in services has also 
almost doubled its share of GDP, having risen from 15.41 per cent in 2004 to 25.76 per cent in 2006 and 29.26 per cent in 2008. 
53. The trade balance has continued to record a deficit, amounting to US$300.9 million in 2010, 
or 20 per cent of GDP.  This situation has been ca used by an increase in imports (FBu 540 billion 
in 2010 compared with FBu 422 billion in 2009), which has greatly outstripped the increase in 
exports (FBu 124.6 billion in 2010 compared with FBu 84.2 billion in 2009).  The resulting current 
account deficit has been partially offset by an increase in foreign aid flows, but still accounted 
for 17.7 per cent of GDP on average between 2008 an d 2010 (World Development Indicators:  WDI). 
54. Burundi continues to have a very narrow export base, which is confined mainly to coffee and 
tea (70 per cent of total exports from 2008 to 2010).  Exports grew at a slower rate than GDP over the 
period 2004-2010.  Consequently, the share of goods exports in GDP remained at around 10 per cent 
between 2005 and 2007, but dropped shar ply thereafter to less than 5 per cent in 2010.  The ratio of 
exports to GDP practically doubles when services are included, but this is mainly due to the 
spectacular increase in the exports of "Government services".
9  The rate of coverage of imports by 
exports nevertheless improved slightly between 2007 and 2010, rising from 18 per cent to 20 per cent 
before again falling to 17 per cent in 2011. 
55. The degree of openness of the economy, measured by the ratio of exports and imports 
to GDP, improved from 30.92 per cent in 2009 to 36.02 per cent in 2010.  However, the geographical 
composition of Burundi's trade in goods (import or igins and export destinations) has not changed 
significantly since its last Trade Policy Review in 20 03, despite a slight reorientation of the country's 
trade flows as a result of accession to the East Afri can Community (EAC) in 2007.  Burundi's exports 
continue to be directed mainly to the countries of Europe but their relative share has declined.  
Thus, between 2008 and 2010, 40 per cent of exports were destined to European countries compared 
with 50 per cent between 2001 and 2003. 
56. Certain other developing countries have beco me relatively important destinations for 
Burundian products.  For example, exports to Pa kistan and the Democratic Republic of the Congo 
accounted for roughly 8 per cent and 7 per cent, resp ectively, of Burundi's total exports in 2010.  
Exports to the EAC countries also grew (from 10.9 per cent of total exports in 2001-2003, to 13.6 per 
cent in 2008-2010), as did exports to the COMESA countries not belonging to the EAC (from 1.3 per 
cent to 5.9 per cent during the same span).10 
57. In the case of imports, the European Union and th e other countries of the EAC continue to be 
the first and second main sources of Burundi's imports, respectively, but their relative shares have declined since 2003 (dropping from 35 per cent to 28 per cent and from 30 per cent to 26 per cent, 
respectively).  Growing sources of imports include Sa udi Arabia (12 per cent of imports, mainly oil, 
in recent years) and China (from less than 3 per cent in 2003 to 9 per cent in 2010). 
                                                      
9 Republic of Burundi/Enhanced In tegrated Framework (2012), update d Diagnostic Trade Integration 
Study. 
10 Republic of Burundi/Enhanced Integrated Framework (2012):  updated Diagnostic Trade Integration 
Study. East African Community WT/TPR/G/271 
 Page 17 
 
 
 (d) Future challenges 
58. According to the latest GPRSP II forecasts, GD P growth, estimated at 4.2 per cent in 2011, 
is expected to reach 5.1 per cent in 2012 and 8.2 per cent in 2015.  On average, during the 
period 2012-2015, Burundi's economy is expected to grow by 6.9 per cent per year, which is 3 per 
cent higher than the average growth rate recorded  between 2007 and 2011, and would be fuelled by 
developments in the three sectors. 
59. The improvement in the economic conditions of the poorest people and the success of future 
policies will necessarily depend on the handling of a numbe r of challenges.  First, there is the pressure 
of population growth, which the authorities wish to bring down to 2 per cent per year on 
average by 2015.  Burundi also plans to introduce more intensive systems of agricultural production, 
to enhance public spending effici ency, to take steps to develop the private sector as an engine 
of economic growth, to strengthen its energy  production capacity and its national trade 
policy capacities.  Improving the business climate and diversifying exports are priorities for the Burundian Government. 
60. Compliance with the EAC convergence criteri a is another important objective of the 
Government, which is seeking to improve the m acroeconomic environment and gradually meet 
the agreed convergence criteria.  The EAC c onvergence criteria are based on strong economic 
growth (7 per cent), reorganization of public fina nces (6 per cent deficit excluding grants and 3 per 
cent including grants), reining in inflation to be low 5 per cent, stabilizing exchange rates, ensuring 
sustainable reserves (four months) and reducing indebtedness. 
III. BURUNDI'S TRADE POLICY OBJECTIVES 
(1) I
NTRODUCTION  
61. Since Burundi's last Trade Policy Review in 2003, the authorities have taken important steps 
to clarify the country's trade policy objectives.  The recent trade policy initiatives at regional level and 
legislative and regulatory developments reflect the Government's clear political commitment to 
improving Burundi's trade performance and investment climate. 
62. The future directions of Burundi's trade and investment policy are set out in particular in the 
"Burundi 2025" vision document, the Growth and Poverty Reduction Strategy Paper (GPRSP II) and 
the 2012 updated Diagnostic Trade Integration Study (D TIS).  Other sectoral strategy documents have 
also been adopted by the Government.  The main el ements of this trade and investment strategy will 
be implemented in conjunction w ith other subregional lines of action, particularly within the EAC 
and COMESA.  The overall goal pursued by the Burundi authorities is to ensure that trade 
liberalization contributes to economic development and poverty reduction.  In particular, they are 
seeking to ensure that the people derive the bene fits of greater openness in regional and multilateral 
trade through strong economic growth, job cr eation and a wider choice of better quality 
consumer products. 
63. It is within the East African Community (EAC ) that Burundi has made the most significant 
progress in terms of regional trade integration;  a nd it is expected that this regional integration 
process will be strengthened in the years ahead  through the establishment of an economic 
and monetary union and a political federation.  Wi th a view to consolidating the progress made, 
the Government intends to undertake rigorous follow- up of the steps that remain to be completed, 
namely:  (i) full operationalization of the common mark et protocol in terms of its four freedoms and 
the rights ancillary to the right of establishment and of residence;  (ii) harmonization of national laws WT/TPR/G/271 Trade Policy Review 
Page 18 
  
  for the implementation of community law, particularly in the key fields of immigration, trade, finance, 
investment, security, governance and food security;  (iii)  continued liberalization of trade in services;  
(iv) negotiations on the protocol of the Monetary Un ion;  and (v) the continuation of negotiations in 
the context of the EAC-COMESA -SADC Tripartite Agreement. 
64. The Government considers that trade and i nvestment policy should make it possible to 
overcome both the natural (landlocked situ ation) and structural weaknesses of the 
Burundian economy.  The Government is currently negotiating preferential trade agreements, within 
the EAC, with the European Union (EPA), to be  followed by negotiations with the United States 
(Agreement on Trade and Investment), China, India, etc. 
65. Burundi uses transparency mechan isms for the design and implementation of its trade policy, 
which significantly contribute to identifying and eliminating barriers to international trade and investment.  In addition to the National Forum for Development and Trade Policy (FNDPC), 
a framework for dialogue between the public and private sectors has been established, 
thereby reinforcing the national discussion framework  on the monitoring and implementation of trade 
and related policies.  Since Burundi's last review  in 2003, the authorities have pursued a programme 
of lifting tariff and non-tariff barriers to trade in  goods and services, including the trade-related 
aspects of intellectual property rights.  Burundi h as also established a national committee to monitor 
the mechanism for identifying and eliminating non-ta riff barriers (NTBs), and participates actively in 
the EAC regional forum on NTBs. 
(2) B
URUNDI AND THE WTO 
66. The World Trade Organization (WTO) and the multilateral trading system are central to 
Burundi's trade policy, as the national authorities cons ider that a system based on international rules 
provides the best guarantee that the commercial exch anges between countries of any size or level of 
development remain open and fair, a nd that prosperity accrues to the greatest number.  By virtue of 
the provisions on special and differentiated treatment (SDT), Burundi intends to enhance the benefits 
derived from the WTO system and from the ongoing negotiations under th e Doha Development 
Agenda (DDA).  It attaches importance to the agri culture negotiations, particularly as regards market 
access for its exports through the ma intenance of SDT, as well as recourse to a system of stabilization 
for world prices of agricultural raw materials.  Bu rundi also hopes that the Doha negotiations will 
serve to resolve the issue of the agricultural s ubsidies that the developed countries (mainly the 
United States and the EU) grant to their farmers, to the detriment of the LDCs. 
67. Since its last review in 2003, Burundi, as an LDC, has continued implementing the 
WTO agreements, even though numerous reforms remain  to be introduced with a view to achieving 
WTO consistency.  At the same time, the negotiatio ns on the liberalization of trade in services at the 
regional level (COMESA and EAC) and the other ongoing trade negotiations, particularly on the 
Economic Partnership Agreements (EPA) with the European Union and the Agreement on Trade and 
Investment with the United States, are proceedi ng in conformity with the multilateral rules of 
the WTO. 
68. Lastly, Burundi intends further to enhance its capacities in respect of knowledge of the 
WTO system and, to that end, wishes to receive  continued technical assistance from the WTO and 
other partners active in the s phere of trade-related aid. East African Community WT/TPR/G/271 
 Page 19 
 
 
 (3) SECTORAL TRADE POLICES  
(a) Agriculture 
69. Agriculture remains the central pillar of the Burundian economy, accounting for nearly 43 per 
cent of GDP in 2010 and employing 90 per cent of the country's workforce.  The bulk of export 
revenue is derived from the primary sector.  Burund i adopted a national agricultural strategy (SAN) 
in July 2008, covering the period 2008-2015.  The SAN is aimed at supporting the efforts of the Government and its partners to combat poverty an d restore food security.  The strategy, which was 
developed by the Ministry of Agriculture and Li vestock, also takes account of the guidelines 
developed by the GPRSP, the MDGs, the compre hensive agriculture development programme of 
NEPAD, and the EAC development policy. 
70. The overall goal of the authorities is to reha bilitate the tools of production and stimulate 
sustainable development in the agricultural sector.  The specific aims of the SAN concern the growth 
of agricultural production and development of sust ainable production systems;  the promotion of 
agribusiness which should expand the sector's res ources from US$120 million to US$200 million;  
the reduction by half of the poverty rate (from 70 to  35 per cent) by 2015;  the professionalization of 
producers and the development of private initiatives;   and finally, the building of management and 
sustainable development capacity in the agricultura l sector.  These specific objectives are linked to the 
four priority lines of action of the strategy. 
71. The diversification of subsistence agriculture  is a key requirement.  Given the population 
trends and the dearth of land, Burundi is planning  to move away from subsistence agriculture which 
generates too little income per unit of land.  This process will of course be a lengthy and costly one, 
but the Government intends to make an immediate start, relying on a detailed study of markets and 
potential products.  It has been found that Burundian products are not yet competitive on the regional 
and international markets.  Neve rtheless, under the Poverty Reduction Strategy Paper (PRSP) and the 
National Agricultural Strategy, sectors and products have been identified that have major export 
potential, and the key interventions for the purpose of facilitating diversifi cation and enhancing the 
contribution of other sectors, such as horticulture and fisheries, concern the creation of cargo space for 
the export of fresh products and compliance with sanitary and phytosanitary (SPS) standards. 
72. With regard to the marketing of coffee, the country's main export product, the authorities are 
continuing their privatization plan.  A regulator y agency has been established, as have an 
interprofessional association and mechanisms to  facilitate access to funding and improve coffee 
processing practices. 
(b) Industry 
73. The industrial fabric of Burundi remains weak.  It comprises import substitution industries, 
mining and agro-industries.  Generally speaki ng, Burundi's industrial sector is not very 
well developed and contributes roughly 5 per cent to GDP;  moreover, it has to face various 
constraints, including obsolete equipment and t echnologies, underutilization of installed capacity, 
low competitiveness, inadequacy of  energy capacity and a relatively high tax burden.  Since 2005, 
however, a steady improvement has been observed in the weighted index of industrial productivity, 
which rose from 91.8 to 98.2 in 2008 and 100. 7 in 2010.  The industrial production index is 
significantly higher in the agrifood and chemical industries. 
74. The Government of Burundi, through the Ministry of Trade, Industry, Posts and Tourism, has 
recently launched a national industrial and trade development strategy aimed at diversifying the WT/TPR/G/271 Trade Policy Review 
Page 20 
  
  national economy and making industry the engine of economic growth.  It provides for the 
establishment of the necessary conditions for the transition from agriculture to a modern and 
competitive economy.  The proposed strategic options include the effective participation of national 
stakeholders, strengthening the institutional capac ity of Government departments, improving the 
business climate, strengthening support networks for th e private sector and developing infrastructure.  
The strategy accords pride of place to the development of agro-industry. 
75. The Government's main long-term objectives re late to four major areas:  revival of 
industrial activities;  promotion of growth-orien ted sectors;  acceleration of measures to reduce 
constraints relating to administrative procedures;  and strengthening of the legal and institutional 
framework governing industrial property. 
(c) Financial sector 
76. By virtue of Order No. 540/785 of 18 May 2010, the Burundi Ministry of Finance established 
a national committee to draw up a national development strategy for the financial sector.  The strategy 
was finalized in December 2010 and covers the period 2011-2017. 
77. The Government's aim is to contribute to the de velopment of a healthy, robust, efficient and 
inclusive financial sector serving the development of the private sector, economic growth and poverty 
reduction.  To that end, the authorities wish to b ase themselves on four main strategic priorities that 
are consistent with GPRSP objectives. 
78. The first strategic priority concerns incr easing the stability and transparency of the 
financial sector.  The regulation and supervision of banks, micro-finance institutions, insurance 
companies and social security institutes will be stre ngthened.  Monitoring activ ities will be separated 
from promotion activities to prevent personal conflic ts of interest.  The former will be assigned 
exclusively to the control authorities, and the latte r to the ministries, professional associations and the 
operators themselves.  The Government sees transparen cy as essential to ensuring  the efficiency of the 
sector and protecting savers, calling for combined efforts by the authorities and operators. 
79. The second strategic priority concerns the deve lopment of infrastructure.  It is necessary 
in particular to establish a reliable and effici ent payment system which will be the basis of 
all financial transactions.  The deve lopment of financial markets is e xpected eventually to complete 
the infrastructure. 
80. The third priority is defined as "consolidating the financial sector".  The aim here is to ensure 
better access to financial services at a reasonable cost, particularly for SMEs, farmers and 
the underprivileged;  access to long-term resources  and housing finance by means of appropriate 
instruments.  Another requirement is to promot e the dynamism and interaction of the different 
categories of financial institution so as to enhance the penetration of financial services, to develop 
existing institutions, to open up the sector to ne w institutions and to prom ote the introduction of 
new instruments.  In this context, an expanded role  for the private sector in financial matters will be 
encouraged so as to strengthen the intermediation of funds and risks.  The State will retain the 
important role of regulating and s upervizing institutions.  It will act to facilitate the development of 
such institutions. 
81. Finally, the fourth and last priority con cerns improvements to the legal and judicial 
framework, a key element to ensure the stability  and deepening of the financial sector by 
strengthening the enforcement of  contracts and debt recovery. East African Community WT/TPR/G/271 
 Page 21 
 
 
 (d) Telecommunications 
82. Since the last review, Burundi has been untir ing in its efforts to establish favourable 
conditions for the development of telecommunication services.  The sector has now been fully 
liberalized and the improved business climate, togeth er with the Government's political determination 
to promote the telecommunications/ICT (information and communication technologies) sector, have 
produced a situation in which Burundi today has two fixed telephony operators (wired services by the 
incumbent operator ONATEL and wireless services by the private operator UCom), six GSM mobile 
telephony operators (ONATEL, UCom, Africell, Econet Wireless, Lacell SU and Hits Telecoms) with 
more than a million total subscribers, six Intern et service providers, 20 or so national broadcasting 
stations, international radio stations, such as RFI, BBC, etc. 
83. The telecommunications subsector is booming in Burundi.  Thus, the number of fixed 
telephony subscribers rose from 23, 851 in 2003 to 31,515 in 2009, an increase of 31.5 per cent.  
More than 90 per cent of subscribers are concentr ated in urban areas, mainly in Bujumbura;  
while only one per cent of the population has access to  the Internet.  There has been an explosion 
of growth in the mobile telephony market, which has also benefited from liberalization, the number 
of subscribers having risen from 64, 000 in 2003 to 1,150 million in 2010. 
84. The conditions favourable to investment and the promotion of telecommunications and ICT 
have been made possible by sound basic legisl ation governing the sector (Decree-Law No. 1/011 
of 4 September 1997) which provided for the separat ion of policy and regulatory functions, assigned 
to the State, and operational functions assigned to public and private operators. 
85. Given the dynamism of this sector, the tec hnological developments during the period under 
review, and the constant changes in the global enviro nment, the goals pursued at national level call for 
the adjustment, or even harmonization, of teleco mmunication and ICT policies.  Burundi's awareness 
of this situation led in February 2007 to the ela boration of a national policy for the development of 
information and communication technologies (IC T) for the period 2007-2011, based on the 
updated 2004 strategic ICT plan, the sectoral polic y of the Ministry of Transport, Posts and 
Telecommunications, the GPRSP and the "Burundi 2025" vision.  This policy is meant to reflect the 
Government's vision for the creation of ideal condi tions for the mobilization of human, financial 
and technological resources so as to  ensure the inclusion of all sectors of the information society.  
The six key areas on which the Government has chosen  to focus its efforts are the strengthening of 
human capacity, improvement of th e legal and regulatory environmen t, promotion and strengthening 
of basic infrastructure development, promotion of private investment, and promotion of the 
development of content and applications. 
86. In this connection, Burundi recently undertook a re view of its legislation in order to adapt to 
the new regional and global environment.  Thus , several draft laws are currently awaiting 
transmission to the competent ins titutions for analysis, adoption and/or promulgation by the President 
of the Republic before moving on to the implemen tation stage.  These texts include the new ICT 
development policy, the law on electronic communications and posts. 
87. The new ICT development policy is the logical successor to the one adopted by the 
Government of Burundi for the period 2007-2011, the implementation of which was delayed by a 
number of circumstances.  The new policy cove rs a relatively long period, from 2010 to 2025.  
The new law on electronic communications will be followed by seven draft implementing decrees, the 
provisions of which relate inter alia  to universal service, management of scarce resources, network 
management and telecommunication services. WT/TPR/G/271 Trade Policy Review 
Page 22 
  
  88. The development of information technology has led the authorities to focus on security for 
network users and consumers of information technology services.  A draft law on the information 
society is also on the list of new draft legislative texts requiring analysis.  The draft law is based on the recommendations of the EAC sectoral council on transport, communications and meteorology.  
It is designed to deal with electronic transactions , digital signatures and authentication, security and 
computer crime, data security and protection of  privacy, intellectual property rights, electronic 
taxation and finally, competition and information management. 
89. In order to ensure the development of its  telecommunications/ICT sector, Burundi has 
received various forms of support from the Intern ational Telecommunication Union (ITU) and other 
international cooperation organiza tions.  Priority projects under way include the McCAW-ITU project 
designed to connect the schools and hospitals of ten provinces in Burundi to the high-speed Internet network, and the national optical fi bre backbone project, Burundi Backbone System, 
supported by the World Bank.  The authorities cons ider these projects as an important step towards 
reducing the digital divide, par ticularly between urban centres and rural areas, and in ending 
Burundi's digital isolation. 
90. Lastly, Burundi recommends that the international community should renew its support for 
the LDCs, countries in post-conflict s ituations and developing countries in general.  It also supports 
all resolutions in favour of the restoration of damaged telecommunication networks and services in 
countries affected by natural disasters, earthquak es, landslides, droughts, hurricanes, cyclones, floods 
and any other forms of damage cau sed by current climate changes. 
(e) Transport 
91. In view of its landlocked status, transport devel opment is one of Burundi's top priorities in the 
area of socio-economic development.  With a ro ad network of 7,059 km and given the presence of 
Lake Tanganyika, the authorities intend to develop a combination of road, lake and air transport.  
Several modernization and mainte nance programmes have been initia ted, including the establishment 
of the National Highway Fund and the Equipment Rental Agency. 
92. The Government's main objectives are to ope n up access to rural areas, strengthen the 
competitiveness of national producers a nd encourage regional integration. 
93. In the context of the diversification of access  routes, the Government is paying particular 
attention to the forthcoming extension of the rail link between the United Republic of Tanzania 
and Burundi. 
(f) Mining and energy 
94. Burundi has a relatively varied potential in the area of mining activities, which are expanding 
rapidly.  The main products are nickel and related minerals, namely copper, cobalt and metals of the 
platinum group, vanadium, cassiterite, columbite -tantalite, wolframite, gold, various industrial 
minerals and trace hydrocarbons.  Mineral prosp ecting activities are currently being conducted for 
gold, nickel and hydrocarbons, pursuant to the va rious agreements signed by the Burundi Government 
with certain mining companies. 
95. Virtually all mining activity is conducted on a small scale, for the production of coal, 
cassiterite, columbite-tantalite and wolframite.  Th ese substances are produced by approved mining 
syndicates.  There are also approved syndicates for the purchase and export of minerals.  Small-scale East African Community WT/TPR/G/271 
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 mining is currently considered a highly labour-inten sive activity, employing more than 50,000 miners 
on several sites around the country and providing a livelihood for more than 250,000 people. 
96. The tax exemptions, particularly on VAT, granted to operators in the mining sector are 
designed to promote private-sector investment.  However, mining activities still contribute very 
little to national output and the balance of paym ents.  In 2010, the mining sector accounted for 
only 3 per cent of export earnings and 1 per cent of GDP. 
97. The authorities have undertaken a wide-ranging re form of the legal and regulatory framework 
governing the mining sector, including a revision of the previous Mining Code (Decree-Law 
No. 1/138 of 17 July 1976).  Th e ongoing development of a sectoral policy is an important step 
towards improved management of the country's energy and mining resources.  These measures will 
contribute to creating a more inv estor-friendly business climate in th e long term.  In the short and 
medium term, the aim of the authorities is to suppor t the exploration, exploitation and processing of 
mineral resources, while safeguarding the environment, and to improve the efficiency of small-scale production.  Government measures will include the strengthening of technological capacity and 
education and training on environmental issues. 
98. In the field of energy, Burundi's capacity is inadequate.  The protracted period of 
socio-political instability substantially altered the systems of energy production and distribution.  
Burundi currently has a total energy capacity of  50 MW and domestic a nd regional hydroelectric 
resources (roughly 1,700 MW of which only 300 MW is exploitable) provide 90 per cent of 
electricity.  According to the results of the 2007 investment policy review, 72 per cent of enterprises 
in Burundi have identified inadequa te energy supply as a chronic constraint on the development of the 
private sector. 
99. The electricity sector has not yet been fully lib eralized in Burundi and most electricity is 
produced and distributed by the State-owned co mpany REGIDESO, which has seven hydroelectric 
power plants with a total capacity of 30.6 MW.  However, total annual electricity supply has increased 
substantially over the past four years, from 189 GWh in 2007 to 242 GWh in 2010.  REGIDESO 
supplies electricity to a total of 66,540 households
11, representing some 2 per cent of the country's 
total population, which is well below the average of 16 per cent for sub- Saharan Africa and the 
average of 41 per cent in other low-income de veloping countries.  A diagnostic study of the 
infrastructure system in Burundi, conducted in 2009 , and various other studies forecast an increase in 
electricity demand of between 8 and 12 per cent per year.12  Electricity demand should increase 
by 10 per cent on average per year for households , by an average of 3 per cent per year for 
administrative buildings and by an average of about 2 per cent for private enterprises.  In addition, 
Burundi would need an additional capacity of 150 MW to provide sufficient power to mining enterprises. 
100. With World Bank support, the Burundi Governme nt has launched a reform programme in the 
energy sector, aiming to improve the results of the State-owned electricity and water distribution 
company (REGIDESO).  The restructuring and recapitalization of REGIDESO was completed 
in 2008, followed by the signing of a five-year  performance contract between REGIDESO and the 
Burundian Government.  The performance contract im poses detailed obligations on each of the parties 
with a view to ensuring the financial efficiency of REGIDESO.  At the same time, as recently as 
June 2011, electricity prices, which had remained unchanged for 20 years, were revised upwards and 
even doubled for some categories of operators.  The authorities expect that these adjustments will 
                                                      
