Non-tariff barriers (NTBs), a complex web of regulatory and procedural stumbling blocks, are mounting considerable challenges for businesses within East Africa. These barriers, stretching beyond conventional tariff measures, are stifling the free movement of goods and services, consequently escalating operational costs and hampering trade in the region. NTBs: Obstructing Aspirations of Regional Integration These hindrances are emerging as a formidable threat to the hopes of regional integration among East African nations. The pursuit of a unified market, with its promise of fostering economic growth and competitiveness, is being thwarted by NTBs. The business environment is complicated by these barriers, which discourage cross-border trade and deter potential investors. Impact on Economic Development The elimination or significant reduction of these barriers is viewed as crucial in realizing the envisioned level of integration. Such a level is expected to stimulate investments, bolster intra-regional trade, and spur economic development in East Africa. However, the persisting presence of NTBs poses a significant challenge to this ambitious blueprint. Climate Reality and Economic Disruption In parallel, the Middle East and Central Asia are grappling with a grim climate reality. The regions are witnessing temperatures rising at double the global average, along with increasingly unpredictable and scarce rainfall. These adverse climate conditions are poised to exacerbate existing conflicts and disproportionately affect fragile states. The economic disruption that ensues is set to intensify. Despite the challenging climate situation, many countries within these regions are initiating measures to mitigate the impacts of climate change. Nevertheless, the need for more ambitious...

Leaders and experts from various sectors and regions shared their insights and experiences about the role of transport infrastructure in transforming the continent at the Africa Investment Forum (AIF), an annual business gathering that aims to raise funding for infrastructure and other projects in Africa. Participants gave examples of how transport infrastructure, such as roads, railways, ports and airports, can foster trade, integration, and growth in Africa. They generally agreed that Africa still has a huge infrastructure gap that hinders its development, stressing the need to increase infrastructure financing through innovative solutions such as those promoted at the AIF. Participants heard that African countries have a dual challenge in developing their transport infrastructure: they must ensure efficient, safe, and affordable mobility for all, while reducing the environmental impact of that infrastructure. This is a complex and urgent challenge that requires innovative ways of managing risks and attracting capital, particularly from the more risk-averse private sector. Dr. Akinwumi Adesina, President of the African Development Bank (AfDB), noted that AIF brings together world-class financiers that have the ability to use innovative financing instruments and mechanisms – such as pooled financing facilities, blended