11 REGIDESO (2011), Annual Report 2011. 
12 Burundi Tariff Study (2010), and Burundi Infrastructure Action Plan (2009). WT/TPR/G/271 Trade Policy Review 
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  make it possible to strengthen the system of infrastru cture in the sector, increase imports of electricity 
from the subregion and meet agreed multilateral commitments. 
(g) Tourism 
101. Compared with its immediate neighbours (Kenya, United Republic of Tanzania, and 
even Rwanda), the tourism sector in Burundi remain s very undeveloped.  Visitor levels are low, 
with statistics showing 192,000 recorded visitors in  2007.  It is estimated that only 9 per cent of 
international arrivals at Bujumbura airport are recr eational tourists, that is, roughly 5,000 persons for 
the period 2009-2010. 
102. In 2011, Burundi adopted a 2011-2021 nationa l strategy for the sustainable development 
of tourism, to be implemented by the Ministry of Trade, Industry, Posts and Tourism, with the 
support of the United Nations Development Pr ogramme (UNDP).  Through this strategy, 
the Burundi Government affirms its resolve to  open up the country and ensure sustainable 
development of tourism as an effective regional planning instruments and a means of strengthening 
the private sector.  The authorities have as their am bition to enable the tourism sector to contribute 
to poverty reduction and the consolidation of peace through development and employment 
possibilities that may be created throughout the country. 
103. The strategy seeks to create a development fra mework for the planning, development, 
promotion and management of the tourism sect or, based on existing potentialities, resources and 
opportunities. 
104. The three strategic lines of action identified concern the strengthening and development of 
domestic tourism, the identification and exploitation of niche tourist markets and the development of 
regional cooperation. 
(4) BILATERAL AND REGIONAL TRADE RELATIONS  
(a) Relations with the European Union 
105. Burundi shares a long-standing trade relationship with the European Union, which continues 
to be its principal export destination.  In 2010, Buru ndi's exports to the EU accounted for 31 per cent 
of total exports, compared to 22.8 per cent for A frican countries, 10.6 per cent for countries of the 
Middle East, and 8.4 per cent for Asia. 
106. As a least developed country, Burundi benef its from the European Union's Everything But 
Arms initiative, and since November 2007 has been  negotiating an Economic Partnership Agreement 
with the EU within the EAC. 
107. While working to diversify their trading partne rs, the Burundi authorities intend to strengthen 
economic and trade cooperation with the EU in the coming years. 
(b) Other existing bilateral trade agreements 
108. Burundi has concluded bilateral economic, trad e and technical agreem ents with certain 
countries in Africa and Asia, as well as the United States.  The objective pursued by the authorities is 
to promote trade and diversify trading partners. East African Community WT/TPR/G/271 
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 109. Thus, Burundi has received benefits under th e US Government's African Growth and 
Opportunity Act (AGOA) initiative since 2006. 
(c) Regional trade arrangements 
110. Over the years, Burundi has for various reasons  joined certain regional integration initiatives, 
including the International Conference on the Great  Lakes Region (ICGLR), the Nile Basin Initiative, 
the Lake Tanganyika Authority, the Economic Community of the Great Lakes Countries (CEPGL), 
the Economic Community of Central African Stat es (ECCAS), the Common Market for Eastern and 
Southern Africa (COMESA) and the East African Co mmunity (EAC).  Within the EAC, Burundi has 
since October 2008 been negotiating an SADC -COMESA-EAC Tripartite Agreement for the 
establishment of a free trade area betw een these three regional communities. 
111. The Government is currently planning to rationa lize its participation in the different regional 
organizations and to derive greater benefit therefro m.  In this connection, a national strategy for 
regional integration is being launc hed by the Ministry in the President's Office responsible for 
East African Community affairs, with technical and financial support from UNDP.  Ultimately, the 
aim of the Burundi authorities will be to identify the strong and weak points of each of the regional 
initiatives and decide whether or not to continue participating in them. 
IV. TRADE POLICY PROSPECTS 
112. Burundi plans to take an active part in the strengthening of the regional integration process 
within the EAC and COMESA.  Thus, the auth orities intend to harmonize national laws and 
regulations with the regional protocols, while con tinuing to negotiate matters that remain outstanding, 
such as services and the EEC Monetary Union. 
113. Burundi's participation in COMESA has given it access to a large market of 19 countries with 
a total population of 400 million.  Burundi joined  the COMESA free trade agreement in 2004 and 
subsequently took part in the establishment of th e COMESA Customs Union which should come into 
effect for all countries in mid-2012.  With regard  to the EPA currently under negotiation between the 
EU and the EAC, Burundi hopes that the negotia tions will conclude shortly with guarantees for 
economic cooperation and the development of the EAC countries, and with flexible rules of origin 
conducive to the growth of exports from the EAC to the EU. 
114. Burundi will continue to promote the liberali zation of world trade and participation in a 
multilateral trading system that is beneficial to all.   In this connection, the authorities will continue 
implementing the WTO agreements while strengthe ning regional trade cooperation in a manner 
conducive to multilateral openness.  Burundi is also  committed to achieving greater transparency in 
the multilateral trading system and will participat e in WTO work to that end, particularly under 
the Trade Policy Review Mechanism.  The Burund ian authorities consider that the WTO dispute 
settlement system remains essential to guaranteeing th e stability of the world trading system, and its 
judicial features should be overhauled to encourag e and facilitate the participation of the least 
developed countries. 
115. Lastly, Burundi intends to continue developing its trade policy through the monitoring and 
implementation of GPRSP II and the recommenda tions of the Diagnostic Trade Integration 
Study (DTIS). WT/TPR/G/271 Trade Policy Review 
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  V. TECHNICAL ASSISTANCE AND CAPACITY BUILDING 
116. The goals of the Aid-for-Trade programme in Burundi are to increase supply capacity through 
the diversification of imports in order to enhance Burundi's economic integration into world trade and 
promote the achievement of its poverty reduction objectives.  Aid for Trade is intended to be 
additional and to take into account the need to bu ild supply capacity in the beneficiary countries.  
In Burundi, the Growth and Poverty Reduction Strategy Paper (GPRSP) is supported by the 
community of bilateral and multilateral donors, whic h are increasingly directing their support to 
national trade-related priorities. 
117. Since 2003, Burundi has benefited from severa l technical assistance and capacity building 
programmes for the purpose of developing its trade,  diversifying its economy and reviving growth.  
Thus, in the hierarchy of programmes under the GPRSP, Aid for Trade occupies third position and accounted for 18 per cent and 23 per cent of the total volume of official development assistance (ODA) granted to Burundi in 2007 and 2008, resp ectively.  This aid was directed mainly to 
supporting infrastructure for production, road cons truction, agriculture and the environment.  
The Integrated Framework (IF) has been present in Burundi since 2002 and is today called the 
Enhanced Integrated Framework (EIF);  it has contributed to the funding of projects in support of 
export diversification and the updating of the Dia gnostic Trade Integration Study (DTIS) in 2012. 
118. The Government of Burundi needs increased assi stance from development partners in order to 
implement its trade policy reforms, in accordance wi th the GPRSP, the various sectoral development 
strategies and the recommendations made in the upda ted DTIS.  The areas in which Burundi wishes to 
obtain supplementary Aid for Trade and to st rengthen national capacities are the following: 
 - Continued reform of the legal a nd regulatory trade-related framework; 
 - strengthening of support bodies and promotion of trade;  - export diversification;  - elimination of non-tariff barriers (NTBs);  - liberalization of trade in services; 
 - collection and processing of commercial and industrial data; 
 - development of infrastructure to facilitate trade;  - establishment of quality control and testing laboratories;  - adoption and application of techni cal standards and rules (TBT and SPS); 
 - trade-related aspects of intellectual property rights; 
 - regional and multilateral trade negotia tion techniques and strategies;  and 
 - national coordination mechanisms for the monitoring of trade negotiations East African Community WT/TPR/G/271 
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 REPORT BY KENYA 
I. BACKGROUND 
1. Kenya is in the process of implementing its broad over-arching l ong-term development 
framework, Kenya Vision 2030, aimed at setting the country towards the path of sustained high levels 
of inclusive economic growth and attainment of middle income country status by year 2030. The 
Vision is based on three “pillars”, Economic, Social and Political.  To realize socio-economic transformation, the three pillars are anchored on six foundations namely: infrastructure; science 
technology and innovation; land reform; human re source development; security and public service 
reform. 
2. The Vision is being implemented in successive, five-year Medium-Term Plans.  The first such 
plan covered the period 2008–201 2 while preparation of the sec ond one, covering the period 2013-
2017, is ongoing.  The, implementation of the Vision has led to tremendous investments in infrastructure and reforms in a broad array of sectors. 
3. Vision 2030 offers a long term perspectiv e to development programming, identifying 
"flagship" projects as priority intervention areas w ith maximum long term national returns.  Under the 
Political pillar Kenya enacted the Kenya Constitutio n 2010 which provides the legal framework for 
much of the far-reaching proposals under Vision 2030. 
4. The Constitution is the supreme law of the land. It has brought many reforms in various 
sectors including inter alia  aspects of land and environmental ri ghts, protection and management of 
natural resources, intellectual property rights, and equitable development of resources.  Reforms are 
also evident in use of public finance and pr ocurement and borrowing by the Government.  The 
constitution also establishes an Equalization F und to improve access to basic needs by the 
marginalized communities.  Furthermore, it has set out a clear distribution of functions between the 
National and County governments in several areas in cluding; foreign affairs, international trade, 
national economic policy and planni ng, monetary policy, education, transport and communication, 
tourism, trade development and regulation. Th e Constitution implementation process is ongoing with 
various laws undergoing review and amendment and new Acts of Parlia ment being developed to cater 
for various reforms as per the Constitution.  
II. ECONOMIC PERFORMANCE 
(1) M
ACROECONOMIC PERFORMANCE  
5. The growth objectives underpinning Vision 2030 envisages the rate of growth of the economy 
to rise from 6.1 per cent in 2006 to 10 per cent by 2012/13  and to sustain that th ereafter.  In the last 
five years, the economy has registered mixe d performance, growing at 7 per cent in 2007 
and 1.5 per cent in 2008.  The slowdown in 2008 was caused by a number of internal as well as external shocks. In 2009 the economy demonstrated  strong resilience, growing by 2.6 per cent 
and 5.6 per cent in 2010.  This growth was supporte d by a stable macroeconomic environment, as 
well as a boom in inter alia  wholesale and retail trade, transport and telecommunication, financial 
intermediation, building and construction and agricu lture.  In 2011 the economy grew by 4.4 per cent. 
The decline in economic growth in 2011 is attribut able to high inflation and depreciation in the Kenya 
shilling.  The overall inflation rate stood at 19 per cent in November 2011, but has since declined 
to 10 per cent in June 2012.  The implementation of Vision 2030 has led to tremendous investments in 
infrastructure and reforms in a broad array of sectors. WT/TPR/G/271 Trade Policy Review 
Page 28 
  
  (2) MACROECONOMIC OUTLOOK  
6. Kenya's Real GDP is expected to grow by 5.2 per cent in 2012.  Over the medium term, 
growth is expected to pick up to about 6 per cent.  In terms of fiscal years, the projections translate 
to 5.5 per cent for 2012/13, 5.9 per cent for 2013/14  and 6.3 per cent for 2014/15.  Growth will be 
bolstered by continued expansion in agriculture, t ourism, construction, transport and communication, 
and ICT.  While exports will conti nue to benefit from the relatively strong growth in the sub-region, 
new measures will be introduced to diversify and promote Kenya's exports globally, especially export 
of services in the medium term. 
III. SECTOR SPECIFIC PERFORMANCE 
(1) AGRICULTURE , LIVESTOCK AND FISHERIES SECTOR  
7. Agriculture continues to be an important sect or to the economy contributing 24.2 per cent to 
the GDP.  In 2010 the sector expanded significantly with a real growth of 6.5 per cent mainly due to Government's intervention through provision of farm inputs, increased exports and favourable 
weather conditions.  The trend is set to improve further. 
8. In the last ten years, over 20 policies and legisl ations have been developed and reviewed to 
conform to recent economic trends and are now be ing implemented.  Among these are the National 
Seed Policy, National food and Nutritional Policy, National Agriculture Sector Extension Policy and 
the Agriculture Sector Development Strategy.  A revi ew of soil fertility and fertilizers is being done to 
come up with policy guidelines.  Other subsector Acts  have also been reviewed to conform to changes 
in the economic environment.  These include Coff ee Act, Cotton Act, Sugar Act, Tea Act and the 
Pyrethrum Act, horticulture, cereals, roots and tubers  and the oil crops.  The Government’s focus is on 
research and extension services, farmer training, mechanization services, and increasing agricultural 
productivity.   
9. A new ten year Agriculture Sector Development Strategy (ASDS) 2010-20 has been 
developed to address key issues such as food security, poverty reduction, transformation of agriculture 
from subsistence to commercial farming, markets, ef ficient use of inputs and agricultural credit.  This 
strategic focus will enable the sector to achieve th e 10 per cent growth envisaged in the Vision 2030.  
The Government is spearheading initiatives to re duce the high cost of fertilizers that impacts 
negatively on agricultural production.  This is e xpected to increase utilization of fertilizers.  The 
strategy involves improved coordination of bulk buyi ng, provision of incentives for local blending, 
and eventually the exploration for local production of the fertilizers.  
10. Since the last review of Kenya's trade policy in 2006, the animal resource sector has 
continued to play its role in provision of liveli hoods, food security and trade.  A livestock census was 
carried out in 2009 alongside the human census which indicated that the country has approximately 98 million domesticated livestock (cattle, sheep, goats, pi gs, donkeys, camels and chicken).  The main 
traded commodities locally and internationally ar e live animals of various species, meat, dairy 
products, honey, hides, skins and leather.  In line with Vision 2030, establishment of a flagship project 
on animal disease-free zones is on-going as provided in Article 6 of the World Trade Organization's Agreement on the Application of Sanitary and Ph ytosanitary (SPS) Measures and World Organization 
for Animal Health (OIE) standards.  
11. The Fisheries Act Cap 378 and its subsidiary regulations and the Maritime Zones Act Cap 
371 are the principle statutes that regulate and govern  fisheries in the country.  In December 2008, the 
Cabinet approved the National Oceans and Fisheries Policy whose overall aim is to guide sustainable East African Community WT/TPR/G/271 
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 development of the fisheries sector in an effective and coordinated manner and also to ensure that the 
sector contributes adequately to the achievement of Vision 2030.  The fisheries sector plays a significant role in the social and economic devel opment through the sector’s positive contribution to 
employment creation, revenue gene ration and food security all of which are crucial for the attainment 
of the Millennium Development Goals.  The sector  currently contributes about 0.5 per cent to the 
country's Gross Domestic Product (GDP).  
(2) M
ANUFACTURING  
12. The manufacturing sector has continued to grow by an average of 3.8 per cent over the last 
five years.  In the year 2011, the sector grew by 3.1 per cent compared to 4.5 per cent in 2010 on 
account of stable macroeconomic conditions, im proved access to affordable credit, better 
infrastructure and enhanced regional market access.   The Government has continued to lay greater 
emphasis on the manufacturing sector as one of the key drivers to achieving its Vision 2030.  The sector has continued to be a large foreign excha nge earner through exports to other countries.  
13. The Government has finalized the developmen t National Industrialization Policy framework 
which is aligned to the regional Industrialization Policy and Strategy to ensure predictability in the 
manufacturing sector.  The policy identifies 22 subsectors for promotion and is geared towards 
driving Kenya into becoming a newly Industrializ ing, globally competitive, middle income and 
prosperous nation with a high quality of life by 2030 .  In the short and medium term, the country will 
continue to grow its regional market share of  manufactured goods from the current 8 per cent 
to 15 per cent with the gradual reduction in non-tari ff measures within the East African Community 
and COMESA.  
(3) M
INING  
14. The National Mineral Resources and Mining Policy is in the process of being enacted to 
replace the Mining Act of 1940 and provide a framework of principles and policies that will guide the Government in the reform of the mining sector .  A policy for the establishment of a National 
Geological Survey to administer the new mining legislation will be developed and the Mines and 
Geological Department, the agency charged with the regulation of the mining sector transformed into 
a Semi-Autonomous Government Agency (SAGA). 
(4) S
ERVICES SECTOR  
(i) Tourism 
15. Tourism is central and crucial to inclusive we alth and employment creation in the country's 
economic growth.  The sector performance conti nued on an upward trend re gistering Kshs65.4billion 
mark and 1.8million international arrivals in 20 07.  Over the review period (2006-11), tourism 
earnings and visitor arrivals increased significantly despite the global economic shock and security 
threats causing a slump in 2008.  Earnings fro m the sector peaked Kshs97.9 billion in 2011 
from 73.7 billion in 2010, while international arrivals rose from 1.6million in 2010 to 1.82 million 
in 2011 representing a 13.3 per cent increase.  Th e steady increases are attributed to Government 
concerted efforts in providing an enabling busin ess environment coupled with successful marketing 
and promotion strategy. 
16. The Government’s tourism development and promo tion strategy in the recent years have been 
targeted at diversification programmes mainly fo r product profile to new niche products such as WT/TPR/G/271 Trade Policy Review 
Page 30 
  
  eco-tourism, cultural tourism, community-based touris m, water-based tourism and sports tourism; and 
source markets as well as venturing into emergi ng markets of Eastern and Asian economies.  
17. The country’s tourism plans under Vision 2030 and the National Tourism Policy (2010) on 
Enhancing Sustainable Tourism in Kenya both target  harnessing opportunities available to tap into the 
rich combination of unique natural tourist biodive rsity assets, cultural heritage and geographically 
diverse landscapes.  The primary goal is to make Ke nyan tourism sector fairly competitive and one of 
the leading top 10 long haul tourist destination offering a high end, diverse and distinctive visitor experience.  
18. The new policy framework is also directed at promoting innovative ways of making Kenya   a 
preferred tourist destination.  The country’s prime parks and key tourism products e.g.  resort cities 
and niche products are earmarked for rebranding to maximize the sector’s multiplier effects and the 
capacity to enhance regional developments, stim ulate demand for locally produced products and 
facilitate provision of environmental goods and ser vices for improved livelihoods of the citizens. 
(ii) Building and construction 
19. The Government has initiated major reforms in  the building and cons truction sector.  The 
reforms in the roads sector have created three au thorities namely Kenya National Highways Authority 
(KENHA), Kenya Urban Roads Authority (KURA) and Kenya Rural Roads Authority (KERRA) to 
oversee the execution of roads projects.  In the housi ng sector there is a proposal to create a National 
Planning and Building Board to develop a more contemporary and respons ive building code to 
regulate construction practice.  The National Cons truction Authority has been established with an 
objective to develop the construction industry throu gh registration and regulation of contractors and 
construction workers and promote capacity building th rough training.  An E-permit system (the first 
in the region) for approval of development plans has been developed.   
(iii) Information and communication technology 
20. The Government recognizes the increasingly critic al role that ICT play in transforming 
economies and societies and driving innovation, growth, productivity and a global measure of 
international competitiveness.  This recognition is en capsulated in the country’s development strategy 
Vision 2030 that puts more emphasis on the ways in which ICT can contribute to the socio-economic development and achievement of the Vision 2030 objec tives.  The Vision of the ICT Policy is to make 
Kenya a world class centre of excellence in ICT.   The Government will realise this Vision through 
developing Kenya as a globally competitive and prosperous nation by creating an enabling 
environment that encourages and enhances the devel opment, expansion and investment in ICT.  The 
guidelines in the ICT Policy are applied to the economic, social and political pillars in the 
Vision 2030 in order to achieve the following obj ectives: innovate for equitable access to services, 
enhance human capacity development, promote loca l content and knowledge de velopment, use ICT in 
poverty reduction, develop innovative financing me chanism and improve governance in the public 
sector. 
21. To achieve the above objectives, the Governme nt has put in place an enabling environment 
for private sector participation through signifi cant liberalization of the ICT sector; creating a 
conducive policy, legal and regulator y frameworks that encourages investment, effective competition 
and innovation; investing in the E-Government  initiatives such as Government Common Core 
Network (GCCN); implementation of the unified  licensing framework which is technology and East African Community WT/TPR/G/271 
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 service neutral; heavy investment in the ICT infrast ructure such as four undersea fibre optic cables1 
that links the country with the rest of the wo rld and National Optic Fibre Backbone Infrastructure 
(NOFBI) through Public and Private Partnerships (PPP).  To  leverage investment in the un-served and 
underserved areas and ensure universal access to ICT services, the Government established the 
Universal Service Fund (USF) in 2009.  The Go vernment has a framework that promotes cyber 
security and electronic transactions and E-commerce; ensures smooth transition from analogue to digital broadcasting, management of  spectrum and digital dividend. 
22. The focus of the Government will be on the establishment of National Data and Disaster 
Recovery Centre to provide a secure information syst em and recovery site; promotion of the software 
and hardware development in order to build skills  and capacity in assembly of hardware components 
and develop software locally; establishment of the ICT Park and Technology City for Business 
Process Outsourcing (BPO) and Information Technol ogy Enabled Services (ITES);  ensure smooth 
transition from analogue to digital television broadc asting through deployment of a digital broadcast 
network to provide signals to broadcasters country wide;  development of the International Teleport 
(Exchange Point) which is a co-location facilit y that will manage both national, regional and 
international fibre network.  The focus will also  be on the development of the national broadband 
strategy and infrastructures, which are beco ming the foundation of networked economies and 
information societies;  ICT capacity building a nd training, ICT research and development;  
development of ICT applications and services and el ectronic content;  and promotion of value added 
services such as incubators, telecentres, call centres amongst others to encourage rapid growth, create 
employment opportunities and promote socio-economic development.  All these efforts are geared 
towards transforming Kenya into information society where everyone has equitable access and 
affordable access to ICT services and ensuring that Kenya becomes a regional ICT centre of 
excellence and knowledge hub. 
(iv) Energy 
23. The energy sector plays a critical role in the socio-economic development of Kenya.  
Petroleum and electricity are the main sources of energy, while biomass is mainly used in rural 
communities and part of the urban population.  Cu rrently the energy sector relies wholly on the 
importation of all petroleum requirements.  However, with the discovery of oil in Northern Kenya this 
trend is likely to change.  Electricity generation is  predominately hydro, supplemented by geothermal 
and thermal sources.  The renewable energy resources though abundant, ha ve not been fully exploited.  
The Government has developed the National Ener gy Policy to encourage exploitation of the 
renewable and other sources of energy among others. 
24. The private sector is currently involved in various economic activities in the energy sector 
such as oil, gas and coal exploration, petroleum distribution and power generation.  The Government will continue to improve the investment environmen t to encourage more investments in the energy 
sector and involvement by the private sector. 
(v) Financial services 
25. Developments within the financial sector ar e guided by the medium-term objectives of the 
financial sector reform and deve lopment strategy embedded in the economic development blueprint, 
Vision 2030.  The Vision 2030 goal for financial servi ces in Kenya is to create a vibrant and globally 
competitive financial sector promoting high levels of savings and financing for Kenya’s investment 
needs.  The Government is therefore committed to developing a vibrant and globally competitive 
                                                      
1 The four fibre optic undersea cables in Ke nya are: TEAMS, SEACOM, EASSY and LION2. WT/TPR/G/271 Trade Policy Review 
Page 32 
  
  financial sector through reforming the banking sector to facilitate c onsolidation, improving coverage 
in pensions sector and deepening capital market s by accessing international capital, streamline the 
informal finance and savings and credit co-ope rative Organizations as well as micro finance 
institutions among others. 
26. Kenya's financial sector is segmented and dualistic  (formal and informal) in structure.  The 
formal financial sector includes; Banking, Pension,  Capital Markets, Insurance, Savings and Credit 
Cooperative Societies (SACCOs), Microfinance Institutions (MFIs), Development Finance 
Institutions (DFIs) like Kenya Post Office Savi ngs Bank (KPOSB) and the Agricultural Finance 
Corporation.  The informal sector on the other hand comprises of  Rotating Savings and Credit 
Associations (ROSCAs) and Accumulating Savings and Credit Associations (ASCAs) among others.  
The sector also consists of financial infrastructur e that facilitates trading, payments and settlements 
systems. 
27. Kenya’s financial sector has witnessed robust growth over the past few years, despite the 
challenging macroeconomic environment.  The sect or posted impressive growth of 7.8 per cent 
in 2011 compared to 2.9 per cent growth in 2006.   This performance was mainly attributed to 
continued growth in the economy coupled with cost  effective and efficient innovations within the 
sector, the banking institutions introduced new fina ncial products that are increasingly relevant to 
small enterprises and low income households, particul arly through the mobile money revolution, the 
adoption of branchless banking models like the ag ency banking model among others.  In addition, 
ongoing regional integration efforts and the incr easing competition in the banking sector saw a 
number of Kenyan banks establish their footprint in  the East African Community Partner States and 
South Sudan.  Similarly, additi onal foreign financial institutions  established physical presence in 
Kenya through establishment of representative offices. 
28. Other notable improvements include: moderniza tion and deepening reforms in the capital 
market including:  significant new equity listings bot h locally  and in the region, key amendments to 
the Capital Markets Act to remove perceived le gal barriers on demutualization of the securities 
exchange, development of new fiscal incentiv es targeting both issuers and investors.  
29. The financial sector is expected to maintain  its growth momentum underpinned by increased 
regional presence of Kenyan banks and the adoption of innovative and cost effective methods of 
offering financial services.  Furthermore the sector will enhance regulatory and supervisory 
requirements such as corporate governance, tr ansparency and accountability, liquidity, loan 
classification and provisioning, capital adequacy requirements, investment, risk management 
frameworks and financial reporting.  The sector will also embrasse key reform measures to improve 
and promote access of formal financial services both in the rural and urban areas.  In addition the 
sector will target improving access to informal businesses, SMEs, Youth and Women groups and different categories of entrepreneurs. 
(vi) Transport services 
30. The transport sector is recognized as a key catal yst in the achievement of the Vision 2030.  
An efficient and fully integrated transport networ k provides a clear competitive edge for products of 
the economy.  Output from this sector ha s grown from Kshs472,659 million in 2007 to 
Kshs693,135 million in 2011, with ro ad transport subsector accounti ng for over 56 per cent.  Kenya's 
Strategic location as a transit hub in the region is an opportunity for the country to become an 
International trade hub.  East African Community WT/TPR/G/271 
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 31. Towards promoting trade and competitiveness of the country, the Government endeavours to: 
promote the development of a seamless multi-modal tr ansport system for freight transport; cooperate 
with regional partners to simplify transport facilita tion instruments; encourage increased participation 
by SMEs in transport business through fiscal incentives to the private sector.  
32. The Government continues to:  simplify admi nistrative and customs procedures to enhance 
speedy cargo delivery such as the establishment of a one stop border post, enhance use of modern ICT 
facilities in the verification of transit cargo and tracking, enhance harmonization of transit cargo 
instruments under COMESA, EAC and IGAD, and eliminate non-tariff barriers such as road blocks, weighbridges, corruption and police escorts, etc. 
IV. PUBLIC EXPENDITURE MANAGEMENT 
33. The new Constitution has introduced fundamental  changes in the management of public 
finance.  Significant changes have also been made in revenue allocation and expenditure management.  
To begin with, the transfer to the counties of 15 per cent of the nationally collected revenues will be 
budgeted for without reference to the national Governme nt or Parliament to spur development at the 
grass root level. 
34. The Constitution provides the guiding principles and a framework for pub lic finance, which 
aims at overhauling and improving policy formulati on and the management of public resources.  
Among the key principles are requirements that there should be: openness, accountability and public 
participation; promotion of equity, meaning that th e tax burden is shared fairly at both national and 
county levels; public expenditure that promotes equitable development and addresses marginalized 
areas and groups; equitable sharing of debt bene fits and burden between current and future 
generations; prudent and responsible  use of public resources; and r esponsible financial management 
with clear fiscal reporting. 
35. Further, some of the oversight institutions have been reorganized  and new independent 
constitutional offices created by splitting the contro l function of the Controller and Auditor General 
(CAG), for example, into two, i.e., the Controlle r of Budget and the Aud itor General to improve 
accountability and transparency in public finance management.  
36. The other key changes are fiscal decentralization, with county governments empowered to 
decide on the use of resources allocated to th em, and the establishment of the Commission for 
Revenue Allocation (CRA).  The CRA is mandated to oversee the allocation of revenues between 
national and county governments and advise the legi slature.  To safeguard the autonomy of county 
governments, the Constitution contains provisions  on public finance issues ranging from guiding 
principles, modalities for the generation and sh aring of revenues betw een national and county 
governments, all the way to reporting and accounting.  Similarly, to consolidate fiscal 
decentralization, the new Constitution establishes a Senate and county legislatures as key institutions 
on matters of county finance. 
V. INVESTMENT REGIME 
37. Kenya's economy is liberalised allowing investments in all sectors of the economy.  
Currently, the country runs two investment re gimes promoting foreign investments and export 
growth.  These are the Export processing zones (EPZs) with various tax holidays;  and the Manufacturing under bond (MUB) sc heme whose investments ope rate under bonded warehouses;  
and attract investment allowances of up to 100 per cent on capital, plant and machinery.  Other 
incentives include VAT and Duty Waiver on Plan t, Machinery and Equipment;  Depreciation WT/TPR/G/271 Trade Policy Review 
Page 34 
  
  allowance of 35 per cent on declining balances a nd Loss carried forward against future taxable 
income.  Special Economic Zones (SEZs) have been identified as one of the flagship projects to help 
achieve the targeted economic growth of 10 per cen t by 2012/13.  SEZs will propel Kenya into high 
levels of competiveness and productivity by focusi ng on activities and service industries that rely on 
high-end technology and skills.  Ke nya has developed a draft SEZs policy and bill that provides for a 
variety of SEZs schemes, activities, licences and ince ntives as well as for the institutional framework.  
The proposed incentives include fiscal, procedural and infrastructural. 
38. Kenya's institutional and legislative framew ork governing investment is embedded in the 
Investment Promotion Act (IPA) of 2004.  It aims at promotion and facilitation of investment by 
assisting investors in obtaining the relevant li cences necessary to invest, and providing other 
assistance and incentives for related purposes.  Inve stors are guaranteed against expropriation under 
the constitution.  Kenya is a member of the Multila teral Investment Guarantee Agency (MIGA), the 
African Trade Insurance Agency (ATIA) and the In ternational Centre for Settlement of Investment 
and Trade disputes (ICSID);  which insure against commercial and political risks; and arbitrate over 
investment disputes respectively. 
39. Investment programmes on expansion and mainte nance of road infrastructure, the railway 
line, energy and investment in capital –intensive sectors like mining and exploration will continue to be priority areas under the Vision 2030.   
(1) F
OREIGN DIRECT INVESTMENT (FDI) 
40. Below is an analysis of investment flows pr ocessed by the Kenya Investment Authority.  
Table 1 presents the number of projects and the cap ital cost processed between 2002 and 2005, table 2 
presents the employment levels generated by the i nvestment in the same period while table 3 presents 
the country of origin and main sectors of investment within the same period. 
Investment projects proce ssed by the Kenya Investment Authority:  2006-11 
Table 1 
Projects details (number of projects and capital costs) 
Source Amounts in Million U.S. dollars 
2006 2007 2008 2009 2010 2011 
World Investment Report 
(UNCTAD) 51 729 96 141 133  
Kenya Investment Authority  1,227.38 156.03 243.6 954.7 928.4 872.2 
 
Source : Figures by UNCTAD and Ke nya Investment Authority.  
Table 2 
Investment flows by sector 
Sector Amount in Millions of U.S. dollars 
2006 2007 2008 2009 2010 2011 
Agriculture  5.21 0.84 4.01 296.30 58.86 5.75 
Construction  - - - 323.47 619.53 230.59 
Energy  - 0.19 - 99.21 0.37 359.84 
ICT -  22.15 33.21 7.64 60.01 
Manufacturing  128.77 40.35 9.44 11.41 13.83 167.46 
Mining  - - 15.42 14.10 202.91 11.34 
Service  1,079.39 85.86 177.23 46.89 25.28 9.46 
Tourism  14.01 28.79 15.35 130.10 16.34 27.78 
 
Source:  Kenya Investment Au thority (KenInvest). East African Community WT/TPR/G/271 
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 Table 3 
Source of investments by country 
Country Amount in Millions of US dollars 
2006 2007 2008 2009 2010 2011 
United States 0.99 0.45 0.68 1.84 0.5 25.81 
Russia 13.36  - 0.18 0.09 2.64 
South Africa 92.94 15.71 27.60 1.23 0.03 18.27 
Greece 2.83 - - - - - 
Belgium - - - 3.52 1.13 - 
Italy 8.81 8.27 15.6 36.38 2.4 - 
Netherlands 0.11 0.45 3.31 0.01 - 1.95 
Philippines - - 0.08    
United Kingdom 819.94 25.33 6.63 250.48 9.16 12.60 
Sweden 0.12 0.19 - 7.7 0.14 0.35 
South Korea 1.24  0.19 - - 2.96 
China 7.87 23.40 0.69 6.34 499.3 53.26 
Turkey - 3.12 - - 1.36 1.44 
India 117.92 2.23 4.7 7 8.03 3.68 
Finland 6.93 - - 2 - - 
Israel - 11.35 - 1.05 49.5 - 
Mozambique - - - - 2.17 - 
Germany 2.02 0.78 0.83 12.18 - - 
Brazil - 0.91 - - - - 
Pakistan 12.44 - - - - 0.84 
Taiwan 0.14 0.89 - - - 59.26 
Canada 2.60 2.76 - 12.76 - 14.52 
Belgium - - - - - 1.53 
France 2.53 - - - 4.96 0.02 
Switzerland 3.72 - 0.29 - 0.82 0.16 
Denmark 1.14 3.24 - - - 0.22 
Uganda 30.30 - - - - - 
Norway 1.01 - - - - 0.11 
Australia - 1.01 - - 198.27 0.53 
Japan - - - 0.17 - 2.35 
Ethiopia 0.91 - - - - 0.10 
Zimbabwe - 0.16 0.82 99.2 0.33 0.08 
UAE 0.22 1.07 - - - - 
Others 97.27 55.06 156.42 616.91 45.62 844.71 
 
Source:  Kenya Investment Au thority (KenInvest). 
(2) LICENSING REFORMS  
41. The Government established a Business Regulator y Reform Unit to  reduce business licensing 
requirements and ensure that they conform to Interna tional best practices    It is expected that the 
streamlined business environment will attract FDI and also lower the cost of doing business and 
encourage the existing business to expand leadin g to increased new domestic investment and 
employment opportunities.  The reforms are intended to transform Kenya into an ideal and competitive investment destination. 
42. As a result reforms, the Government has witnessed  the entry into the Kenyan Market of major 
Multi-national companies such as Nokia, General Elect ric, Microsoft East Africa and the expansion of 
Coca Cola Company, Bhairtel and many more multin ational companies.  Kenya companies are also 
investing in the region and which include commerc ial banks (KCB and Equity), wholesale and retail 
(Nakumatt and Uchumi), real estate and building and construction,  WT/TPR/G/271 Trade Policy Review 
Page 36 
  
  VI. TRADE PERFORMANCE 
(1) DOMESTIC  
43. The trade sector in Kenya has five main components, namely;  distribution and wholesale, 
retail and informal trade, international trade, trad e in services, and electronic trade.  Wholesale and 
retail trade form the largest component of dom estic trade and provide more opportunities for 
employment.  However, data unavailability im pedes critical analysis of this subsector. 
44. Kenya's public policy ascribes a significant role  to the micro and small enterprise (MSE) 
sector.  Both Vision 2030 and the Medium Term Plan 2008-12 underline the multiple roles of the 
sector in creating jobs, accelerating industrial dive rsification and expansion, ensuring equitable 
development, and reducing poverty.  In 2008 ther e was an estimated 34225 MSEs operating in the 
formal sector, accounting for 75.3 per cent of all establishments.  These enterprises employed 
832818 persons (which represents 42.4 per cent of  total formal employment) and contributed 
only 12.2 per cent of the country's manufacturing value added.  A 1999 MSE baseline survey shows 
that the sector’s contribution to GDP was 18.4 per cent. 
45. The Government is deepening the reforms re lating to business licensing and registration, 
aimed at making both services more accessible to MSE players.  The legal environment governing the 
operations of MSEs is being enhanced  through enactment of the MSEs Bill. 
(2) F OREIGN  
46. Kenya’s leading export products include tea, hor ticulture, articles of apparel and clothing 
accessories, and coffee which collectively accounted for 47.0 per cent of the total domestic export 
earnings in 2011.  The country’s key export markets are Africa region (mainly COMESA) and 
European Union, which together absorb about 71 per cent share of total merchandised exports.  The 
major imports include capital goods for industrial use,  namely crude petroleum and oil products and 
crude vegetable oils; and also industrial machinery and transport equipment.  The main sources of our 
imports were Asia region which accounted for 62 pe r cent, mainly United Arab Emirates and India; 
and Europe Union which accounted for 19 per cent of Kenya’s total merchandised imports.  
The table below shows the balance of Trade for the period 2007 to 2011. 
Table 4 
Balance of trade 2007-11 
Description 2007 2008 2009 2010 2011 
Exports 
(Kshs million)  
274,658  
344,947  
344,949  
409,794  
511,038 
Imports 
(Kshs million)  
605,112  
770,651  
788,097  
947,206  
1,315,671 
Balance of trade 
(Kshs million)  
(330,454)  
(425,705)  
(443,147)  
(537,412)  
(804,633) 
Total trade 879,769 1,115,598 1,133,047 1,357,176 1,826,709 
 
Source:  Kenya SURVEY 2012. 
47. Between the years 2007 and 2011, exports increas ed by 86 per cent while imports increased 
by 117 per cent.  Over the period, the Trade ba lance has continually widened from a deficit of 
Kshs330,454 million on 2007 to Kshs804,633 million in 2011 re flecting a deterioration 
of 107 per cent.  This is attributable to high  import bill on machinery and transport equipment, East African Community WT/TPR/G/271 
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 manufactured goods, mineral fuels and food.  In 2 011, earnings from total exports financed 38.8 per 
cent of the import bill compared to 45.4 per cent in 2010. 
48. Kenya's long term export development goal is  consolidation and expansion of the key 
markets; and diversification into new export produc ts and markets.  The Country has re-focused its 
export development and promotion activities on thr ee priority sectors with high export earnings, 
which are; value addition of agriculture and livestock products, manufacturing, and services. 
VII. TRADE POLICY REGIME 
(1) NATIONAL AND INDUSTRIAL TRADE POLICY  
49. Kenya has formulated a draft National Trade Policy with the overriding need of providing a 
coherent trade environment that facilitates the grow th and development of trade.  The Policy seeks to 
consolidate existing policies drawing upon experi ences from successful economies and establishes the 
linkages between domestic trade and external trad e policies and competitiveness of the economy.  It 
takes into account new developments  and trends in international a nd domestic trade such as regional 
integration, rise in South-South trade, containeri zation, intra-firm trade,  global production networks, 
growing trade in professional services, rapid a dvances in ICT and wider use of e-commerce.  
50. The draft National Trade Policy will be the catalysts that will help Trade Sector contribute to 
the 10 per cent economic growth set out in the Kenya Vision 2030.  The policy is intended to;  improve co-ordination of instituti ons responsible for promoting and regulating trade;  set and re-
define Government Policy relating to Interna tional and Domestic trade; design appropriate 
complementary measures to improve the busin ess regulatory and macroeconomic environment; 
increase investment in infrastructure to support trad e development; improve trade facilitation in order 
to enhance efficiency and delivery of goods and services in both domestic and international market; 
and ensuring effective participation of key stak eholders (Members of Parliament, Government 
Ministries, private sector, civil society, and development part ners, among others). 
51. Kenya’s draft National Industrialization polic y framework is expected to underpin the 
industrialization process.  This policy elaborates on the critical "enabler, or foundational" pillars as 
premised in the Kenya Vision 2030 policy framework.  Specific policy proposals are pronounced to 
ensure decisive actions that can deliver good infrast ructure; roads, railways, airports; a reliable oil 
pipeline as well as Information, Communication Technologies (ICTs) - among others, because they are the basis of successful industrialization.  Qu ite importantly, the role of an emerging regional 
market and the need to harmonise certain enabler pol icy interventions is emph asised as is the need for 
ensuring an enabling secure environment within the country’s borders as a major investor incentive.  
52. The policy document specifies the policy optio ns for resources and resource mobilization for 
meaningful industrial sector expansion.  To this  end, a domestic capital formation approach is 
proposed with a specific call to establish an Indus trial Development Fund (IDF) to assist investors 
seeking to establish micro, small and medium industries (MSMIs). 
(2) T
RADE FACILITATION  
53. Kenya facilitates trade by harmonizing and simp lifying Customs procedures, Inter connecting 
Customs systems through RADDEX, eliminating Cu stoms related non-tariff barriers, managing free 
circulation of goods, enabling smooth flow of transit traffic, hence promoting export and investment.  
Facilitation of legitimate Trade is aimed at increasing the velocity of flow of goods through customs 
borders in the EAC Region.  The area of st rategic intervention includes harmonisation and WT/TPR/G/271 Trade Policy Review 
Page 38 
  
  simplification of Customs procedures, which will reduce compliance and tran saction costs and speed 
up clearance of goods both at entry and exit points.  The EAC Customs union has finalised the harmonisation of a common procedures manual to  be applied by all the Partner states. 
54. The application of ICT (interface/inter-connectiv ity) and exchange of information across the 
EAC Region has been possible through the Implem entation of RADDEX in the Customs borders 
which enables Customs administrations in the Region  to timely exchange trade information.  Customs 
procedures and the ICT interconnectivity have enab led smooth and seamless flow of information to 
facilitate the free circulation of goods. 
55. Plans are underway to establish a single Custom Te rritory to facilitate seamless circulation of 
goods.  This will ensure that once goods are cleared at the first port of entry, they are not subjected to 
further customs clearance when moved across Customs borders.  
56. The Government has eliminated several NTBs through use of non-intrusive methods e.g. 
Scanning Import and Export Cargo at the Port and Airports, use of Electronic Cargo Tracking System 
(ECTS) on transit and local cargo.  Kenya has also implemented the Mega Port initiative, a tool that 
detects and deters importation/expo rtation of radioactive and nuclear materials through the Port of 
Mombasa.  Kenya has commenced Operationalizati on of One Stop Border Post (OSBP) concept at 
Malaba border post where joint verification of cargo takes place.  One Stop Border Post infrastructure 
are under construction in several borders within the pa rtner States e.g. Namanga Border Post.  It is 
expected that this will reduce tr ansaction costs and customs delays at border crossings through 
reduction of the number of inspections and processes. 
(3) C
OMPETITION POLICY  
57. Kenya is committed to improving competiti on in its economy through creation of 
competitive and dynamic markets as a means of facilitating economic growth.2  To actualize this 
commitment, the Government has modernized the competition regulatory framework through the 
enactment and commencement of the Competition Act, Cap. 504.  The Act, inter alia , harmonizes 
competition law with other laws governing sector  regulation and also creates an autonomous 
Competition Authority and Competition Tribunal.  
58. It is expected that with effective enforcement of this Act, competition in the Kenya's markets 
shall be deepened.  To facilitate the aforemen tioned objective, the Government is currently 
developing supportive subs idiary legislation to enhance tran sparency and predictability in the 
enforcement process.  This is aimed at reducing the costs of doing business (transactional and other costs emanating from the unpredictability of the enfo rcement process) and also result to some savings 
to the Authority. 
(4) G
OVERNMENT PROCUREMENT  
59. Public Procurement in Kenya is governed by th e Public Procurement and Disposal Act, 2005.  
The Law was enacted in October 2005 and opera tionalized on 1 January, 2007 vide the Public 
Procurement and Disposal Regulations, 2006.  The cu rrent dispensation was designed to transform the 
way procurement is carried out in Kenya.  The Basic Tenets of the Act include: full autonomy to 
                                                      
2 The Economic Recovery Strategy for Wealth and Employment Creation 2003-07 (ERS document) 
Chapter 4, paragraph 6;  Medium term Plan of Kenya Vision 2030, Chapter 4, Paragraph 4.4.4;  and The 
Constitution of Kenya, Articles 46 (consumer rights) and Fo urth Schedule (Part 1 - sections 9, 10, and 14;  and 
Part 2 - section 7). East African Community WT/TPR/G/271 
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 entities to act within the Law; full oversight by th e Public Procurement Oversight Authority (PPOA); 
corporate decision-making within institutions; segre gated authority;  clear role of procurement 
professionals; role of professionals in changing attitudes and promoting values;  role of stakeholders;  
More information to the public on procurement e. g. on contracts awarded;  reduction of various time 
periods aimed at eliminating delays experienced in the procurement process;  and a right to 
administrative review for an aggrieved party. 
60. The transformed public procurement process will particularly be critical in realizing the 
Vision 2030.  The PPOA is fully prepared to facilita te the efficient management of public resources 
by not only displaying the professionalism in procuring goods, works and services for the public 
sector but also ensuring the Government gets value for money in delivering Vision 2030's flagship 
projects most of which will be contracted us ing the Public Private Partnership framework. 
(5) PRIVATIZATION  
61. In an effort to deepen the engagement of  private sector participation in line with 
Government’s private-led development policy on  privatization and to deal with challenges 
experienced in the past privatization process, th e Government enacted the Privatization Act 2005, 
which was operationalized in 2008 .  The Act established a Commission with the responsibility of, 
inter alia , formulating, managing and implementing Priv atization Programmes.  The Commission is 
in charge of making specific privatization pr oposals for each privatization included in the 
Privatization Programme.  The Government is ther efore committed to enhancing the effectiveness of 
the Privatization Commission to oversee the implementation of the privatization strategy aimed at 
promoting accountability and efficiency and opening opportunities for the private sector investment 
and new technology in public enterprises. 
62. The Government has earmarked the followi ng sectors for privatization:  banking, 
agro-processing, hospitality, energy, infrastructure, and manufacturing among others. 
(6) DEVELOPMENT IN STANDARD ’S AREA 
63. Kenya Bureau of Standards (KEBS) is the Na tional Standards Body which handles metrology 
and conformity assessment services among others.  It  is also the WTO/TBT National Enquiry and the 
National Codex Contact Point.  In the last six (6) years the number of Kenya Standards increased to approximately 7000 from below 1000.  Most of th e KEBS testing and Metrology laboratories are 
accredited while others are scheduled for accreditati on.  A Non Destructive Testing (NDT) training 
centre was established in 2007.  NDT allows parts and materials to be inspected and measured without 
damaging them since it allows inspection without inte rfering with a product's final use, this provides a 
balance between quality control and cost-effectiveness.   NDT plays an important role in the quality 
control of a product.  It is used during all the stag es of manufacturing of a product and  to monitor the 
quality of the; raw materials which are used in the construction of the product, fabrication processes 
which are used to manufacture the product and finished product before it is put into service. 
64. KEBS has sustained the Product Certification Sche me to raising the level of quality for the 
products traded in the whole country and enable d over 1500 Kenyan products to access the regional 
markets.  The Pre-export Verification of Confor mity (PVoC) programme that checks all listed 
products for quality, safety, health and environmenta l impact before importation into the country was 
enhanced.  KEBS continues to implement a na tional production certification scheme.  Products 
certified under the scheme access the EAC market under the mutual recognition of quality marks WT/TPR/G/271 Trade Policy Review 
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  provision.  Implementation of PVoC programme was su stained in partnership with the three appointed 
agents. 
65. Kenya continues to be a key participant in the development of interna tional standards and in 
the management of Standardization under the ISO (International Organization for Standardization), 
IEC (International Electro-technical Commission), CODEX and ITU (International 
Telecommunications Union) regimes.  Kenya is also  a member of Bureau International des Poids et 
Mesures (BIPM) The Standards Act which established KEBS is currently under review to align it to 
the East Africa Community Standardisation, Qua lity Assurance, Metrology and Testing Act, 2006 
(EAC SQMT Act), the proposed EAC Metrol ogy Bill and international best practice. 
66. Horticulture production in Kenya is among the leading contributors to the national economy 
contributing 36 per cent of agriculture’s contribu tion to the Kenyan economy.  The subsector has 
continued to grow at an annual ra te of 15–20 per cent over the last decade.  Kenya is a major exporter 
of horticultural produce to the European market.  The export of horticulture produce is skewed towards flowers.  Kenyan flowers account for 32  per cent of the European Union (EU) flower 
market—one of the largest flower markets in the world. 
67. This success is attributed to significant achieve ments in complying with international market 
requirements due to increased awareness by the fa rmers, Kenya’s increased participation in the 
development of the International Plant Protection Convention (IPPC) standards, continuous revision 
of Kenya’s standard operating procedures by th e Kenya Plant and Health Inspectorate Service 
(KEPHIS) to ensure they conform to the IPPC standards and enforcing their implementation by 
continually training its staff and beefing up the country’s borders to prevent entry/exit of non-
compliant produce. Harmonization of both phytosanita ry and quality standards is crucial especially 
with the increased regional trade and integration.  KEPHIS has been part of a team involved in the 
harmonization of both phytosanitary and quality st andards within the East African Community and 
COMESA regions with the aim of increasing safe trade within the region.Partnership between 
KEPHIS, the IPPC, the Netherlands, Centre for Agri culture Bioscience International (CABI)  and the 
University of Nairobi has led to the creation of  a Centre of Phytosanitary Excellence with the 
objective of enhancing capacity of plant health syst ems in African countries to protect agriculture and 
increase ability to compete in  international markets. 
68. There has been an increased number of Pest  risk analysis carried out by KEPHIS in 
collaboration with other partners e.g. Joint pest risk studies between KEPHIS and USDA- Scientists 
resulted in market access offers for French beans ( Phaseolus vulgaris ), Runner beans ( Phaseolus 
coccineus ) among others.  The launching of the nati onal seed policy in 2011 and the national 
Horticulture Policy currently bein g developed are essential in developing strong seed and horticulture 
quality assurance systems in the country. 
69. The ISO 17025:2005 accredited Analytical Chemistry Laboratory and Seed Testing 
Laboratory provides services to verify the quality of  agro-inputs and pesticide residues in agricultural 
produce ensuring Kenya’s produce meet international standards.  The plant quarantine station which 
is a reference laboratory for CO MESA region opened in 2010 with the aim of providing quarantine 
services within the region.  To improve efficien cy in export certification, KEPHIS launched the 
Electronic Certification System (ECS) in 2011 and is currently used by 450 exporters, with more 
expected to use the system. 
70. The Sessional Paper for the National Livestock Po licy was approved by the Kenya Parliament 
in December 2008, with the objective among others, of  facilitating the enforcement of the sanitary and East African Community WT/TPR/G/271 
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 phytosanitary measures in line with the WTO-SPS Agreement, including developing and enforcing 
good practices which conform to national and interna tional standards at all stages of production and 
marketing.  The policy upheld the Department of  Veterinary Services which is the WTO-National 
Enquiry Point for Kenya in the area of animal health zoonoses, welfare and trade certification 
measures.  Kenya has participated in the developmen t of animal health standards through participation 
in World Organisation for Animal Health (OIE) standards.  
(7) INTELLECTUAL PROPERTY RIGHT AND ENFORCEMENT  
71. Kenya recognizes the role intellectual property (IP) plays in its technological, industrial, 
cultural, social and economic development.  Keny a continues to devote resources and effort towards 
putting in place, and where it exists improving, system s for effective and efficient management of IP 
and IPRs within its territory for enhancement of national growth.  Consequently, Kenya has 
established policy, legal and institutional framework s necessary for the promotion, protection, and 
utilization of all main aspects of IP within its territory.3  In addition, as a commitment to 
regional/international co-operation, Kenya is activel y involved in formulation and implementation of 
regional/international policy and law on IP and, besides the TRIPS Agreement, is party to the main 
regional/international treaties/agreements on the same.4 
72. In order to facilitate National growth, the Govern ment will continue to improve its IP system 
including intensification of creation of public aw areness, enhancement of service delivery by the IP 
offices, improvement of IP legislation including th ose on geographical indication, finalization of the 
National IP policy and operationalization of an IP academy.  
73. Presently enforcement of Intellectual Propert y Rights (IPRs) in Kenya is undertaken by 
various Government agencies in conjunction with  the Anti-Counterfeit Agency.  Such agencies 
include the police, Weights and Measures Department  in the Ministry responsible for trade, Kenya 
Copyright Board (KeCoBo), Kenya Plant Health  Inspectorate Services (KEPHIS), Customs 
Department of the Kenya Revenue Authority and Ph armacy and Poisons Board (PPB), among others.  
Criminal proceedings for counterfeiting or infri ngement of IPRs can be initiated before the 
subordinate courts (Magistrate’s Courts) while civ il proceedings may be pursued before the Industrial 
Property Tribunal or the High Court.  However,  the Anti-Counterfeit Agency is the principal 
Government body mandated to curb counterfeiting a nd to ensure coordination of efforts among the 
various agencies in the fight against counterfeiting. 
74. The Anti-Counterfeit Act 2008 established the Anti-Counterfeit Agency to prohibit trade in 
counterfeit goods.  The Agency, which became ope rational in June 2010, enforces IPR infringements 
through appointed and designated inspectors.  
75. To-date, the Agency has carried out numerous enforcement activities that netted counterfeit 
products worth over Kshs200 million.  In terms of creating public awareness, the Agency is working 
                                                      
3 Intellectual property rights, copyright and  related rights and plant breeders rights. 
4 Including the Paris Convention  for the Protection of Industrial Property (1883), the Nairobi Treaty  
on the Protection of the Olympic Symbol (19 81), the Trademark Law Treaty (TLT) (1994), Madrid Agreement  
Concerning the International Registration of Marks (1981), Protocol Relating to the Madrid Agreement  
Concerning the International Registration of Marks (1989), Patent Co-operation Treaty ( PCT ) of 1970, Lusaka 
Agreement  establishing ARIPO of 1976, Harare Protocol  for the Protection of Patents and Industrial Designs 
of 1982, WIPO Treaty Establishing WIPO of 1970, International Union for the protection of  New Plant 
Varieties ( UPOV ), Agreement on Trade-Related asp ects of Intellectual Property Rights (TRIPS Agreement ) of 
1995. WT/TPR/G/271 Trade Policy Review 
Page 42 
  
  closely with private companies, private sector asso ciation and development pa rtners in educating the 
public about the dangers of counterfeiting. 
VIII.  REGIONAL AND BILATERAL TRADE AGREEMENTS 
(1) EAST AFRICAN COMMUNITY (EAC) 
76. The EAC is a regional organization mandate d by the Governments of Burundi, Kenya, 
Rwanda, Tanzania and Uganda to spearhead th e East African Community economic, social and 
political integration agenda.  The EAC was enacte d by the EAC Treaty that was signed in 1999 and 
ratified on 1 July 2000.  The initial members of  the EAC were the Republic of Kenya, United 
Republic of Tanzania and Uga nda while Republic of Rwanda and Burundi acceded into the 
Community in June 2007. 
77. The Community has initiated the process of achievi ng a Monetary Union by 2012.  The aim is 
to harmonize monetary policies with macro-ec onomic convergence high in the agenda.  Political 
Federation among the EAC Partner States is the final and ultimate stage in the integration process and 
is expected to be achieved by 2017.  In the EAC r eal GDP is expected to e xpand by 6 per cent in 2012 
supported by increased intra-trade and growth in services. 
78. The expanded market size of 133.5 million pe ople with a combined GDP of US$79.4 billion 
is expected to create opportunities for growth an d investment.  EAC continues to be the most 
important trade and investment destination for Ke nya.  Kenya is fully committed to realizing the 
objectives of the EAC Treaty. 
(2) COMMON MARKET FOR EASTERN AND SOUTHERN AFRICA (COMESA) 
79. COMESA launched a Free Trade Area in 2000.  14 countries including Kenya out of the 
19 member states are implementing the Free Trade Area.  In June 2009, COMESA launched its Customs Union (CU) with a three year transiti on period provided to allow member states to 
implement the migration of national tariff nom enclatures to the COMESA common tariff 
nomenclature, adopt the Customs Union management regulations, and adjust national tariff rates to 
the Common External Tariff (CET).  With the full implementation of the CU, COMESA will form a 
major market of 19 member st ates with a population of about 400 million for both internal and 
external trading.  
(3) T
RIPARTITE  
80. COMESA, East African Community (EAC) a nd Southern Africa Development Community 
(SADC) are in the progress of coming up with a Tripartite Free Trade Area (FTA).  The Regional 
Economic Communities (RECs) held the first Summit for Heads of State and Government in 2008 in 
Kampala, Uganda where Heads of State and Gove rnment approved the expeditious establishment of 
an FTA.  During the 2nd Summit, a developmental approach to regional integration was adopted based 
on three pillars, namely, Market Integration, Indust rial Development and Infrastructure Development.  
The Summit launched negotiations for the Tripartite  Free Trade Area FTA, adopted the negotiating 
principles and adopted a roadmap for the negotiations. 
81. Kenya alongside other EAC member states is ne gotiating the Tripartite Free Trade Area as a 
bloc.  The Secretariats of the three regional ec onomic communities have produced draft instruments 
for negotiating the FTA.  The Tripartite will provide  a larger market for Kenyan goods and services. East African Community WT/TPR/G/271 
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 (4) EAC–EU-EPA  NEGOTIATIONS  
82. Kenya as a signatory to the ACP-EU Partne rship Agreement and is committed to the 
successful conclusion of a new WTO compatible Ec onomic Agreement with the EU.  The aim is to 
gradually remove barriers to trade between EU and the ACP states and also enhance trade and 
economic cooperation as provided for under Art.36(1) of the Cotonou Agreement. 
83. Kenya is currently negotiating EPAs with the EU under the East African Community which 
comprises five countries namely: Burundi, Uganda, Kenya, Rwanda and Tanzania.  The negotiations 
will be concluded once all nego tiation areas are agreed upon. 
84. Both EAC and EU have agreed on the Consolidat ed EPA text which is composed of agreed 
areas and work in progress in the following clus ters: Economic and Development Cooperation, 
Agriculture, Rules of Origin,  and   Disput e Settlement, Institutional Arrangement and Final 
Provisions. 
(5) AFRICAN GROWTH AND OPPORTUNITIES ACT (AGOA) 
85. Through the African Growth and Opportunity Act (AGOA), Kenya has realized substantial 
investments in key sectors resulting in new job creati on and export growth par ticularly in the textiles 
and apparels sector.  AGOA has also facilitated high-level dialogue between the US and African 
eligible countries Kenya include d eliminating barriers to trade between the parties.  AGOA has 
created employment in the export processing zone s for hundreds of Kenyans, through exports of 
eligible products for sale in the U.S.  Kenya has be nefited in terms of capac ity building for exports to 
the US, yielding an increase in both product range  and value beyond pre-AGOA.  Sectors such as 
textile, coffee, tea, horticulture, nuts a nd handicrafts have responded positively.  
86. Substantial changes have been made to the orig inal provisions and subsequent extensions of 
the AGOA ACT, the current one being extended to Se ptember 2015.  Kenya supports the extension of 
the third country fabric provision beyond Sept ember 2012 and extension of AGOA beyond 2015. 
(6) MULTILATERAL NEGOTIATIONS IN THE WTO 
87. Kenya remains committed to the conclusion of  the Doha Development Round based on the 
progress made so far and expects its results to re flect clear and measurable development values in 
accordance with Doha Ministerial Mandate.  
88. Kenya notes that Agriculture and Non-Agri cultural Market Access (NAMA) have been 
responsible for the stagnation of the negotiations  because of their sensitiv ities and the entrenched 
positions taken by developed and advanced developing countries.  The negotiations in agriculture 
therefore, should result in real and substantial re duction of trade distorting domestic support in rich 
industrialized countries, and increased market acc ess for products of export interest to African 
countries.  In NAMA the negotiations should take into consideration the need for policy space and 
flexibility necessary in addressing developing countries’  developmental, financial and industrial needs 
and the risk of de-industrialization and its attendant negative consequences.  
89. In addition effective and operational speci al and differential provisions should be 
incorporated in all areas of the negotiations with  the aim of fostering the ability of developing 
countries to become full participants in the multilate ral trading system and to help them reap the 
benefits of their WTO membership. WT/TPR/G/271 Trade Policy Review 
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  (7) BILATERAL TRADE AGREEMENTS  
90. Kenya has 27 bilateral trade agreements in  force with both developed and developing 
countries to open up the platform of economic coope ration.  The operational bilateral agreements 
serve the country’s interests in terms of; reciprocal  participation in exhibitio ns and trade fairs as well 
as respective country week promotional events; ex change of both general and product specific trade 
missions both limited to business participation as well as at official delegation level; market intelligence missions/surveys and shared market information; encouragement of institutional 
cooperation such as the standards institutions, Chambers of Commerce and Industry, customs 
organizations, research institutions, trade and inv estment promotion agencies meetings among others. 
IX. PRIVATE SECTOR DEVELOPMENT STRATEGY (PSDS) 
91. Private Sector Development in Kenya is directed  by the Private Sector Development Strategy 
(PSDS), 2006-10 and its subsequent  implementation Plan (PIP) of 2007-12.  The PSDS draws its 
priorities from Vision 2030 and the Medium Term Pl an (MTP 2008-12) and can be effectively seen as 
a catalyst for implementation of Vision 2030 economic pillar under the current MTP. 
92. The overall objective of the PSDS is to enhan ce equitable economic growth and employment 
creation, through improved business enabling enviro nment, increased trade and competitiveness and 
productivity of sectors that are important to the poor.  The role of PSDS is to catalyse and co-ordinate 
all Private Sector Development initiatives in Keny a, and in accordance with the Paris Principle on 
development assistance, provide a platform for harn essing synergy from different development actors, 
while  avoiding duplication of efforts. East African Community WT/TPR/G/271 
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 REPORT BY RWANDA 
LIST  OF ABBREVIATIONS 
ARIPO  African Regional Intellectual Property Organization BNR  National Bank of Rwanda  
BRD  Development Bank of Rwanda 
CEPGL  Economic community of the great lakes countries 
CET  Common External Tariff CIP  Crop Intensification Programme COMESA Common Market for Eastern and Southern Africa  
DRC  Democratic Republic of Congo 
EAC  East African Community  EDPRS  Economic Development an d Poverty Reduction Strategy  
EIF  Enhanced Integrated Framework EPA  Economic Partnership Agreement  FDI  Foreign Direct Investment  
FTA  Free Trade Areas 
FWC  Fully Washed Coffee  GDP  Gross domestic product ICC  International Convention Centre  ICSID  International Centre for the Settlement of Investment Disputes  
ICT  Information and Communication Technology 
IMF  International Monetary Fund  IPRs  Intellectual Property Rights  LDC  Least Developed Countries  MIGA  Multilateral Investment Guaranty Agency  MINAGRI Ministry of Agriculture 
MINECOFIN Ministry of Economic Planning and Finance  
MINIRENA Ministry of Natural Resources  MSME  Micro Small and Medium Sized Enterprises NAEB  National Agricultural Export and Development Board  NAMA  Non-Agricultural Market Access  
NES  National Export Strategy  
PCT  Patent Cooperation Treaty PSTA  Strategic Plan for Agricultural Transformation RCTG  Regional Customs Transit Guarantee  RDB  Rwanda Development Board  
REC  Regional Economic Community 
SADC  Southern African Development Community  SEZ  Special Economic Zone  SI   Sensitive Items SPS  Sanitary and phytosanitary TFTA  Tripartite Free Trade Areas 
TRIPS  Trade Related Aspects of Intellectual Property Right  
UAF  Universal Access Fund WEF  World Economic Forum  WIPO  World Intellectual Property Organization   
 WT/TPR/G/271 Trade Policy Review 
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  I. INTRODUCTION 
1. Since the last Trade Policy Review (TPR) in  2004, Rwanda has witnessed remarkable 
improvements at a social, economic and institutional level.  GDP per capita has more than doubled 
since 2004, from US$242 to US$595 in 2011, a 146 per cent increase.  Over the same period 
Rwanda's real GDP growth rate averaged 8.4 per cent.  Rwanda has successfully translated its 
impressive growth into poverty reduction, with a drop in poverty levels of 12% over the past five 
years from 56 to 44 per cent.  These gains ha ve been accomplished through sustained positive 
institutional strengthening .  Rwanda now ranks 45th in the World Bank's Doing Business index, above 
all African nations with the exception of South Africa and Mauritius.  Rwanda is also the 3rd most 
competitive African country for doing business in according to the World Economic Forum's Global 
Competitiveness Report 2012.  
2. Rwanda's long-term developm ent goals are guided by the “Vision 2020” document, which 
aims to transform Rwanda from a predominat ely low-income agriculture-based economy to a 
knowledge-based, service-orientated economy by 2020.  The strategy is formed around six pillars: 
 1. Good Governance and Capable State; 
 2. Human Resource Development and a Knowledge Based Economy; 
 3. A Private Sector Led Economy;  4. Infrastructure Development;  5. Productive and Market Orientated Agriculture;  and 
6. Regional and Internati onal Economic Integration. 
3. In May 2012, Cabinet adopted revised Vision 2020 .  The new economic growth targets in line 
with the revised Vision 2020 targets require an av erage GDP growth of 11.5 per cent and GDP per 
capita from US$900 to US$1240.  This will be driven by  an industrial growth of 14 per cent, services 
growth of 13.5 per cent and agricultural growth above 8.5 per cent. 
4. Vision 2020 is currently implemented through th e medium term planning framework of the 
Economic Development and Poverty Reduction Strate gy (EDPRS) which covered the period 2008-12.  
As EDPRS I draws to a close, an EDPRS II ela boration process has been launched to develop new 
strategies for the realization of Rwanda's na tional development objectives and maintain the 
momentum already achieved. 
II. MACROECONOMIC ENVIRONMENT 
2.1 E
CONOMIC PERFORMANCE  
5. Rwanda's economy has demonstrated remarkab le stability in recent years despite global 
economic uncertainty.  Real GDP growth in 2011 w as estimated at 8.6 per cent, driven by a large 
increase in agricultural output, robust exports and st rong domestic demand, largely fuelled by imports.  
As a result Rwanda has witnessed a substantial wideni ng in the trade deficit over the past five years 
with an increase in the trade deficit from -9.6 per cent of GDP in 2006 to -14 per cent of GPD 
in 2011.  The trade deficit is financed by substa ntial donor inflows and some Government borrowing.  
6. Foreign direct investment (FDI) flows have increased rapidly since 2005, from 
US$10.5 million in 2005, to US$106.2 million in 20 11.  FDI peaked at US$119 million in 2009 but 
inflows dropped substantially in 2010 as a result of the global crises. East African Community WT/TPR/G/271 
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 7. While inflation rose sharply in 2011, it has remain ed in single digits and is the lowest in the 
region.  Headline inflation reached 8.3 per cent (year- on-year) at end 2011, up fr om 0.2 per cent in the 
previous year.  Inflation was driven largely by ri sing fuel and food prices, but also an accommodative 
monetary policy (IMF, 2012). 
2.2 S ECTORAL PERFORMANCE AND OUTLOOK  
8. Despite strong economic growth over the past decade, much of Rwanda's population remains 
reliant on small scale agricultural.  Agriculture's shar e of GDP has declined by 7 per cent since the last 
TPR, falling from 39 per cent of GDP in 2004 to 32 per cent in 2011.  This is in line with the Governments ambitions to reduce agricultures sh are of GDP to 25 per cent by 2020 while boosting 
productivity and output.  The sector is Rwanda's ma in employer with as much as 80 per cent of the 
population reliant on agricultural as a source of household income. 
9. The industrial sector grew by an averag e of 11 per cent between 2004 and 2011 reaching 
US$1.04 billion in 2011.  Over the same period th e sectors share of GDP increased from 14 per cent 
to 16.3 per cent. Strong performances in both the manufacturing and construction subsectors, 
averaging 8 per cent and 15 per cent respectively between 2004 and 2011, largely drove growth over 
this period. 
10. The services sector is Rwanda's largest sector in terms of share of GDP, accounting 
for 46 per cent in 2011.  Among the subsectors, wholesale and retail trade is the largest (13 per cent of GDP), followed by transportation, storage and communication services (8 per cent).  These subsectors were also the main contributor of  services growth over the last five years. 
Table 1 
Share of GPD by Kind of Activity 
(US$ millions) 
 2004 2005 2006 2007 2008 2009 2010 2011 
GDP 1 206 1 440 1 717 2 045 2 577 2 985 3 280 3 828 
Agriculture 465 553 660 729 834 1 012 1 058 1 223 
Industry 167 203 236 285 382 431 491 625 
Services 497 596 720 911 1 196 1 357 1 532 1 745 
 
Source: MINECOFIN GDP Indicators.  
2.2.1 A GRICULTURE  
11. Food crops constituted 85 per cent of the value of agricultural output in 2011.  Food crop 
growth has averaged 5.2 per cent over the past five years and 67.1 per cent of cultivable land is used 
for the production of food crops reflecting the main ly subsistence nature of  Rwanda's agricultural 
sector.  The Ministry of Agriculture's (MINAGRI) support to food crop production is guided by the 
Strategic Plan for Agricultural Trans formation in Rwanda – Phase II (PSTA II), which has been 
under implementation since-2009 and will run until end-2012. There are four programmes under 
PSTA II: 
1. Programme 1:  Intensification and Deve lopment of Sustainable Production aims to 
 increase and intensify productivity of agriculture  and animal resources.  Activities in  this 
 area have focused on soil conservation through the construction of terraces and  irrigation, 
 increase livestock ownership and improve u se of agricultural inputs  through the Crop 
 Intensification Programme (CIP).  WT/TPR/G/271 Trade Policy Review 
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  2. Programme 2:  Support to the Professiona lization of Producers by strengthening the 
 sector's social capital base.  Activities in this area are; develop commercial linkages 
 between farmers and markets, promotion of en trepreneurship, and strengthening  institutions 
 charged with the development of productive technologies.  
3. Programme 3:  Creating an Environment for Business and Agribusiness Development through 
 supporting the regionalization and market orient ation of crop production. Support is provided 
 to promote value addition and crop transforma tion activities through credit and investment in 
 transformation units, cottage industries and rural infrastructure.  
4. Programme 4: Institutional Development throug h strengthening the institutions through which 
 the Government supports the agricultural sector.  
12. Initial results indicate that PSTA II has been successful.  Through increased and improved 
application of fertilizer there has been a dramatic  increase in yields of both farm consumed and 
marketable crops.  Significant investments in irri gation and land husbandry have reduced soil erosion 
which has substantially improved yields in the dr y season.  Production in terms of kilocalories per 
person per day has increased substantially from 1612 k cal per person per day in 2000 to 2385 in 2011. 
13. There has been a successf ul shift in farmer orientation fro m subsistence to market production. 
This has been achieved through improved market access, information availa bility, and quality of 
production.  Investments in infrastructure such as fe eder roads and collection centres have increased 
access to markets.  The e-soko market informati on system has improved the price producers receive 
for their goods.  The introduction of grades, sta ndards and better market organization has contributed 
to improved quality.  Since 2005 there has been a 25 per cent increase in the share of agricultural 
output going to market.  
14. Export crops represent just 2.3 per cent of total agricultural output but have averaged 48.1 per 
cent of Rwanda's total export earnings over the past 5 years.  Coffee and tea are Rwanda's main export 
products accounting for over 90 per cent of agricultural exports. 
15. Rwanda produces some of the highest quality t ea in the world. Tea exports in 2011 were 
valued at US$63.9 million with export growth averag ing 18.3 per cent over the past five years.  
Rwanda's national tea strategy (2009-12) has b een successful in increasing export growth through 
raising yields and quality, strategic investment in the supply chain and, supporting a move up the 
value chain. The National Agricultural Export and Development Board (NAEB) is currently working 
with the Development Bank of Rwanda (BRD) to establish a system for facilitating loans to tea 
producers.  It is also rolling out a programme to upgrade management sk ills for cooperatives.  
Infrastructure has been put in place for two new t ea factories to ensure continued movement of 
exports up the value chain.  Combined these effo rts will increase output and quality of tea and 
continue to ensure robust tea export growth. 
16. Coffee export growth averaged 22.6 per cent sinc e Rwanda's last TPR with exports reaching 
US$74.6 million in 2011.  Growth is being driven  largely by the record prices achieved for 
Rwandan coffee.  Between 2004 and 2011 unit pric es for coffee increased from US$1.2 to US$4.8 
per kilogram, a 300 per cent increase in prices.  High prices were achieved through a concerted effort by Government and the private sector to move export up the value chain through the promotion of 
exports of fully washed coffee (FWC).  Invest ment in washing stations and processing facilities 
resulted in an increase in FWC exports from just 1 pe r cent in 2002 to 20 per cent of exports in 2010.  
The Government plans to further increase the shar e of FWC exports through  continued support to 
coffee washing stations in order to improve processes and output. East African Community WT/TPR/G/271 
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 17. Efforts are also being made by NEAB to dive rsify Rwanda's agricultural exports through the 
promotion of horticultural crops (fru its, vegetables and cut flowers) essential oils (petunia and 
geranium), macadamia nuts, vanilla and silk.  Th e Government is taking active steps to attract 
potential investors and is resolving concerns raised  by the private sector around land availability and 
infrastructure.  Rwanda is one of seven countries in Africa involved in the Grow Africa Initiative.  
Through Grow Africa, Rwanda is se eking to build partnerships with private investors in the agri-
business sector.  Opportunities in this sector are bei ng packaged as part of a food basked approach, 
based on priority commodity value-chains. Specific opportunities include Tea factory privatization, horticulture production and processing, staple  crops and greenfield developments.  
2.2.2 I
NDUSTRY  
18. The Government's target is for the industrial sector to account for 20 per cent of GDP by 
2020.  The development of the sector is guided th rough Rwanda's National In dustrial Policy (2011) 
which aims to increase domestic production for local consumption, improve Rwanda's export 
competitiveness in the industrial sector and cr eate an enabling environment for Rwanda's 
industrialization.  
19. Manufacturing accounted for 44 per cent of indus trial sector output in 2011, however the 
sector is characterised by low capacity utilization and lo w export orientation.  It is estimated that as 
little as 4 per cent of manufactured output is exported.  A key challenge for the manufacturing sector is the cost of production due high transport costs when importing inputs, high energy costs and skills shortages.  
20. The Government recognises these challenges and is  actively engaged in reducing their impact. 
Support is being provided to increase output of existing firms, increase the manufacturing sectors 
export orientation and encourage ne w investment in strategic sub sectors such as agro-industry and 
construction material. 
21. A Special Economic Zone (SEZ) is being establishe d in Kigali and is expected to be operation 
by the end of 2012.  Private sector response to th e SEZ has been extremely positive with 96 per cent 
of the parcels under phase one already purchased.  A SEZ unit to coordinate implementation has been 
established within the Rwanda Development Board (R DB).  Furthermore, f our provincial industrial 
parks are planned in four cities around the country.  C onstruction of the parks is expected to begin in 
early 2013. 
22. RDB is finalizing plans for an Export Developm ent Support Programme specifically targeted 
towards the manufacturing sector.  The programme w ill provide technical and financial assistance to 
firms in order to increase the number of competitiv e export orientated firms operating in Rwanda. 
23. Industrial turnaround plans have been commissione d by MINICOM for selected firms that are 
failing but hold potential to boost domestic producti on, job creation and exports.  Plans assess the 
factors responsible for the failure of concerned companies and activities required to make the firms 
commercially viable.  To date 29 turnaround report s have been finalised.  Through support from the 
RDB, several turnaround plans are already being implemented. 
24. An estimated 99 per cent of firms in Rwanda are classified as, micro, small or medium sized 
enterprises (MSMEs) (Establishment Census, 2011).  Seventy-two per cent of these firms employ just one person. SMEs are faced with a number of challenges including limited transport and energy 
infrastructure, limited or no insurance facilities, access to finance and a poor culture of 
entrepreneurship.  Despite these challenges th e Government views the MSME sector as a key WT/TPR/G/271 Trade Policy Review 
Page 50 
  
  contributor to Rwanda's development.  The Rw andan Small and Medium Sized Enterprise (SME) 
Policy (2010) aims to create an economy where SM Es significantly contribute to Rwanda's national 
economic development.  This is achieved throu gh stimulating growth in the SME sector through 
enhanced business support service provision, access to finance and the creation of a conducive legal 
and institutional framework. 
25. The Government's support to micro, small and medium enterprise's is guided through the 
MSME Development Programme (2011-2015).  The programme is undertaking a number of activities 
with the aim of addressing entrepreneurship issues.  The Government has plans to establish a Rwanda 
Institute of Entrepreneurship and Cooperative St udies (RIECS) which will encourage students to 
creation of new businesses.  The Hanga Umurimo Project is expected to increase the number, size and 
viability of enterprises through the provision of t echnical and financial support to MSME start-ups. 
Finally the Youth Apprenticeship Programme is aimed at fostering a culture of entrepreneurship in 
Rwanda's young people. 
MINING AND ENERGY  
26. Mining and quarrying accounted for 8 per cent of  industrial output in 2011.  The main 
products in this sector are Cassiterite, Coltan and Wo lfram.  In 2011, exports of these three minerals 
were US$151.43 million. Annual growth in mineral exports has averaged 46 per cent over the past 
five years. Growth in mineral exports has been driven by an increase in volumes traded and more 
recently high prices.  
27. Support to promote the on-going development of the sector is being provided by the 
Government.  The Ministry of Natural Resources (MINIRENA) is undertaking a review of concession 
periods for mines and quarries, which currently stands  at five years.  Increasing the concession period 
will encourage more investments in the sector.  
28. In Vision 2020, the Government has set itself and ambitious target of 75 per cent of the 
population to have access to energy by 2020.  Curre ntly, less than 11 per cent of the population has 
access to electricity.  Furthermore, development in Rwanda is being restricted by inadequate and 
expensive electricity supply.  In response to this challenge, the Government has earmarked the energy 
sector as a priority sector for boosting economic de velopment.  The Government has prioritized 
security of supplies by increasing domestic ener gy production from several sources including hydro-
electricity, methane gas, solar power, biomass and petroleum. 
29. The Government has placed particular emphasi s on the development of hydropower within 
Rwanda.  Domestically, Rwanda produces approx imately 40 MW from small, mini, and micro 
hydropower plants.  Rwanda imports a further 16 MW from regional hydropower plants.  Rwanda is 
planning to commission further domestic hydropow er plants. Currently the large scale hydropower 
projects are operated through regiona l cooperation with Burundi and Tanzania (e.g. Rusumo, 90 MW, 
at the border with Burundi and Tanzania).  East African Community WT/TPR/G/271 
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 2.2.3 S ERVICES  
FINANCIAL SERVICES  
30. The finance and insurance sector is relatively small in Rwanda, accounting for just 6 per cent 
of GDP in 2011.  Rwanda's financial sector is co mprised of nine Commercial banks (431 branches 
and agencies in March 2012), five specialized banks (i.e. one developm ent bank, one cooperative 
bank, three microfinance banks), 11 limited microf inance institutions (MFIs), 63 savings and credit 
cooperatives (SACCOs) and 416 UMURENGE (secto r) SACCOs, nine insurance companies, one 
public pension fund, and 40 private pension funds.  
31. The majority of financial ins titutions are concentrated in ur ban areas, leaving rural areas 
largely un-serviced.  As a result, a large proporti on of the Rwandan population remains financially 
excluded with only 14 per cent having access to fo rmal banking products.  An  additional 7 per cent 
make use of other formal products such as  loans from MFIs or insurance products.  
Twenty-seven per cent of the population make use informal products only (UNCTAD, 2012).  
32. To improve access to financial services, the G overnment has supported the establishment of 
UMURENGE SACCOs to increase access to finance in  rural areas.  The National Bank of Rwanda 
(BNR) has been strengthening the regulatory an d supervisory framework for banks.  In 2011, 
13 regulations for implementing the Banking Law were published in the Official Gazette.  Furthermore, feasibility studies on deposit insurance funds and microfinance institutions were 
completed and draft laws have been prepared. 
Payment system:  Use of payments inst ruments in commercial banks, Q1 2012 
Instrument Volume (%) 
Cheques 7% 
Credit transfers 13% 
Direct debit  0% 
Standing orders 3% 
Withdrawal slips 36% 
Travel's cheques 0% 
Payment cards - on ATM 39% 
On POS 0.25% 
Internet banking 1% 
Mobile banking 1% 
TOTAL 100% 
TOURISM  
33. Tourism is Rwanda's largest source of expor t earnings, accounting for 21 per cent of total 
exports between 2001 and 2010.  In 2011, tourism acc ounted for 3.4 per cent of GDP and is forecast 
to rise to 3.7 per cent in 2012.  The travel and tourism sector directly supported 54,000 jobs or 2.8 per cent of total employment in 2011 and indi rectly a further 130,000 jobs.  Despite the success 
of the sector, Rwanda's Tourism Master Plan has identified a number of limitations to Rwanda's 
existing tourist offer.  These are: 
 An over reliance on revenues generated throug h gorilla tourism, and limited scope for 
expansion due to environmenta l and conservation concerns; 
 Low average stay times per tourist estimated at just 4 days; WT/TPR/G/271 Trade Policy Review 
Page 52 
  
   The relatively low share of tourists visiti ng Rwanda for leisure (compared to business 
tourists) and, at the same time the potential of leisure tourism to gene rate increased revenue. 
34. Thus, diversity in Rwanda's touris m offer is crucial to persuade tourists to extend their length 
of stay and increase tourism receipts.  With a view to diversifying Rwanda's tourism offer the Government has begun encouraging visits based on th e cultural heritage and history of Rwanda and 
promotion of national parks and lakes.  A business plan for a new Kigali Cultural Village has been 
developed and RDB will begin identifying investor s in the coming year.  Religion and events-based 
tourism are also being considered.  The Governme nt is constructing an International Convention 
Centre (ICC) to host major international events.  A strategic paper is currently  under review that will 
define operations of Rwanda's Convention Bureau, which is tasked with promoting MICE tourism. 
ICT 35. The information and communication technology (IC T) sector is at the heart of Rwanda's 
development efforts to transform the country from  a predominately subsistence agriculture economy 
to a knowledge-based economy by 2020.  Vision 2020 ca lls for efforts to be made to widen access to 
ICT, promote ICT for e-Governance, education a nd capacity-building, and for use by the private 
sector. 
36. The liberalization of the telecommunications mark et, in parallel with the privatization of the 
state owned telecommunications operator was successfu l in promoting new entrants in the market and 
promoting competition.  The last decade has witnes sed increased private sector investment in all 
segments of the market (fixed telephony, mobile tele phony, internet service provision, TV), with most 
progress in the mobile and internet services segmen ts.  This increased competition, together with 
increased investment in network infrastructure, has had a positive impact in lowering call charges.  It 
is estimated that call charges have been reduced by 35 per cent since the liberalization of the telecoms 
market.  
37. Major investments in ICT infrastructure have been rolled out by the Government, the private 
sector and development partners, particularly in linking the country thro ugh fibre optic cables. 
Rwanda promotes universal access to ICT technology  through the UAF (Universal Access Fund) with 
the objective of accelerating the use of ICT in th e country.  UAF is funded through the contribution 
of 2 per cent of the turnover of licensed operators in the country.  
III. TRADE POLICIES AND PRACTICES 
3.1 T
RADE POLICY OBJECTIVES  
38. The Ministry of Trade and Industry (MINICOM) is responsible for trade policy formulation 
and implementation.  Due to the cross cutting nature of the trade policy, other relevant ministries such 
as Ministry of Finance and economic Planning, Minist ry of Foreign Affairs and Cooperation, Ministry 
of Agriculture and Ministry of East African Affairs participate in trade policy formulation.  This is 
done in consultation with private sector, academia, civ il society The role of the private sector has been 
institutionalized through consultative forums. 
39. Rwanda has a comprehensive National Trade Policy with the vision of building a robust 
economic base underpinned by ex panding and diversifie d production of quality goods and services for 
trading nationally, regionally and internationally.  The trade policy vision contributes directly to 
achievement of Vision 2020. East African Community WT/TPR/G/271 
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 40. Rwanda Trade Policy integrates the Ministry of Trade and Industry's five strategic objectives 
namely (1) Increasing major traditional exports esp ecially coffee, tea, minerals and tourism;  
(2) diversifying exports into such areas as se rvices (business processing outsourcing), silk, and 
minerals;  (3) Facilitating trade and promoting conf ormity with standards, including negotiations on 
trade agreements for market access, removing non- tariff barriers;  (4) increasing the quantity and 
quality of investment to deal with supply side  constraints;  and (5) Improving the business 
environment (closely coordinated by Rwanda Development Board). 
41. As a landlocked country, Rwanda faces many tr ade bottlenecks that hinder Rwanda's imports 
and exports to regional and international markets.  However, Rwanda has ma de considerable progress 
in the area of trade facilitation.  Rwanda curren tly has three major border posts open 24 hours a day 
(Kigali Airport, Gatuna – Uganda and Poids Corniche – DRC). A further five border posts 
operate 16 hours a day.  Since February 2012 an  Electronic Single Window (ESW) is operational to 
facilitate international trade by expediting and simplifying information flows between traders and 
Government institutions.  With the ESW, administ rative requirements for imports and exports can be 
submitted online.  Currently, the participating inst itutions in this facilitation program are Rwanda 
Revenue Authority (RRA), Rwanda Ministry of H ealth (MoH), Rwanda De velopment Board (RDB), 
Rwanda Bureau of Standards (RBS) and Magasins Généraux du Rwanda (MAGERWA). 
3.2 I MPORT AND TARIFF REGIME  
42. Rwanda does not place any restrictions on th e importation of goods by natural or legal 
persons with the exception of specific products such  as drugs, arms and live animals.  Importers are 
required to register their business with the RDB in or der to obtain a certificate of incorporation, tax 
identification number (TIN) and for social security registration.  This pro cess, conducted by RDB's 
One Stop Business Centre, takes 24 hours and costs approximately US$40.00. 
43. As a member of the East African Community (EAC), Rwanda has applied the EAC Common 
External Tariff (CET) since the beginning of Ju ly 2009.  The EAC CET uses a three tier 0-10-25 
structure.  This sets tariff rates for imports sour ced from outside the Community at 25 per cent for 
finished goods, 10 per cent for intermediate goods, and 0 per cent for raw materials and capital goods.  
All internal tariffs within the EA C have been removed.  Membership  of the EAC CET has resulted in 
263 applied MFN tariff rates exceeding the bound levels under Rwanda's WTO commitments.  
44. The CET allows for certain products considered  as strategically important to the Community 
to qualify for Sensitive Item (SI) status.  Sensitive It ems (SI) are allocated a tariff rate outside of the 
three tier structure.  Broadly, 12 categories of products qualify as sensitive items with tariff rates 
ranging from 35 to 100 per cent (see table).  Rwanda  currently has a stay of application on four 
products within the SI list; wheat grain, wheat flour, rice and sugar.  
Table 2 
List of Sensitive Items and their Tariff Rates (Current, Applied and Proposed) 
 Item  Current official SI rate  Actual applied rate in 
Rwanda (stay of application)
1. Milk and Milk Products 60% 60% 
2. Wheat Grain 35% 0% 
 Wheat Flour 60% 35% 
3. Maize 50% 50% 
 Maize flour 50% 50% 
4. Rice 75% 30% 
5. Sugar 100% 0% 
6. Cigarettes 35% 35% 
7. Matches 35% 35% WT/TPR/G/271 Trade Policy Review 
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   Item  Current official SI rate  Actual applied rate in 
Rwanda (stay of application)
8. Woven fabrics (Khanga  Kikoi Kitenge) 50% 50% 
9. Bed linen 50% 50% 
10. Sacks and bags 45% 45% 
11. Crown corks 40% 40% 
12. Primary cells and Primary batteries 35% 35% 
 
Source: EAC Secretariat, EAC Gazettes a nd various EAC Meeting Minutes 
45. There is provision within the EAC for a comprehensive review of the EAC CET every 
five years.  A five year comprehensive review of the CET and its SI list was undertaken in 2009.  
In 2010 a Council decision to retain the three band structure was taken.  The rates for items on the 
SI list remains to be agreed upon. 
3.3 E XPORT POLICY  
46. The achievement of high exports is essential to  delivery of Rwanda's economic and poverty 
reduction targets.  The Government of Rwanda is therefore making every effort to increase and 
sustain its participation in both regional and internat ional trade.  Rwanda's five year National Export 
Strategy (NES), under implementation since 2011, is the mechanism through which Rwanda will be 
transformed into a globally competitive export let economy. 
47. The priority sectors for the NES, in the short to medium term, are Rwanda's traditional export 
sectors; tea, coffee, tourism and mining.  The NES also aims to promote exports in nascent, non-
traditional exports sectors such as horticulture a nd business process outsourcing as well as several 
greenfield sectors.  The NES provides an action pl an to increase export growth with an emphasis on 
cross-cutting issues, targeted sector strategies and coordinated implementation of export policies.  
48. The Government is also developing a number of  strategies to drive export growth within 
the region.  The Distribution and Logistics Services  Strategy aims to transform Rwanda's logistics 
system from the current role as supply route serving landlocked locations to a new enhanced role that 
would incorporate logistics services with value a dded activities that support the export of high value 
products destined for regional and in ternational markets.  In addition to this, Rwanda is finalizing a 
strategy to support cross-border trade with the D RC and EAC.  This strategy focuses on the promotion 
of formal and informal exports of Rwanda n made produce to neighbouring countries. 
3.4 I NVESTMENT REGIMES  
49. The Government of Rwanda is committed to a ttracting FDI as a means to promoting a private 
sector led economy.  Rwanda is a recognised lead er in Africa in creating an enhanced business 
environment.  This is reflected in its rapid movement up the rankings of the World Bank's Doing Business Report and the WEF's Global Competitiveness Report.  Rwanda is hailed as the second most 
reformed country worldwide over the past six year s.  These reforms have made Rwanda one of the 
most attractive locations in the region for firm s to operate from and serv e to local and regional 
markets, particularly the DRC and Burundi. 
50. The Rwanda Development Board (RDB), estab lished in 2008, is the Government agency 
charged with promoting investment in Rwanda.  The RDB provides a one-stop-shop for investors, 
both foreign and local, to set up operations in Rwa nda.  The RDB brings key agencies responsible for 
the entire investor experience under one roof.  Th e RDB's Investment Promotion Team guides and 
supports potential investors in the laws, poli ces, incentives, investment climate and trends, East African Community WT/TPR/G/271 
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 opportunities, costs and sector specific information that  are applicable to them.  Aftercare is also 
provided by the RDB to support investors once their business is registered and operational.  
51. Rwanda is continuing efforts to further impr ove its business environment.  New commercial 
legislation has been drafted to further improve  the business climate with laws in the areas of: 
company law, secured transaction law, insolvency law, labour law, a law establishing the commercial 
court, and a law on the protection of intellectual property. 
52. Rwanda has prioritised attracting investment  in the following areas: (i) information, 
communication and technology;  (ii) tourism;  (iii) energy;  (iv) agriculture and agro-based industries, 
fishing and forestry;  (v) industry; (vi) re-e xport trade;  (vii) mining;  (viii) research; 
(ix) infrastructure;  and (x) waste recycling. 
53. Rwanda has bilateral investment treaties with Switzerland, Germany, South Africa, Mauritius, 
Belgium, Luxembourg and the United States, and double taxation treaties with Mauritius and 
Belgium.  Rwanda is a member of the Multilatera l Investment Guaranty Agency (MIGA) and the 
International Centre for the Settlement of Investment Disputes (ICSID). 
3.5 S ANITARY AND PHYTOSANITARY (SPS)  MEASURES  
54. Rwanda has yet to develop a written policy on SPS.  Currently the regulatory framework 
informing SPS is fragmented between various ins titutions and ministries.  The Government of 
Rwanda has recognised the challenges and complica tions this presents to the private sector when 
trying to meet SPS requirements.  As a result, th e Government is actively undertaking steps for a 
common SPS regulatory platform to be established.  This process is being led by the Rwanda Bureau 
of Standards (RBS). 
55. Rwanda, in cooperation with its' EAC partners  is moving towards greater harmonisation of 
standards of SPS measures within the community.  The EAC has developed a draft EAC SPS Protocol which aims at adopting and enforcing SPS measures at a regional level to minimize their negative 
impact on trade.  Rwanda has yet to adopt the protocol. 
3.6 I
NTELLECTUAL PROPERTY RIGHTS (IPR S) 
56. Rwanda is committed to the protection of intell ectual property rights.  Rwanda acceded to the 
Convention establishing the World Intellectual Prope rty Organization (WIPO) in 1983, as well as the 
Paris Convention for the Protection of Industrial Pr operty and the Bern Convention for the Protection 
of Literary and Artistic Works, in the same y ear.  These conventions were brought under the WTO's 
TRIPS Agreement in the 1986-1994 Uruguay Round.  In 1996, Rwanda acceded to the WTO and has 
therefore been subject to the TRIPS Agreement ever since. 
57. MINICOM facilitated the enactment of an IP La w in 2009, an IP Policy in 2011 and ratified a 
number of IP related Treaties including the Pate nt Cooperation Treaty (PCT), the Hague and the 
Madrid Agreements in 2009.  In 2011 Rwanda became the latest African country to join the African 
Regional Intellectual Property Organization (ARIPO). 
IV. TRADING ARRANGEMENTS 
58. A major pillar of Rwanda's economic policy, as outlined in its Vision 2020 document, is to 
work towards deeper penetration into regional and international markets.  As a landlocked country, 
the costs associated with trade are pa rticularly high for Rwanda.  At the same time Rwanda is reliant WT/TPR/G/271 Trade Policy Review 
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  on the cooperation of its neighbour s to ensure uninhibited access to por ts.  Through tariff reduction, 
trade facilitation, and regional cooperation the cost of trade can be reduced and Rwanda can better 
realise its ambitions set out in Vision 2020.  As a resu lt, Rwanda is signatory to  a number of bilateral, 
regional and multilateral trading arrangements.  
4.1 B ILATERAL AND REGIONAL TRADING AGREEMENTS  
59. Rwanda has bilateral trade agreements with Uganda, Burundi, Tanzania, Kenya, DR Congo, 
Congo Brazzaville, South Africa, Mauritius and other to facilitate movement of goods and persons.  
Rwanda is a member of various regional trade a rrangements.  Rwanda's participation in these 
arrangements not only increases opportunities for tr ade but also increases social and political 
cooperation.  
60. To overcome the membership problems in different Regional Economic Communities, in 
June 2007, Rwanda withdrew its membership fro m ECCAS and its application to join SADC 
4.1.1 E AST AFRICAN COMMUNITY (EAC) 
61. In 2007, Rwanda became a member of the East African Community (EAC) and began 
implementation of the Common External Tariff (CET) on 1 July 2009.  The treaty on the 
establishment of the Community envisages integration among the partner states from a Customs 
Union, to a Common Market, to a Monetary Union an d eventually to a Political Federation.  Rwanda 
remains committed to these targets and has alr eady begun the process of moving from a Customs 
Union to a Common Market through the implementation of the EAC Common Market Protocol. 
62. In addition to trade liberalization, Rwanda is also participating in a number of EAC 
programmes in the area of infrastructure, trade f acilitation, harmonisation is standards, defence and 
security and agriculture / food security.  
4.1.2 C OMMON MARKET FOR EASTERN AND SOUTHERN AFRICA (COMESA) 
63. Rwanda became a full member of the COMESA FTA in 2004.  As a member of the 
COMESA FTA, Rwanda has a Free Trade Area arrangement with 14 COMESA member states at zero rates on goods traded between them.  Rwanda adheres to COMESA Rules of Origin for trade 
with non-EAC COMESA member states. 
64. Due to membership of the EAC Customs Union, Rwanda does not intend to join the 
COMESA Customs Union which was launched in 2009.  The only possible solution to this multiple 
membership will be the harmonisation of COM ESA and EAC Common External Tariff (CET).  
However, Rwanda does support a number of CO MESA initiatives including implementation of the 
COMESA Simplified Trade Regime to support sm all traders, the COME SA Simplified Customs 
Clearance procedure, the Regional Customs Tran sit Guarantee (RCTG) and the COMESA Yellow 
Card Scheme.  These programmes are all aimed at reducing time and costs associated with transportation of goods within the region. 
4.1.3 T
HE COMESA-EAC-SADC  TRIPARTITE FREE TRADE AREA (TFTA) 
65. Rwanda acknowledges the complications arisi ng from overlapping membership of various 
regional communities.  Overlapping membership comp licates Rwanda's trade policy through a web of 
inter-related regional trade commitments with differing rules and ambitions.  East African Community WT/TPR/G/271 
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 66. To this end, the country is party to the Tripartite FTA initiative among the three RECs, 
COMESA, SADC and EAC.  Through engagement in the Tripartite initiative, Rwanda aims to 
support the harmonisation of the trade regimes of the three RECs.  Through the TFTA will open up 
new trade opportunities with SADC members not party to COMESA, including South Africa.  
67. The TFTA also provides the opportunity to in crease the pace of integration within the 
EAC by removing the obstacles presented as a r esult of differing REC membership of the EAC 
partner states. 
4.1.4 E CONOMIC COMMUNITY OF THE GREAT LAKES COUNTRIES (CEPGL) 
68. Rwanda was a founding member of the Economic Community of the Great Lakes Countries 
(CEPGL) in 1976 along with Burundi and the DRC.  Following its collapse in the 1990s the 
community was re-launched in 2007.  CEPGL's five priorities are:  Peace and security, democracy and 
good governance; agriculture and food security; ener gy, infrastructure and communication; education, 
research and investments. 
69. The CEPGL introduced a common travel pass fo r residents of member states in 2009.  
Holders of this document are allowed free moveme nt within the community for a period of up to 
three days.  The introduction of the pass has fac ilitated small scale trade in goods and services in 
Rwanda's border communities. 
4.1.5 E UROPEAN UNION -EAST AFRICAN ECONOMIC PARTNERSHIP AGREEMENT  
70. Rwanda has been negotiating the EPAs as part of the EAC arrangement since October 2007. 
In November 2007 the EAC initialled the framework  EPA Agreement which includes trade in goods, 
fisheries and a development clause.  Negotiations  are still under way for a comprehensive EPA and 
Rwanda remains committed to finalizing the process as part of the EAC negotiating bloc. 
4.2 M ULTILATERAL COMMITMENTS  
4.2.1 W ORLD TRADE ORGANIZATION (WTO) 
71. Rwanda has been a member of the WTO since 22 May 1996, having been a GATT 
Contracting Party since January 1966.  Rwanda is  active in negotiations unde r the Doha Development 
Agenda where it shares the position of the African Group, the ACP Group and the LDC Group.  In 2005 and 2009 Rwanda was coordinator of the Afri can Group in the negotiations on trade facilitation. 
72. Rwanda's position in the various negotiations is very much a reflection of the unique 
challenges the country faces as a small, landloc ked, developing economy.  In negotiations on 
agriculture, Rwanda is a proponent of improved ma rket access and the reduction of trade distorting 
subsidies and tariff peaks, and elimination of tariff escalation.  Rwanda is also calling for Duty-Free-Quota-Free treatment for all exports from LDCs.  In Non-Agricultural Market Access (NAMA) 
negotiations, Rwanda advocates the reduction of non-tari ff barriers.  Rwanda is also in support of the 
LDCs Services waiver in services negotiations.  
73. Rwanda made notifications to the WTO on Customs Valuation, Technical Barrier to Trade 
(Enquiry Points) and Rules of origin.  To date, Rwanda has not been involved in any dispute, as complainant, respondent, or third part in the WTO.  WT/TPR/G/271 Trade Policy Review 
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  74. Rwanda enjoys non-reciprocal trade preferen tial access to the Europ ean Union market under 
the Cotonou Agreement and the "Everything But arms" initiative.  She al so has access to the 
United States market under the African Gr owth and Opportunity Act (AGOA) and the 
Generalized System of Preferences (GSP). 
4.3 AID FOR TRADE  
75. As a least development country (LDC), Rwanda has benefited substantia lly from the role Aid 
for Trade plays in mainstreaming trade into  the development agenda.  Between 2005 and 2010 
Rwanda received a total of US$1. 2 billion in aid for trade commitments in the areas of transport and 
storage, agricultural, energy, banking and busin ess sectors.  This process has been led through the 
Development Partners Coordination Group under the chair of the Ministry of Finance and Economic 
Planning.  
76. Since 2004, Rwanda has undertaken the process of Integrated Framework (IF) starting with 
the Diagnostic Trade Integration Study (DTIS) to an alyse the barriers to tr ade, identify opportunities 
for growth and build consensus on key priorities fo r action.  The Government of Rwanda has shown 
tremendous support and commitment to the IF process by setting up the IF NIU in 2005, providing 
premises to the NIU staff, and trade related trainings up to now. 
77. The focus of the National Implementation Unit (NIU ) to date has been to effectively steer the 
IF process in the country and increase their owners hip of Trade Related Technical Assistance to 
maximize the benefits being deri ved from the implementation of the IF.  Programmes have included; 
Trade mainstreaming in Government policies an d strategies, resource mobilization and donor 
coordination and carrying out different tr aining programs following needs assessment.  
78. The NIU updated Rwanda's DTIS in July 2012.  A number of challenges were identified in 
the DTIS that Rwanda still needs to address.  Th ese challenges have been separated into two groups; 
(1) cost of business which includes weaknesses in in frastructure, trading across borders, the business 
environment and vocational trainings, and (2) cha llenges with growth opportunities including limited 
value addition, low export diversif ication, lack of investment. 
 East African Community WT/TPR/G/271 
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 REPORT BY TANZANIA 
I. INTRODUCTION 
1. During the period under review (2006-11) Ta nzania's economy experienced the same 
contagion effects of the global economic crisis such as oil price rise, financial crisis and increase in 
food prices amid draught, floods and other natural calamities.  Despite the challenges encountered 
during the global economic crisis, Tanzania was ab le to retain solid macro-economic fundamentals 
due to prudent fiscal and financial policy manageme nt.  The real GDP growth rate for the period 
under review was 6.8 per cent.  On the other hand, inflation rate accelerated to 12.7 per cent in 2011 
from 7.3 per cent registered in 2006 largely due to increase in global oil prices and rise in prices of 
food following unfavourable weather conditions in some parts of the country and neighbouring 
countries.  
2. During the same period, Foreign Direct Invest ment [FDI] inflows recorded an impressive 
increase from US$597 million in 2006 to US$1,095 million in 2011, an increase of 83.4 per cent.  The 
ratio of external debt to GDP on the other side, stood at 43.2 per cent at the end of April 2012, up from 39.6 per cent at the end of June 2011.  Provisi onary, results of the latest debt sustainability 
conducted in March 2012, indicate that, the present va lue of GDP was 18.9 per cent compared to the 
sustainability of threshold of 50 per cent.  Th e Gross Official Reserves increased to US$3761.2 
million, up from US$2136.9 million recorded in 2006. 
II. MACROECONOMIC DEVELOPMENTS 
(i) GDP performance 
3. Real GDP growth remained buoyant during 2011 despite power rationing that affected 
manufacturing and trade activities.  Real GDP grew by 6.4 per cent compared to the projected level of 
6.0 per cent [chart 1.1].  
4. Most of the GDP growth came from trade and repairs [18.2 per cent], Transport and 
communication [13.8 per cent], agriculture [12. 6 per cent], manufacturing [11.8 per cent], 
construction [9.8 per cent], and real estate [10.3 per cent].  WT/TPR/G/271 Trade Policy Review 
Page 60 
  
  6.77.1 7.4
6.07.0
6.4
012345678
2006 2007 2008 2009 2010 2011Chart 1
Real GDP growth
Per cent
Source:  The Economic Survey (2011). 
(ii) Inflation Development 
5. Annual average headline inflation rate was 12.7 per cent in 2011 compared with an average 
of 5.5 per cent in 2010. [Chart 1.2] This developm ent was mainly on account of high global oil prices 
and rising prices of food following unfavourable weather condition in the EAC region.  Annual 
headline inflation, which had reached a peak of 19.8 per cent in December 2011, started easing in 
January 2012, and was 17.4 per cent in June 2012,  following improved food supply in the region and 
stability in global oil prices. 
7.37.010.312.1
5.512.7
02468101214
2006 2007 2008 2009 2010 2011Chart I. 2
Annual headline infl ation rates, 2006-11
Per cent
Source:  The Economic Survey (2011). 
 East African Community WT/TPR/G/271 
 Page 61 
 
 
 (iii) National Debt Developments 
6. By the end of December 2011, national debt stood at 18,819.4 billion shillings compared 
to 16,708.2 billion shillings recorded in the si milar period in 2010, representing an increase 
of 12.6 per cent.  Out of the total national debt stock, an amount of 15,928.8 billion shillings was 
public debt and a total of 2,890.6 billion shillings was private debt.  The increase in the national debt 
was mainly on account of new disbursement of exte rnal debt, relatively large issuance of domestic 
debt compared to maturing obligations, and deprecia tion of Tanzanian shilling s against the US dollar.  
(iv) Fiscal Performance 
7. Tanzania's fiscal performance had a steady im provement over the review period for instance 
during the fiscal year 2011/12 until March, overall revenue collection was TZS 5157.6 billion 
being 99 per cent of the estimated TZS 5217. 2 billion.  Tax revenue  was TZS 4765.5 billion 
being 106 per cent of the estimated collection.  These good results were due to improvements of administrative measures taken by the TRA including ensuring that electronic gadgets (EFD) are properly used by businessmen a measure that began in July 2010.  However, gross public debt as a 
percentage of GDP in 2011 was 51.9 per cent compared to 43.7 per cent in 2006. 
(v) Balance of Payments 
8. During the period under review, total merc handise export increased from US$1, 917.6 million 
in 2006 to US$5,097.7 million in 2011.  The value of non-traditional exports continued to increase 
from US$1,476.2 million in 2006 to US$3764.2 million in  2011.  The value of manufactured exports 
also increased from US$195.8 million in  2006 to US$861.5 million in 2011. 
-5,000-4,000-3,000-2,000-1,00001,000
2006 2007 2008 2009 2010 2011
Goods balance Current account Overall balanceChart I. 3
Trend of Balance of  Payments, 2006-11
Source:  The Economic Survey (2011). 
 
(vi) Exchange Rate 
9.  The value of Tanzanian shilling continued to de preciate whereby in 2011 it fell by 10.3 per 
cent reaching an average of TZS 1, 579.5 per US$ compared with TZS 1432.3 in 2010.  Depreciation WT/TPR/G/271 Trade Policy Review 
Page 62 
  
  of Tanzania Shilling was due to various reasons including an increase of imports of goods and 
services against exports, the difference in inflation ra te by our trading partners the countries we trade 
(vii) Employment 
10. In 2009, active labour force was estimated to have  remained at 20.6 million according to the 
Integrated Labour Force Survey (ILFS) of 2005/06.  The Survey also revealed that, 18.3 million 
people were employed, out of which, 9.0 million we re male and 9.3 million we re female.  In 2009 the 
informal sector generated more employment opportun ities compared to the formal sector.  This was 
due to rural-urban migration, which has compelled many people to indulge in informal activities due 
to simplicity in setting them up. Moreover, ag riculture remained the leading employer of 
about 70 per cent of the labour force.  In 2008, Ta nzania formulated the National Employment Policy, 
aiming at increasing employment opportunities thus enha ncing income to Tanzanians.  In that spirit 
the Government in collaboration with the ILO estab lished regional employment committees in Lindi, 
Mtwara and Morogoro.  In addition, in August 20 11, the Government aims at conducting a national 
census which will provide the current status of  the labour force and the economy in general. 
(viii) Economic Outlook  
11. Tanzania's economy is expected to sustain st rong growth in 2012 and beyond, supported by 
improvement in energy supply, prospects of increase in foreign direct investment particularly in gas 
exploration, and infrastructure development.  Real GDP is projected to grow by 6.8 per cent in 2012 
and 7 per cent in 2013.  Consistent with a general decline in global inflation, improvement in food 
supply both domestically and regionally, expected stability in global oil prices and shilling exchange 
rate, inflation is expected to slow down in the near term.  However, consideri ng the nature of inflation 
that has been experienced in the recent past, a ttainment of low infla tion will depend not only on 
coordination of monetary and fiscal policies, but al so deliberate policies that will address supply side 
challenges including increasing capacity for food production, as well as capacity to stabilize food 
supply through improved transportation and ma nagement of strategic food reserves.   
III. MEDIUM TERM POLICY FRAMEWORK  
12. In order to strengthen and ensure sustainabl e economic growth, a well articulated programmes 
have been kept in place.  These among others, incl udes national strategy for growth and reduction of 
poverty (NSGRP) and the Tanzania five year Deve lopment plan (2011/12- 2015/16) which implement 
the Tanzania Development Vision 2025, aiming at tr ansforming Tanzania into middle-income country 
by 2025.  This is envisaged to happen through the ta rgeting of strategic priority interventions to move 
Tanzania to a higher growth trajectory coupled with a shift from an agricultural-based to an 
industry-based economy. 
13. Five core priorities have been targeted under th e plan's strategy to unleash Tanzania's latent 
growth potentials.  They include: 
 Infrastructure, and in particular large investme nts in energy, transport infrastructures (port, 
railway, roads, air transport), water and sanitation and ICT. 
 Agriculture, focusing on the transformation of  agriculture for food self-sufficiency and 
export, development of irrigation particularly in selected agricultural corridors, and high value crops 
including horticulture, floriculture, spices and vineyards.  East African Community WT/TPR/G/271 
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  Industrial development specifically targeting industries that use locally produced raw 
materials such as textiles, fertilizer, cement, coal, iron and steel, as well as development of special 
economic zones, using publ ic private partnerships. 
 Human capital and skill development, w ith an emphasis on science, technology and 
innovation; and 
 Tourism, trade and financial service. 
14. Under this plan the country has targeted a GDP  growth rate of 8 per cent on average for the 
next five years, which can be assimilated to th e country's "take-off period".  The efficient 
implementation of the plan will enable the country  to target growth rates of about 10 per cent on 
average from 2016 to 2025.  To this end, the pl an identifies and hence emphasizes on the creation of 
prerequisite conditions for the success of its  implementation, which include promoting 
macroeconomics stability, ensuring environmental su stainability, a conducive business environment, 
good political and economic governance, aggressive  investment promotion and proper land use 
planning and property rights management. 
15. It is worth noting that the MTPF recognizes international trade and value addition as 
fundamental to the country's economic growth pr osperity.  Tanzania remains committed to open 
economy with the intension to integrate further in to the multilateral trading system, thus becoming a 
new competitive player on the regional and global stage 
IV. TRADE RELATIONS 
16. Tanzania considers industry and trade to be a significant driver of the economic 
diversification; therefore since the last TPRM the c ountry continued to be more outward looking trade 
policy and using various instruments to stimulate trade growth.  The bilateral trade and regional 
cooperation are stepping stones for greater coopera tion and achieving market access.  Tanzania's 
direct interest have been centered on securi ng expanded market access for goods and services, 
simplification of rules that hamper attraction of direct investments and addressing supply side constraints. 
(i) East African Community 
17. Tanzania is one of founding members of the E ast African Community and it is effectively 
participating in the integration process.  The EAC which started at the level of Customs Union has 
now reached a Common Market stage and negotia tions for Monetary Union have started. 
18. The value of goods Tanzania exported to othe r East African Community (EAC) countries 
increased by 70.6 per cent from US$263.8 million in 2009 to US$450.0 million in 2010.  This was 
mainly attributed to increased exports to Kenya.   The value of goods exported to Kenya increased 
by 67.6 per cent to US$297.3 million in 2010.  In addition, goods exports to Kenya accounted 
for 66.1 per cent, Rwanda 12.2 per cent, Burundi 11 .3 per cent and Uganda contributed 10.4 per cent 
of all goods exported to the Community.  
19. The value of goods imported from the EAC count ries decreased to US$285.2 million in 2010 
from US$310.5 million in 2009, equivalent to a decrease of 8.2 per cent. 
20. Balance on merchandise trade between Tanzania and other EAC countries registered a surplus 
of US$164.8 million in 2010 compared to a deficit of US$46.7 million in 2009. WT/TPR/G/271 Trade Policy Review 
Page 64 
  
  (ii) Southern Africa Development Community  
21. Tanzania is a member of Southern African Development Community (SADC) which is now 
implementing the SADC Free Trade Area which was launched in 2008. 
22. In 2010, the value of goods exported to Sout hern African Development Community (SADC) 
member countries increased by 67.0 per cent to  US$625.1 million from US$374.2 million in 2009.  
This was mainly attributed to increased exports  to South Africa and Democratic Republic of 
Congo (DRC).  Out of the total exports, 66.7 per cent went to South Africa and 21.9 per cent to DRC.  
23. The value of goods imported from SADC memb er countries increased by 12.9 per cent to 
US$827.7 million in 2010 from US$733. 2 million in 2009.  This was due to the increase in imports 
from South Africa, Swaziland, Zambia and Mozambique.  
24. Balance on merchandise trade between Tan zania and other SADC member countries 
registered a deficit of US$202.6 million in 2010 co mpared to a deficit of 417.8 million in 2009. 
(iii) The World Trade Organization 
25. Tanzania was a contracting party to the Gene ral Agreement on Tariffs and Trade (GATT) and 
is a founding member of the WTO since 1995.  Tanzania  supports all the basic principles of the WTO.  
Being a fully member of WTO, Tanzania is  bou nd by all WTO Multilateral Agreements and has to 
comply with the WTO agreements as well as take  advantage and  opportunities arising from these 
agreements and trade negotiations. 
26. The Government is undertaking efforts to bu ild Tanzania's business community capacity to 
access global markets and increase volumes of exports, while conforming to trade rules, especially 
those of MTS and WTO.  Through Tanzania Mission in Geneva, Tanzania is participating effectively 
in various negotiation groups particularly in Tr ade Facilitation, Trade in Services, LDC group, 
Agriculture to mention the few. 
27. Tanzania is deeply committed to the ne gotiating process under the Doha Development 
Agenda because we believe that the successful conclusion of the round will bring benefits to all 
members.  Thus we remain fully committed to fa ir and equitable rule based multilateral trading 
system, supportive of the development endeavors of members being the key basis of relationship with 
trading partners.  We appreciate the support exte nded to us through DTIS and eventually TTIS 
28. As regards to the TRIPS Agreement under whic h the LDCs, Tanzania inclusive, are given 
flexibilities in the cause of implementing that agre ement with reflections of Doha declaration on 
public health and access to medicine.  It is appare nt that there are impediments to utilize the referred 
to flexibilities taking into account the prevailing econom ic and administrative constraints that have an 
impact on the creation, commercialization and management of intellectual property assets. 
29. The use of intellectual property as a tool for deve lopment has not been fully appreciated in the 
overall performance the economy and the concept of  intangible assets and their deployment as an 
integral part of various activities of key sectors is not well understood.  
30. Technical assistance and capacity building based  on the priority needs for implementing the 
TRIPS Agreement are of paramount importance to harness technology transfer in the endeavor to 
achieve social and economic transformation.  Adhere nce with Article 66:2 of the TRIPS Agreement is East African Community WT/TPR/G/271 
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 fundamental towards compliance with that Agre ement complemented under by initiatives undertaken 
bilaterally, through feasible projects.  
31. Tanzania is currently engaged in formulati on of a National Intellectual Property Policy, 
parallel with spear heading the process for en acting the Industrial Property Legislation. 
V. SECTOR DEVELOPMENT 
(i) Services Sector 
32. Services trade has increased dr amatically in recent years, and it is increasingly recognized 
that a growing and efficient services sector is crucial to the development process.  This is because of the growing importance of the services sector as a direct contributor to the gross domestic product 
(GDP) growth, employment, and poverty reduction a nd also because of the sector's critical importance 
in supporting and facilitating manuf acturing, production and trade ac tivities (Rita Bhowmik, 2003).  
33. The growth rate of service economic activities in  Tanzania was 8.2 per cent in 2010 compared 
to 7.2 per cent in 2009.  The growth rate of all services sub economic activities increased in 2010 
owing to the recovery of activities that were affected by the global financial crisis (GFC) such as financial intermediation;  hotels and restaurants; trad e and repair; and transport.  The share of services 
activities to GDP was 43.9 per cent in 2010 compared with 43.6 per cent in 2009 
(Economic Survey, 2010).  
34. Available data confirm the potential of the ser vice sectors in Tanzania.  For instance, data 
from the Tanzania Investment Report show that th e flow of FDI into the service sector amounted 
to 7.9 per cent in 1999.  Clearly there is room a nd potential for realizing higher FDI inflows into the 
service sectors.  Available data also shows that Tanzania is yet to realize significant earnings from 
remittances abroad. 
35. The service sectors for the period under review continued to contribute significantly to GDP 
growth.  The share of services sectors to GDP in  2006 was 40 per cent and increased to 49.9 per cent 
in 2011. The growth rate and contribution to GDP  for some subsectors in 2011 are as follows:   
 The trade and repairs sub-activity grew by 8.1 per cent in 2011, compared to 8.2 per cent 
in 2009.  The contribution of the trade and repair s sub-activity to GDP was 12.2 per cent in 2011, 
compared to 12.1 per cent in 2010.  
 The hotel and restaurants sub activity (including tourism), grew by 4.6 per cent in 2011, 
compared to 6.1 per cent in 2010.  The contribution of the hotel and restaurants sub activity to GDP was 2.3 per cent in 2011, as it was in 2010.  
 The transport sub-activity grew by 6.7 per cent in 2011 compared to 7.0 per cent in 2010.  
The contribution of transport sub-activity to GDP w as 5.3 per cent in 2011, compared to 5.1 per cent 
in 2010.  
 The growth rate for communication sub-activity was 19.0 per cent in 2011 compared 
to 22.1 per cent in 2010.  The contribution of communication sub-activity to GDP continued to 
be 2.2 per cent in 2011 compared to 2.1 per cent in 2010.  WT/TPR/G/271 Trade Policy Review 
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   The financial intermediation services sub-activit y grew by 10.7 per cent in 2011 compared 
to 10.1 per cent in 2010.  The contribution of financial intermediation sub-activity to GDP 
was 1.8 per cent in 2011 as it was in 2010.  
 The growth rate of real estate and business services sub-activity was 6.5 per cent in 2011 
compared to 7 per cent in 2010. The contribution of real estate and business services to GDP was 8.6 
per cent in 2011 compared to 8.8 per cent in 2010.  
 The rates of growth in education and health  sub-activities were 7.1 and 5.4 per cent in 2011 
compared to 7.3 and 6.9 per cent in 2010 respectively.  The contribution of education and health sub-activities to GDP were 1.4 and 1.7 per cent respectively in 2011.  
 Construction sub activities grew by 9 per cent in 2011 compared to 10.2 per cent in 2010.  
The share of construction sub-activity to GDP was 8 per cent in 20101 as it was in 2010.  
(ii) Agriculture Sector 
36. Agriculture is the mainstay of the Tan zanian economy.  Around 77.5 per cent of the 
population lives in rural areas and derive their livelihood mostly from this sector.  Despite the fact that 
the country has devoted major effort into irrigation,  still the large part of the sector is dominated by 
subsistence farming that depends on rain fed agricu lture.  The sector grew at 3.6 per cent in 2011 
compared to 4.2 per cent in 2010 and that of 6 per cent in 2006.  
37. The contribution of crop subsector was 3.5 comp ared to 4.4 in 2010, livestock 3.9 compared 
to 3.4 in 2010 and forest 3.5 compared to 4.1 in 2010.  The decrease in the gr owth rate has been due 
to a number of challenges among others includes, lack of capital and access to affordable credit, 
droughts (2009/10) and poor infrastructure.  Though its contribution to GDP declined to 23.7 in 2011 
compared to 24.1 in 2010 and 26. 2 in 2006 agriculture sector remains a key driver of social and 
economic development in Tanzania.  It has the poten tial to lift many of the poor out of poverty and 
thereby contribute to achieving the country's develo pment goal of graduating into the middle income 
economy by 2025.  
(a) Crops  
38. The country produces both food and cash crops which makes it to be self-sufficient in food 
and a net exporter of cereals when there are en ough rains.  It produces between 95 per cent 
and 97 per cent of its food requirements and has co mparative advantage in food production for export 
to countries in the region.   
39. Low performance of the sector has impeded effo rts to reduce the high rural poverty levels. 
The low performance of the sector has been attributed  to a number of factors such as climate change, 
low application of appropriate technology, inadequa te markets and value addition.  In this respect, 
Tanzania puts more emphasis on transformation of  agriculture, addressing the key challenges through 
Agricultural Sector Development Strategy (ASDS) in year 2003.  
40. The agricultural growth rate is still low compared  to the set goal of 6 per cent in Five Years 
Development Plan (2011/12–2015/16).  The low growth rate of the sector has been attributed by low 
investment in the sector.  Through implementation of Agricultural Sector Development Programme (ASDP) in year 2006, Tanzania emphasis on tran sformation of agriculture through accessibility and 
usage of farm inputs, strengthen crop research, strengthen crop extension services, increase number of East African Community WT/TPR/G/271 
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 crop extension workers, farmers' fields schools, agricultural mechanization, agricultural irrigation 
development, Crop pest and diseases management. 
41. Production of the major traditional export crops has increased over the past three years.  
Traditional export crops include, among others, coffee, cashew nuts, sisal, cotton, tea, tobacco and 
horticultural crops.  Non-traditional crops are t hose whose export depends on surplus production; 
mostly pulses, oil seeds and spices.  Of recently the horticultural crops has emerged to be one of the 
leading export crops. 
42. Although agriculture is important for poverty reduction as most of the poor work in this 
sector, research has shown that the agriculture multiplier in Tanzania is  three.  This means that for 
every extra unit of output produced, total contri bution to the local economy is three units.  The 
objective is thus to diversify further the export b asket through building competitive advantages in new 
dynamic products and sectors in which Tanzania al ready has comparative advantages.  Evidence of 
the changing export basket is appa rent in the data on exports.  
43. In 2003, 21.4 per cent of exports were comprised of traditional crops.  By 2011, the share of 
traditional crops had declined to 16.8 per cent resu lting primarily from exports of gold, fish products, 
and other non-traditional products which accounted for 18.1 per cent.  
Table 1  
Average price of main export produc ts from 2006-2011 US dollars per tone 
Commodity 2006 2007 2008 2009 2010 2011 
Coffee 1,931.89 2,164.58 2,203.36 1,991.00 3,318.00 3,609.00 
Cotton 987.80 991.65 1,321.42 1,108.00 1,306.00 1431.00 
Sisal 751.20 849.67 1251.37 - - - 
Tea 1,358.71 1,283.23 1,575.27 1,798.0 1,125.00 1,7410.0 
Tobacco 2,779.48 2,327.31 3,041.22 3,762.0 3,363.00 3,799.00 
Cashew Nut 855.02 1,848.25 730.09 720.00 730.00 914.00 
Cloves 2,637.65 2,694.07 3,577.52 3,038.00 3,173.00 3,443.00 
 
Source : Economic survey 2008 and 2011. 
44. Production of traditional export crops such as cotton, cashew nut, pyrethrum, sisal and tea 
increases between (3-38) percent in 2011/12 comp ared to year 2010/11.  However production of 
traditional export crops such as tobacco and co ffee decreases between 3-45 per cent in 2011/12 
compared to year 2010/11.  
45. Despite the decrease in coffee production the va lue of coffee exports increased, on average, 
from US$2.56 to US$3.49 per kilogram which transl ates to an increase of 36 per cent for Arabica 
(mild and hard varieties).  Robusta coffee in creased by 22 per cent over the same period.  
The increases were due to increased quantity of co ffee exported and rise of price of the crop on the 
international market.  About one third of coffee produ ced is mild Arabica and the rest is hard Arabica 
and Robusta.  The decrease on coffee production is due to climate changes and shortage of short rains 
season in coffee growing areas which causes dryness of flowers in turn it falls in low season cycle.  
Exportable coffee is mainly sold through auctions conducted at Moshi by the Tanzania Coffee Board, 
while in the internal market;  coffee is  bought from farmers at designated posts.  
46. The reduction in tobacco production is due to low market price in 2010/11 as well as decrease 
consumer demand in the world market hence re duces morale of farmer s on tobacco production. WT/TPR/G/271 Trade Policy Review 
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  47. Tanzania is the fourth country in the worl d in the production of cashew nuts.  Cashew 
production employs about 250,000 small farmers mainly  in the southern coastal regions.  Production 
of the crop, in 2011, was up to 160,000 tons from 121,070 in 2010.  In 2011, value of exports increased from US$96.9 million to 107.0 million or by 10 .4 per cent compared to the year 2010.  The 
increase in the value of exports was due to rise of prices on the international market, though the 
quantity exported fell by 4.2 per cent from 100,600 tons in 2010 to 96,400 tons in 2011. 
48. Cotton production increased in 2011 by 52 per cent from 250,000 tons up to 163,644 in 2010.  
However, the quantity exported fell from 67,600 in 2010 to 40, 300 in 2011 or by 40 per cent.  Despite the decrease in the quantity exported to  the world market, the value of export rose 
by 26.6 per cent to US$84 million from 61.6 million in 2010 because the price of cotton in the world 
market rose from US$1,241.9 in 2010 to 1,529 per ton in 2011.  Generally, in 2011, Traditional crops 
accounted for 13.1 per cent of total exports. 
49. The rise of horticulture and floriculture in nor thern Tanzania has had a dramatic effect on 
the economy.  Production of traditional export crops such as horticulture and floriculture increases 
between 3-38 per cent in 2011/12 compared to 2010/ 11.  Exports of horticulture and floriculture 
products have been rising in recent years.  Over th e past three years (2009-11) the value of exports has 
been, on average, US$33.5 million.  In 2011, hor ticulture and floriculture exports increased 
by 18.3 per cent;  from US$30.8 million in 2010 to US$36. 4 million.  Investment in this subsector has 
seen an upward trend and expansion in the producti on has seen the large estates providing market 
linkages to the EU for smallholder farmers.  The result has been the development of local 
internationally competitive farms th at meet EUREPGAP standards. 
(b) Livestock 
50. Tanzania increased heads of livestock by 7 per cent from 96.4 million to 108.2 million 
between 2010 and 2011.  Livestock contributes about 16 per cent to agriculture and about 3.7 per cent 
to GDP.  Although total contribution of agriculture  to GDP has declined, that of livestock to 
agriculture rose by 3 per cent from 13 per cent in 200 6.  Generally the subsector grew by 3.9 per cent 
in 2011.  Exports of livestock production increased by 108 per cent in 2011 compared to 2010.  Most 
exports were to the United Arab Emirates, Kuwa it, Oman, Malawi and Democratic Republic of 
Congo (DRC).  
51. On the other hand, exports of live animals increased by 8 per cent from 1,662, 235 in 2010 to 
1,798, 397 heads in 2011 mostly to Comoro, Kenya and Rwanda. 
52. Dairy production grew by 5.2 per cent from 1.65 billion litres produced in 2010 to 1.74 billion 
in 2011.  Sixty-five per cent of dairy production was from local breeds and the rest from cross-breeds.  
Processed milk increased by 6.2 per cent from 105, 38 0 litres processed in 2010 to 112, 400 in 2011. 
53. The number of chickens remains the same in 2011 as it was in 2010 at 58 million.  However, 
the number of eggs produced during the same pe riod increased by 15 per cent from 2.9 billion 
to 3.34 billion pieces.  Productio n of poultry also increased by 15  per cent from 35.6 million in 2010 
to 38.4 million in 2011. 
54. About 40 per cent of livestock production is from beef, 30 per cent from dairy products 
and 30 per cent from poultry and small stock production.   There is also tremendous potential in the 
livestock sector which maintained steady growth at 5 per cent and the fishing sector which grew 
by 6.9 per cent in 2004. East African Community WT/TPR/G/271 
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 (c) Forestry 
55. Tanzania has about 35.3 million hectares of fo rests and woodlands, and 15.3 million hectares 
of National Reserves, with a variety of tourist attract ions.  The subsector grew by 3.5 per cent in 2011.  
Tanzania's forestry subsector is estimated to c ontribute approximately 2.5 per cent to GDP, a fall 
of 1 per cent from its contribution in 2010.  In the pa st few years, the export value of forestry products 
fell by 7.1 per cent from US$366,783.3 in 2010 to US$340,810.7 in 2011.  The wood industry accounts for about half of the subsector's contribu tion to GDP.  There are 16 plantations covering an 
area of 80,000 hectares with employment amounting to 700,000 persons a year.  
56. The Government has a policy the overall goal of which is to enhance the contribution of the 
forest subsector to the sustainable development of Tanzania, and the con servation of its natural 
resources.  Current restrictions on the export of logs and sewn timber of more than 4 inches thickness, is in line with implementation of this policy a nd a reason for the fall in export earnings of the 
subsector. 
57. The rise of horticulture and floriculture in nor thern Tanzania has had a dramatic effect on 
the economy. Exports of horticulture and floricultu re products have been rising in recent years.  
Over the past three years (2009-11) the value of  exports has been, on average, US$33.5 million.  
In 2011, horticulture and floric ulture exports increased by 18.3 per cent;  from US$30.8 million 
in 2010 to US$36.4 million.  Investment in this su bsector has seen an upward trend and expansion in 
the production has seen the large estates providing mark et linkages to the EU for smallholder farmers.  
The result has been the development of local inte rnationally competitive farms that meet EUREPGAP 
standards. 
58. The success of the fish industry, based on fresh water fish resources in Lakes Victoria and 
Tanganyika has resulted in tangible economic and social benefits.  The sub sector grew only 
by 1.2 per cent in 2011, but its contribution to the GDP remained constant at 1.4 per cent. The 
fisheries industry employs over 177,527 people directly with 80 per cent of them employed in fresh water fishing.  Overfishing, pollution, inadequate  fishing gear and practices, lack of capital and 
appropriate storage facilities contributed to the downward trend in the total fish catch over the last 
three years.  Between 2010 and 2011, fish e xports fell by 8.4 per cent to US$137.7 million 
from US$150m (08/07=13 per cent, 09/08=-16 per cent , 10/09=-3 per cent and 11/10=-8.4 per cent).  
Ninety nine per centum (99 per cent) of fish caught are by artisan fishermen.  In 2011, 342,066 tons were caught, 85 per cent of which were from fresh waters (lakes and rivers) and 25 per cent from 
marine waters.  The potential for increasing the catch in the marine waters along a coastline of more 
than 800 kilometres is high.  
59. This success has come from the efforts of the private sector.  The Government has a number 
of programmes to support farmers.  Liberalization policies continue to be vital and the country can 
benefit from the liberalization of agricultural ma rkets that has emerged from Doha Development 
Agenda. 
(iii) Industrial Sector  
60. Tanzania's Industrial Sector is led by Sustaina ble Industrial Development Policy (SIDP) 2020 
and Integrated Industrial Develo pment Strategy (IIDS 2010-25) with an objective among others of 
putting more thrust in addressing the supply side constraints to increase the exports volume and 
enhance competitiveness entailed by the existing comp arative advantages.  The main focus of the WT/TPR/G/271 Trade Policy Review 
Page 70 
  
  policy and its strategy is to encour age value addition to the raw materials to realize more value for the 
products that will fetch better prices at the domestic, regional and international markets. 
61. The strategy has identified some important subsectors to concentrate on basing on access to 
markets, length of value chain, availability of resources and comparative advantage Tanzania has in 
the fertilizer and chemical, iron and steel, tex tile, agro-processing (focusing on oil seeds, cashew nuts, 
fruits, vegetables and milk), leather and leather products, light machinery and hospitality industry 
subsectors. 
62. Establishment of the coastline as a naïve of industrial development and export promotion 
aims to develop and use the ports economically and other resources available efficiently in 
development corridors and infrastructure including ro ads, railways and electricity.  During the period 
under review, the industrial sector performance  has been assessed b ased on its percentage 
contributions to GDP, exports and employ ment among others as detailed below.  
63. The manufacturing sector in Tanzania during the period 2006 to 2011, continued to grow 
significantly.  Such a growth has been attribut ed largely to an implementation of policies and 
strategies in place that sets out enabling environment for investment undertakings in various sectors of 
industrial production in the country.  For the pe riod 2006 to 2008 the sector registered a positive 
growth as it increased from 8.5 per cent in 2006 to  9.9 per cent in 2008.  However, this growth 
declined to 8 per cent in 2009 and 7.9 per cent in 2010 due to the impact of the global financial and 
economic crisis that hit the world in 2008.  As such its aftermath conti nued to affect the growth of this 
sector until 2011 when growth reached 7.8 per cent.  The period under review recorded an average 
growth of 8.47 per cent.  Likewise the sector's contribution to the GDP increased from 9 per cent 
in 2006 to 9.7 per cent in 2011 equal to approximately 9.3 per cent.  
64. From 2006, the contribution of manufacturing sector to exports continued to increase 
from 11.24 per cent in 2006 to 19.43 per cent in 2011.  Moreover, the growth of industry in the contribution of non-traditional exports increased from 13.81 per cent in 2006 to 22.88 per cent in 2011 as shown in Figure 1 and Table 1 below. East African Community WT/TPR/G/271 
 Page 71 
 
 
 8.9 9.0 9.2 9.4 9.5 9.6 9.7 9.68.5 8.79.9
8.0 7.9 7.89.311.215.323.8
17.726.1
19.4
11.813.816.032.3
15.025.9
22.9
05101520253035
2005 2006 2007 2008 2009 2010 2011Contribution to GDP Growth of the sector
Contribution in exports Contribution of non-traditional exportsFigure 1
Growth trend of the industrial sector indicators, 2006-11
Per cent
Source:  Ministry of Finance, 2011. 
 
Table 2 
Selected efficiency indicators in the manufacturing sector 
Year Contribution to 
GDP% 
(prices of 2001) Growth of 
Sector 
(Price 2001) Contribution in Exports 
(%) Contribution of non-Traditional Exports 
(%) 
2006 9.02 8.50 11.24 13.81 
2007 9.15 8.73 15.28 16.04 
2008 9.36 9.90 23.84 32.25 
2009 9.54 8.00 17.74 15.00 
2010 9.61 7.90 26.14 25.87 
2011 9.70 7.8 19.43 22.88 
 
Source: Ministry of Finance, economic survey, 2011.  
65. The growth of the industrial sector was due to increased production of some manufactured 
products such as wheat flour of which its production increased from 434,160 tonnes in 2006 to 
445,227 tonnes in 2011, the production of iron, wh ich increased from 29,898,000 tonnes in 2006 and 
71.881 million tonnes in 2011, the production of ba tteries increased from 82 million batteries in 2006 
to 93 million batteries in 2010 and down to 89 milli on batteries in 2011, the production of spirits 
increased from 5.365 million litres in 2006 to 12,437, 000 in 2011, the combined production of alcohol 
increased from 11,559,000 litres in 2006 to 24,391,000 litres in 2011 where the production of beer 
increased from 2.99 million hectolitres in 2006 to hectolitres 3.23 in 2011. 
66. Moreover, production of cigarettes increased from 5095 billion cigarettes in 2006 
to 6,569 billion in 2011.  The increase was seen al so in the production of cement from 1,421,460 tons 
in 2006 to 2,408,765 tons in 2011.  In overall in 2011, the production in some industrial products 
increased due to increased demand for these products  in the domestic market as shown in Table 3 
below.  WT/TPR/G/271 Trade Policy Review 
Page 72 
  
  Table 3 
Production of selected Manufactured Products 
Types of Products Unit of Measure 2006 2007 2008 2009 2010 2011 
Wheat Flour Tons 434,160 406,336 287,925 368,885 444,242 445,227 
Spirits ‘000’ litres 5,365 5, 622 4,049 10,201 11,186 12,437 
Local Brew  ‘000’ litres 11,559 10,320 10,235 16,141  21,037 24,391 
Cigarettes Million 5, 095 5,821 6, 101 5,831 6, 181 6,569 
Cement ‘000’ litres 1,422 1, 630 1,756 1,941 23,120 24,087 
Iron Tons 44,482 52,163 39,969 34,793 33,384 34,881 
Tin Tons 29,898 36,492 31,743 50,664 71,276 71,881 
Batteries Million 82 75 53 78 93 89 
 
Source : National Bureau of Statistics and Ministry of Industry and Trade. 
020,00040,00060,00080,000100,000120,000
2006 2007 2008 2009 2010 2011Figure 2 
Growth trend of the jobs created in the manufacturing sector, 2006-11
Source:  Ministry of Finance, 2011.Number of jobs created
 
 
67. From 2006 to 2011, on average terms, the lead ing manufacturing industries in job creation 
are food processing (43,638 jobs), weaving and ta iloring (11,429 jobs), tobacco and cigarettes 
(6484 jobs), paper and printing (5,2 57 jobs) and beverages (5,022 jobs ), as shown in Figure 2 above.  
Moreover, in the EPZ areas alone, employed pers ons increased from 3,100 workers in 2006 to 
13,000 workers in 2011.  This has been attributed to the introduction of new projects including the private sector under the NDC and EPZ/SEZ. 
(iv) SME Sector 
68. SMEs constitute a cross cutting sector.  It i nvolves non-farm small scale economic activities 
like:  small mining and gemstone, fishing, hunting,  wholesale and retailing, restaurants and groceries, 
pharmacy and clinics, tools/spare parts making and vehicle repairing, beekeeping, food processing, 
handcrafts and garments making, communication facilitation, schools, entertainment, catering East African Community WT/TPR/G/271 
 Page 73 
 
 
 services, tour guiding, gardening and decoration, br icks and furniture making, leather turning and 
shoes making, transportation, consulta ncy and business advisory services.  
69. Latest existing data shows that there are a bout 3,000,0000 SMEs in Tanzania.  The sector 
employs around 5,145,000 people, whereby 88 per cent of them are employed in the informal 
business.  The SME sector contribution to GDP is ar ound 27 per cent.  It is estimated that 60 per cent 
of all SMEs in Tanzania are located in urban areas and 40 per cent in rural.  About 98 per cent of all SMEs are micro-enterprises, which are in the le vel of employing between 1 to 5 people.  About 
43 per cent of SMEs are owned by women.  Tanzan ia SME sector comprises a significant number of 
the informal activities especially under micro-enterp rises segment.  The informal enterprises are those 
operated without a long-term license.  They operate  in backyards and or close to their place of 
residence.  The informal businesses do not have Tax Identification Numbers and are not registered with BRELA.  The larger part of SMEs is found in service and trading subsectors.  The type of 
services include:  hair dressing, communication facilitation, entertainment, pharmacy and clinics, catering, gardening and decoration, transportation,  consultancy and business advisory services;  
vehicle repair, cleaning, schools and vocational training centres, restaurants, and guest houses.  On the 
other hand, trading involves buying and selling merc handise from larger producers or importers of 
finished products and even second-hand products.  About 66 per cent of SMEs have annual sales of 
below US$2,000.  About 54 per cent of the SMEs are aged three years and below. 
70. The SMEs of Tanzania to quickly adjusting to the changing business environment it requires 
clear coordination of the sector;  strong and enha nced institutional framewo rk and facilitation on 
accessibility to appropriate infrastructure/working s ites.  There is also a need for continuously 
articulating on development of entrepreneurial cultu re and business skills.  Likewise, accessibility to 
finance, market, information and improved technology  has to be facilitated.  In addition, the public 
and private institutions supporting the SMEs need to be capacitated.  This has to go concurrently with 
strengthening of associations of SMEs.  Moreover, there is still a need for articulating on adhering to 
cross cutting issues like environmental impact sensitivit y;  balancing of gender in industrialization and 
trade outreach;  as well as balancing of coverage rural/urban-wise 
(v) The National SME Development Policy  
71. In recognition of the importance of the SME s ector and need for meeting the needs of the 
sector regarding to provision of conducive business environment for SMEs, the National Small and 
Medium Enterprises Development Policy (2003) has b een formulated with the purpose of articulating 
on creation of enabling environment that would attr act start-ups of new SMEs as well as encouraging 
growth of existing ones.  The policy focuses on trad e facilitation in a way of simplifying the rules, 
procedures and regulations as well as improving provision of financial a nd non-financial business 
development services to SMEs.  This would in tu rn enable Tanzanian SMEs to easily access to 
information and market, SME financing systems, entrepreneurship and business development skills, 
as well as infrastructure and appropriate working pr emises and finally increase participation of SMEs 
to the economic activities.   
(vi) Energy and minerals  
72. The Ministry of Energy and Minerals prepared strategic plan for 2012-16 that stipulates 
strategic objectives and targets that will be implem ented including monitoring and evaluation in line 
with the outcome indicators to gauge the overall performance of the sector. WT/TPR/G/271 Trade Policy Review 
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  73. Priority will be accorded to increased acc ess to modern energy services by ensuring 
availability, reliability, quality, cost-effectiveness, efficiency and safety taking into consideration 
preservation of environment.  The plan encourage pr ivate sector participation in the development of 
energy sectors by utilizing available resources such as gas, biofuel, solar, geothermal and wind for 
energy security in Tanzania.  The plan also rec ognizes and prioritizes the provision of modern energy 
services to rural communities thus rural electrificati on will continue to be promoted, facilitated and 
supported through public priv ate partnership among others. 
74. In Tanzania electricity demand increases at the rate of 12 to 15 per cent while electricity 
generation increases at the rate of 6 per cent annually.  The current pow er generation stands 
at 1,270 MW.  The Government plans to generate 1788 MW by 2015.  
75. As regards to minerals, noting that Tanzan ia has abundant mineral resources including 
metallic metals, gemstones, industrial minerals, bu ilding materials and energy minerals, the Mining 
Act of 2010 provides for mineral processing, smelti ng and refining whereby the mineral holder is 
compelled to set aside minerals for processing smelting or refining.  It also provides for appeals for any person aggrieved by a decision of licensing authority. 
76. The Government in collaboration with the priv ate sector, will on sustainable basis develop 
and exploit these resources with the aim of contri buting to social economic development in the same 
vain the role of small scale mining and mineral va lue addition chain is emphasized due to its high 
potential to the economy, revenue collec tion employment and poverty reduction. 
77. In order to achieve these, Tanzania formulat ed Minerals Policy, 20 09 aimed at providing 
political guidance on the sector followed by the Mi ning Act 2010 and its regul ations both aiming at 
increasing minerals contribution to GDP and allevi ate poverty.  The Government is finalizing the 
review of the Explosives Act, 1963 with a view to formulating a mineral beneficing Act, envisaged to 
be completed during 2013-16. 
(vii) Natural Resources and Tourism 
78. The natural resources and tourism is the sector responsible for conserving, and managing the 
suitable use of natural resources (wildlife, forestry and antiquities sites), as well as develop tourism 
activities, and marketing of the destination attrac tions worldwide.  The sector contribution to the 
national economy kept on recording positive contri bution, such that in 2008/09 its contribution to 
GDP recorded at 17.5 per cent. 
(a) Tourism 
79. From 2006 to 2008 the tourism sector performan ce recorded positive growth in both the 
number of tourists, and receipts;  as well the sector  contribution to foreign exchange earnings and to 
GDP remains to be of great economic potential.  Per centage growth of number of  tourists arrivals for 
the period between 2006 and 2008 continues to sh ow positive performance, of which the growth 
recorded at 16.4 per cent, while percentage growth  of earnings for the same period was 26.3 per cent.  
That is, from 612,754 the number of visitors record ed in 2006 increased to 770,376 visitors in 2008, 
while earnings collected in 2006 increased from US$950 collected to US$1,288.7 in 2008.  In 2009, Tanzania's tourism industry was affected by the e ffects of the global recession on its major source 
markets, of which in a way slightly disturbed th e positive annual performance trend of the sector.  In 
comparison to 2008 records, both number of tourists and earnings to some extent record negative 
growth by approximately -7.27 per cent and -11 pe r cent respectively (see the Table 1a).  But the 
situation began to show positive recovery the followi ng year 2010, i.e. the number of tourists that East African Community WT/TPR/G/271 
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 visited Tanzania recorded at 782,699;  while th e average spending per tourist per day more than 
doubled, from US$155.1 in 2006 to US$328 in 2010, cont ributing to the increase in tourism earnings.  
In the year ending October 2011, travel receipts reached US$1.4 billion (as shown on both Tables 1a).  The United States, the United Kingdom, Germany, Italy, and Africa are the major tourist source 
markets for Tanzania. 
Table 1a 
International Visitor Arrivals and Receipts in Tanzania, 2006-11 
Year Number of Visitor Arrivals Annual Change (%) Receipts (US$ Mill) 
2006 644,124 5.12 950.00 
2007 719,031 11.62 1,198.76 
2008 770,376 7.14 1,288.70 
2009 714,367 -7.27 1,159.82 
2010 782,699 9.50 1,254.50 
2011 867994  1,359.43 
 
Source : Ministry of Natural Resources and Tourism, T ourism Division, Tourism St atistical Bulletin, 2011. 
(b) Wildlife 
80. In 2009, earnings from the wildlife subsector  increased by 22 per cent from the receipts 
recorded in 2008.  This situation was a result of  an increase in tourism activities such as photographic 
sceneries, wild animal hunting and licensing of tr ophy businesses.  However, during the same period 
2009/10 earnings from exports of trophies and hunted wild animals declined;  this was due to 
problems associated with the trophy business, such as; avian influenza disease, shortage of flights for 
transporting live birds and restrictions in some European countries. 
Table 1b 
Growth in Wildlife Tourism (Photographic and Sport Hunting) in Tanzania: 1995-2010. 
Year Total 
Tourists 
(000) Total Tourism 
Income  
(US$ mill) NP Entries 
(000) Foreign Tourist 
Hunting Tourist Hunting 
Observer Total Hunting 
Tourists Hunting 
Revenue  
(US$ Mill) 
2004/5 582 746 1032 1274 380 1654 9.7 
2005/6 613 823 1083 1440 241 1681 11.6 
2006/7 644 950 1150 1582 855 2437 12.0 
2007/8 770 1315   1508 1725 2208 14.7 
2008/9       1152 1454 2606 19.8 
2009/10       851 203 1054 18.4 
 Note Hunting tourists is not in 000.  NP visits repr esents number of entries, not number of visitors. 
 
Source : Ministry of Natural Resources and Tourism, W ildlife Sector annual St atistical Bu lletin, 2010. 
 WT/TPR/G/271 Trade Policy Review 
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  0510152025
02004006008001,0001,2001,4001,6001,800Foreign Tourist Hunting
Hunting Revenue (USD Mill)Figure 3
Growth in Tourist Hunting 1995-2010
Hunting tourists
Source:  Economic survey (2006),  MNRT Speech 2009.
Hunting revenue (USD mill)
 
 
(c) Forestry and beekeeping 
81. In 2009, receipts from the forestry and beekeep ing subsector increased by 35 per cent to 
TZS 21.98 billion from TZS 16.29 billion in 2008.  The increase was emanated from strengthening 
patrols in harvesting, transport and markets; dec line in timber imports from neighbouring countries;  
and increase in exports of forestry products. Howe ver, exports of forestry products declined from 
US$200,914.5 in 2008 to US$70,247.7 in 2009.  The decrease was caused by Government measures 
to restrict log exports, the world economic crisis and less competition of local forestry products in the 
world markets. 
VI. CONCLUSION 
82. Since the last Review, Tanzania has continued with its active involvement in the Multilateral 
Trading System especially the hosting of the LDCs  Trade Ministers meeting in October 2009 with a 
view to reviewing their position and to push forw ard the Doha negotiations because we believe that 
continued delays in successful concluding of the r ound amounts to irretrievable loss to many of our 
economies.  Furthermore, our commitment to free and fair trade is evidenced by the fact that the 
Government maintained an open and liberalized trad e policy and did not resort to any protectionist 
trade measures despite the global financial crisis and severe drought that hit the Nation in 2008 causing a food shortage.  Tanzania continued to  fulfil its obligations under the various WTO 
agreements to the extent possible.  We take th is opportunity to sincerely express our gratitude and 
appreciation for assistance provided to us by the in ternational agencies and the development partners 
83. In future, Tanzania's trade policy will continue  to focus on integrating the economy into the 
world economy so as to reap the benefits arising from globalization and liberalization. 
 East African Community WT/TPR/G/271 
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 REPORT BY UGANDA 
 
I. INTRODUCTION 
1. In 2010, Uganda replaced its medium-term pl anning Frame work of Poverty Eradication 
Action Plan (PEAP) with the National Development Plan.  The Plan (NDP) 2010 guides policy 
formulation and implementation for all sectors and as such stipulates the country's medium-term strategic direction, development priorities and impl ementation strategies.  The theme of the NDP is 
"Growth, Employment and Social Economic Transformation for Prosperity."  The thrust is to accelerate social economic transformation to achieve the National Vision of a transformed Ugandan 
society from a peasant to a modern and prosperous country within 30 years. 
2. Since the last Trade Policy Review, Uganda h as continued to implement trade liberalization 
policy guided by a number of policies including inter alia  the National Standards and Quality Policy, 
the National Industry Policy and the National Trade Policy (NTP) of 2008 with the main objective to 
eradicate poverty and ensuring prosperity for al l Ugandans.  The National Trade Policy charges 
Government with the primary role of elimina ting barriers to trade and providing an enabling 
environment in which the private sector can thrive , and build capacity to produce quality goods and 
services competitively, reliably, and on a sustainabl e basis. Within this fra mework, the Government 
provides an enabling environment for the private sector to play the lead role as an engine of economic 
growth.  
3. Over the years, Uganda registered impressive  growth rates especially during the PEAP period 
when the average rate of growth in GDP in creased to 7.2 per annum between 1997/98 and 2000/01. 
The growth rate slowed down from 8 per cent per annum in 2007/08 to 6.7 per cent in 2010/11 
and 3.2 per cent in 2011/12.  This may be attributed to the international financial crisis that led to high 
global oil and commodity prices including weak external demand affecting Uganda’s exports. 
4. The Government has continued to embrace the po licy of liberalisation which started in the 
1990s.  There has been a slowdown in economic pe rformance from 2010/11 and 2011/12, affecting all 
sectors of the economy especially the manufacturing and services sectors.  The Government has 
embarked on various reforms including tightening fiscal policies to address challenges like high 
inflation. 
5. Uganda has continued to maintain a multifaceted  approach in poverty reduction and ensuring 
prosperity for all, including using trade as a tool for wealth creation and income distribution. These 
efforts have led to significant reduction in poverty levels from 56.4 per cent in 1992/3 to 31.1 per cent 
in 2005/06. This continues to improve as the proportion of the poor population in Uganda reduced to 24.5 per cent in 2009/10. 
6. Uganda remains fully committed to the attainme nt of the Millennium Development Goals, in 
particular the poverty reduction target of 10 per cent of the population by 2017.   
II. ECONOMIC OUTLOOK 
(1) G
ROSS DOMESTIC PRODUCT  
7. The central objective of Uganda's macroeconomic  policy has not changed since the last Trade 
Policy Review in 2006.  Uganda continues to pur sue a policy of export-led growth coupled with 
prudent macroeconomic policy management and stru ctural transformation of the economy.  Whereas 
Uganda's GDP showed positive growth from 2007/ 09, it declined to 6.7 per cent in 2010 WT/TPR/G/271 Trade Policy Review 
Page 78 
  
  and 3.2 per cent in 2011. This decline in performan ce is a result of the global economic crisis which 
led to high global oil and commodity prices includi ng weak external demand affecting Uganda’s 
exports. 
8. The lead sectors contributing to GDP in 2007/08 were services at 46.9 per cent followed by 
industry at 25.8 per cent and agriculture, forestry  and fishing at 21.4 per cent. There has been 
insignificant change since then and in 2011/12, servi ces reduced slightly to 45.1 per cent, industry 
increased to 26.3 per cent and agriculture increased to 23.7 per cent. 
9. Since the last Trade Policy Review (TPR), Ug anda's inflation has generally remained in 
single digits but rose in October 2011 to 30.5 per ce nt mainly due to drought conditions experienced 
in most parts of the country.  Since then, inflati on has declined steadily, in May 2012 it declined to 
18.6 per cent and 14.6 per cent by July 2012.  The Government took measures to address the rising 
inflation through tightening of the monetary and fiscal  policy that included raising interest rates.  
Uganda operates a liberal exchange rate regime wi th interventions primarily to dampen short-term 
volatility in exchange rates.  
(2) INVESTMENT AND SAVINGS  
10. Since the last TPR, Uganda has continued to be a major investment destination from different 
countries. According to statistics from the Uganda I nvestment Authority, Ugan da's net foreign direct 
inflows were US$792.3 million, US$728.9 million, US$841.6 million, US$543.9 million and US$797 million in 2007, 2008, 2009, 2010 and 2011 respectively. 
11. The slight decline in investment inflows in  2010 and 2011 can be attributed to a number of 
factors including the international financial crisis, economic slowdown and volatility in the 
commodity markets;  the shocks had an adver se effect on exchange rate and caused inflation 
pressures.  Capital intensive sectors such as manufact uring were particularly hard hit, recording 
a 90 per cent fall in planned investment over the same  period.  However, the Government has restored 
the macroeconomic stability, through tightening both monetary and fiscal policies which has led to a 
rapid improvement in business confidence.  The nega tive growth effects are likely to be temporary 
since the Government is committed to maintaining macroeconomic stability. 
12. Uganda's long-term grow th prospects are promising due to  increased investment opportunities 
and the prospects in the oil sector which is expected to attract significant foreign investment.  In order 
to attract increased investment, Uganda provides a number of incentives to foreign and domestic investors.  The range of investment incentives avai lable is detailed in the Investment Code 1992 and 
administered under the Finance Act of 1998.  In a ddition, the aggregate returns to investment in 
Uganda are higher than in neighbouring Kenya and Tanzania making Uganda an  attractive investment 
destination in East Africa. 
13. In order to develop and attract investment , Uganda provides a number of incentives to 
businesses, including tax exemptions and holidays; tax rebates, deductions and capital allowances. 
The major incentive programmes are a Duty Drawback Scheme and a Manufacturing under Bond 
Scheme.  Uganda Investment Authority (UIA), an agency created to facilitate and promote 
investments in the country, has opened up industrial pa rks in several regions in the country in a bid to 
promote value addition and industrialization in the country.  Uganda Investment Code 1991 
encourages investors to use locally sourced material s; invest in rural areas and UIA provides a myriad 
of specific investment incentives to businesses complimented by the Finance Act 1998 that provides 
for various allowances on investment capital.   East African Community WT/TPR/G/271 
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 14. Licensed investors can enjoy a deferred VAT payment facility on plant and machinery;  
seedlings;  greenhouses equipment; plastic sleeves an d tea crones that are granted on consignment by 
consignment. VAT exemption is also extended to  producers of agro-products and un- processed food 
and some services in areas of education, medical,  financial and social welfare.  The Competitive 
Investment Climate Strategy (CICS) and Enterpri se Development Uganda in Ministry Finance are 
programmes aiming at supporting investment in productive sectors and enterprise development. 
15. There have been efforts to provide Deve lopment Finance by the Central Bank but the 
programme has been incapacitated by the co llateral requirements by Commercial Banks.  
(3) EMPLOYMENT  
16. The total labour force in Uganda increased from 10.8 million persons in 2005/06 
to 13.4 million persons in 2009/10.  This represented an increase of 23 per cent.  In terms of industry 
or sector employment, agriculture was the highest  employer with 66 per cent of the working 
population.  In terms of employment by status acco rding to UBOS, 79 per cent were self-employed 
in 2009/10.  Employment in the civil service in creased from 263,854 in 2010 to 275,149 persons 
in 2011.  Youth employment in Uganda is a gr owing challenge. Reforms ar e being undertaken to 
make the education system more supportive of innova tion, entrepreneurship and job creation in order 
to increase employment opportunities especially for the youth.  
(4) PUBLIC REVENUE  
17. The revenue collection by Ug anda Revenue Authority (URA ) has been growing considerably 
since the last TPR due to improved tax administ ration. There are prospects for expanding, and 
facilitating tax administration to reach the inform al sector to increase the tax base for increased 
revenue collection.  In addition, the Government  is committed to improving service delivery which is 
expected to increase compliance. 
18. Uganda is expected to receive revenues accruing from oil and gas transactions in the form of 
capital gains tax as well as stamp duty.  The proceed s will form part of the resources earmarked for 
financing the construction of Karuma power project to improve the energy sector and the proposed oil 
refinery. 
III. SECTORAL PERFORMANCE  
(1) AGRICULTURE  
19. Agriculture contributed 21.4 per cent of the total GDP in 2007/08 but increased slightly 
to 23.7 per cent in 2011/12.  The improvement in performance in 2011/12 was a result of the 
rebounding of the cash crop subsector which increased  by 16.2 per cent compared to 9 per cent 
in 2007/08.  These include coffee, cotton, tea, co coa, tobacco, sugarcane a nd exported horticulture 
and cut flowers.  There was an increase of coff ee and cotton production driven by a bumper harvest 
and favourable global prices which benefitte d many small holders producing the crops. 
20. Agriculture in Uganda is still highly subsiste nt and rural based.  Agricultural products are 
normally for home consumption but only sold when there is surplus.  This partly explains why 
agriculture continues to employ the highest numbe r of Ugandans despite its declining contribution 
to GDP.  Much of Uganda's agricultural products are exported as raw materials and their contribution 
to GDP is dependent on volatility of pri ce changes in the international market. WT/TPR/G/271 Trade Policy Review 
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  21. Food crops account for over half of the agricultural sector.  However the growth of this sector 
has continued to decrease over the four years from 2.4 per cent in 2007/08 to 0.7 per cent in 2010/11 
and 1 per cent in 2011/12. The sector has particularly  been affected by a number of challenges that 
include; heavy reliance on the weather, diseases and absence of irrigation infrastructures, among 
others.  The Government has put in place a program  under the Agriculture Development and Strategic 
Plan to improve investment this sector. 
(2) SERVICES  
22. The services sector has helped to drive Uganda's  recent economic growth.  The contribution 
of services sector to GDP is growing and accounted  for about 45.1 per cent of GDP in 2011/12.  
In particular transport and communications, wholesal e and retail trade, and financial services account 
for a growing percentage of economic activity.  Howe ver, the growth in this sector also slowed down 
from 9.7 per cent in 2007/08 to 3.1 per cent in  2011/12.  Hotels and restaurants sector grew 
by 20.6 per cent in 2011/12 compared to 10.7 per cent in 2007/08. 
23. The tourism subsector has been a major contri butor towards the growth of the services sector. 
Tourism earnings amounted to 375 million in  2006, US$590 million in 2008 and US$800 million 
in 2011, According to the World Bank Rapid Asse ssment Study.  The number of tourist arrival in 
Uganda has been increasi ng since 2006. According to the Minist ry of Internal Affairs, Uganda 
recorded a 16.4 per cent increase in tourist arrival. 
Tourist arrival in Uganda since 2006  
(Figures in '000) 
Period Arrival 
2006 770 
2007 883 
2008 1,163 
2009 1,095 
2010 1,223 
Source:  Ministry of Internal Affairs a nd Uganda Bureau of Statistics.  
24. The posts and telecommunication sector maintained an impressive growth from 22.6 per cent 
in 2007/08 to 23.7 in 2009/10, but declined in 2011/12 to 15 per cent.  This growth is mainly 
attributed to strong performance in cellular sub scriptions.  Financial services including commercial 
banks, insurance, and foreign exchange bureau  activities experienced a dramatic decline 
from 29.5 per cent in 2009/10 to -11.8 per cent in 2011/12.  Real estate has been growing by 5 per cent from 2007/08 to 2011/12. 
25. The Government realizes the importance of ser vices in the growth of the economy and is 
developing various regula tions and laws to facilitate liberalizat ion while ensuring that this is done 
orderly.  The Government is also committed to im proving professional bodies to enable the private 
sector to regulate itself. 
(3) M
ANUFACTURING  
26. One quarter of the manufacturing sector is classified as informal.  This component is less 
capital intensive and has lower energy costs and h as over the years performed better than the formal 
manufacturing sector.  The share of the sector decl ined from 8.6 per cent in 2010/11 to 8.4 per cent 
in 2011/12.  The sector contracted from 8.8 per cent in 2007/8 to 6.5 per cent in 2009/10 East African Community WT/TPR/G/271 
 Page 81 
 
 
 and 1.1 per cent in 2011/12.  The Government has embarked on investments in the energy sector to 
help offset expenses manufacturers pay for energy. 
27. Exports of manufactured goods are mainly d estined to COMESA c ountries especially the 
Democratic Republic of Congo and Southern Sudan,  Rwanda and Burundi.  Uganda’s proximity to 
these markets and the continuing demand for consumer  goods in these markets is expected contribute 
to the recovery of this sector. 
28. The Government has also put in place the Na tional Industrial policy, and sector specific 
policies such as the National Textiles Policy, th e Leather Policy, in an effort to promote 
industrialization of the country. 
IV. UGANDA'S TRADE POLICY 
29. Since the last Trade Policy Review 2006, Uganda  has continued to maintain a liberalized 
trade regime as provided for in earlier policies a nd the National Trade Policy developed in 2008.  
The primary vision the policy is "To transform Ug anda into a dynamic and competitive economy in 
which the trade sector stimulates the productive sectors; and to trade the country out of poverty, into 
wealth and prosperity".  The overall goal of the Policy is "to develop and nurture private sector 
competitiveness, and to support the productive sectors of the economy to trade at both domestic and 
international levels, with the ultimate objective of  creating wealth, employment, enhancing social 
welfare and transforming Uganda from a poor peasant so ciety into a modern and prosperous society".  
The National Trade Policy is implemented along with  the EAC Customs Union Protocol of 2004 and 
it annexes.  The EAC moved to a higher level of  integration on 1 July 2010 when it became a 
Common market. 
30. In the context of implementing the national Tr ade Policy, the Government has put in place 
other complementary policies and laws such as  National Standards, Quality Assurance and 
Accreditation Policy, the National Industry Polic y, Anti-counterfeiting Goods Bill, the National 
Cooperatives Policy. 
31. A draft National SPS Policy has been developed and will soon be presented to Cabinet for 
approval.  These measures aim at improving comp etitiveness of Uganda's products in the domestic 
and external markets.  Uganda has also made effo rts to update its intell ectual property laws which 
include the Trademarks Act 2010, the Copyright and Neighbouring Rights Act No. 19 of 2006 and the 
Trade Secrets Protection Act 2009.  Other commercial la ws are being reviewed with a view of making 
them more effective. 
V. DIRECTION OF TRADE 
32. Despite increases in exports earnings since 2007, the country has continued to experience an 
unfavourable trade balance.  The trade deficit mo re than doubled from US$1,685.3 million in 2007 to 
US$3,169.9 million in 2011.  This was attributed in crease in imports and slower pace of exports than 
could not off-set the imports expe nditure bill. For example during 2011 , the exports revenue increased 
by 17.1 per cent compared to the imports bill of 20.2 per cent.  
(1) EXPORTS  
33. Uganda’s exports increased from US$1,337 million in 2007 to US$ 2,159 million in 2011. 
The share of the value traditional exports h as increase slightly from 29.9 per cent in 2007 
to 31.4 per cent, while non-traditional exports  have reduced from 70.1 per cent in 2007 WT/TPR/G/271 Trade Policy Review 
Page 82 
  
  to 68.6 per cent. The Common Market for Eastern and Southern Africa (COMESA) and the European 
Union (EU) regional blocs remained the major des tinations for Uganda’s e xports. Overall, COMESA 
took the largest market share of 59 per cent in 2010 compared to 61.3 in 2009. South Sudan remains the main destination for Uganda’s ex ports among the COMESA member states. 
(2) I
MPORTS  
34. Since the last TPR, the import bill has in creased from US$ 3,552.6 million to US$ 5,684.8 
in 2011. The Asian Continent remains the leadi ng source of Uganda's imports especially heavy 
machinery for construction and i ndustrial development, textiles a nd clothing and household products. 
Its import share was 34.2 per cent, 37.1 per cent, 41.8 per cent in 2008, 2009, and 2010 respectively. 
The African continent ranked second with an im port bill that increased from US$957.8 million to 
US$992.9 million in 2009 and 2010 respectively. The main trading partners included Kenya with a 
market share of 11.6 per cent, South Africa 5.5 per cent and Tanzania at 1.3 per cent. 
VI. TRADE POLICIES BY SECTOR 
(1) SERVICES  
35. Services have emerged as an important sect or of the economy: ICT/telecommunications, 
financial, transport, energy, education, tour ism, health, distribution (wholesale and retail), 
construction and business services and contribute to  around 50 per cent of the GDP and has become a 
dynamic and fast growing sector of Uganda's economy.  Tourism, telecommunications, financial services and transport have all experienced considerable  growth over the past six years. A number of 
significant reforms have been made in teleco mmunications services over this period with the 
establishment of the Ministry of Information and Communication Technology (ICT) in 2008. 
(2) A
GRICULTURE  
36. The main subsectors under agriculture include: co ffee; cotton; tea; floriculture; apiculture; 
horticulture; tobacco, cocoa, vanilla cereals and le gumes.  Other sectors that fall under agriculture 
classification include forestry and fishing (aquaculture ) that are guided by the forestry and fisheries 
policies respectively. 
37. Agriculture provides the livelihood for a majority  of Ugandans, particularly women, and has 
long been of fundamental importa nce to Uganda's economy in term s of its contribution to GDP, 
export revenue and employment.  Over th e period 2006-2010, the agriculture sector 
averaged 1.2 per cent annual growth, compared to 7.8 per cent for industry and 8.3 per cent for services.  This is well below the annual growth targ et of 5.6 per cent laid down under the National 
Development Plan and the 5.9 per cent growth rate that is require d for effective poverty reduction.  
Given the importance of employment in this sector, particularly of the rural population, and Uganda's 
high population growth, dec lining performance in the agriculture sector has implications for poverty 
reduction and economic growth.  
38. The Ministry of Agriculture, Animal Industry and Fisheries (MAAIF) is responsible for the 
formulation and implementation of agriculture policy.   
(3) M
INING AND ENERGY  
39. Under the Constitution, ownership and control of a ll minerals, oil and natural gas is vested in 
the Government. In order to stimulate investment s in this sector, the Government put in place a East African Community WT/TPR/G/271 
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 Mineral Policy in 2001,  the Mining Act 2003,  Ener gy Policy and Rural Electrification Strategy. The 
policies promote private sector participation in mineral development, aims  at strengthening local 
capacity and improving artisan and small-scale mining. The Department of Geological Surveys and Mines under the Ministry of Energy and Mineral Development is responsible for regulatory and 
licensing issues.  
(4) M
ANUFACTURING INDUSTRY  
40. Most manufacturing in Uganda is centred around the processing of agricultural commodities, 
such as food processing, textiles, beverages and t obacco.  Food processing, drinks and tobacco and 
paper products and printing have all registered strong growth in the period 2006-10.Manufactured 
exports include metal products, tobacco, paper pro ducts, soap, vegetable oil, confectionery, beer, 
cement, garments, nets and twines, and plastics.   Key manufactured imports include petroleum 
products, road vehicles, iron and steel and pharmaceuticals.  
41. The Ministry of Trade, Industry and Cooperatives (MTIC) is responsible for formulating 
policies that guide this sector. Accordingly, th e manufacturing industry sector is guided by the 
National Industrial Policy of 2008. This policy sets out the strategic direction for industrial 
development in Uganda for the next ten years.  The vision of the policy is to build the industrial sector 
into a modern, competitive and dynamic sector fully integrated into the domestic, regional and global 
economies. Though the industry sector is growing at a fast rate, the impact of the current energy crisis has greatly affected the sector. The opening of the Bujagali dam will increase the availability of 
energy to the industrial sector. 
VII. UGANDA'S EXTERNAL TRADE RELATIONS 
42. Uganda's external trade relations are guided by  four broad frameworks; regional, bilateral, 
unilateral and multilateral trade frame works. 
(1) R
EGIONAL TRADE RELATIONS  
43. At the Regional level, Uganda is a member of the East African Community. The East African 
Community comprises five Partner States; Uganda, Kenya, Tanzania, Rwanda and Burundi. The five 
Partner States integrated into the EAC Common Mark et on 1 July 2010. Uganda is also a member of 
the Common Market for Eastern and Southern A frica (COMESA). Uganda is currently engaged in 
ESA-EAC-SADC Tripartite Trade negations.   This is being done in an effort to eliminate the 
challenges of overlapping membership in different regional groupings in addition to other strategic 
and economic objectives. 
(2) BILATERAL TRADE RELATIONS  
44. Bilaterally, Uganda has several trade initiatives with a number of countries around the world. 
Uganda has strategically developed trade initiatives with South Africa in the area of trade and 
investment cooperation. It also has a trade initiati ve with Rwanda in the areas of cooperatives 
development, small and medium enterprise de velopment and has established a mechanism for 
non-tariff barriers (NTBs) identification, monitori ng and elimination. Other trade initiatives and 
understanding have been developed with Kenya, South Sudan, China, India and Turkey among others. WT/TPR/G/271 Trade Policy Review 
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  (3) UNILATERAL TRADE RELATIONS  
45. Unilaterally, Uganda is a beneficiary of  Everything But Arms (EBA) with the 
European Union (EU), Generalized System of pr eference (GSP), Duty Free Quota Free (DFQF) 
scheme by developed members such as India, the United States African Growth and Opportunity Act 
(AGOA). However, these initiatives are yet to pr ovide the benefits expected by Uganda.  
(4) MULTILATERAL TRADE RELATIONS -WTO 
46. Uganda is a founder member of the WTO and continues to be active in the DDA 
negotiations. Uganda is concerned over the current impasse in the (DDA) negotiations, which has 
undermined the legitimate aspirations of the least de veloped countries (LDCs) for a fair and equitable 
outcome in their favor from the conclusion of the Round. 
47. Uganda supports the placing of development at th e heart of the trade negotiations in order to 
help developing and LDCs to be in tegrated into the multilateral tradi ng system to take advantage of 
the opportunities the system offers. Under the DD A, Uganda belongs to the following negotiating 
groups, the LCD Group, the African Group, the G20, G70+China and the ACP Group. 
48. Uganda's main interests in the deliverables of the DDA include: granting of duty-free and 
quota-free market access by developed and emerging countries to products of interest to Uganda; 
operationalization of Aid for Trade; simplified and tr ansparent preferential rules of origin; elimination 
of non-tariff barriers; an agreement on cotton to  achieve an ambitious, expeditious and specific 
outcome for cotton trade related aspects, in partic ular the elimination of domestic support measures 
and export subsidies and a lasting solution to tari ff escalation and other market access issues.  Uganda 
has also called for additional financial and technical  assistance to meet the implementation obligations 
and build capacity to meet sanitary and phytosan itary and technical requirements and related 
infrastructure.   Uganda would like members to operationalize the services waiver, including through 
granting preferences in areas of interest to LDCs, pa rticularly with regard to the movement of service 
providers under Mode 4. 
49. Uganda is one of the countries that submitte d a priority needs assessment for technical and 
financial cooperation under the Decision of Nove mber 2005 to extend the transitional period under 
Article 66.1 of the TRIPS Agreement in favour of LD C members. In this context, developed countries 
should extend technical and capacity building as  promised, to enable LDCs develop their 
IP infrastructures.  
50. WTO Members should also set up a mechanism to ensure the full operationalization and 
monitoring of Article 66.2 of the TRIPS Agreemen t obligations with a view to enabling the LDC 
members to create a sound and viable technological base. 
51. Uganda calls for constructive engagement that will lead to a speedy conclusion of the DDA 
and urges members to work towa rds a successful end of the DDA. 
VIII.  CONCLUSION 
52. Generally there are a number of national sectoral policies complimenting the National Trade 
Policy guiding the development of Uganda’s Economy and social transformation to which trade is an 
important contributor. In this re gard Uganda is aiming at making trade dynamic especially in the East African Community WT/TPR/G/271 
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 context of regional integration, multilateral trad ing system and global economic governance, all of 
which drive globalization with its challenges and opportunities.  
53. At national level, trade has been mainstreamed  into the National Development Plan and the 
National Trade Policy and NTSDP provides a strong b asis for this.  In addition intersectoral and 
intrasectoral synergies key for successful trade devel opment as all sectors have a role to play in 
economic development.  The Government remains committed to spearheading implementation of the 
National Trade Policy in its entirety while complime nted by other trade related sectoral specific 
policies. 
54. Uganda appreciates the importance of the WT O in the regulating the multilateral trading 
system and its transparency process.  
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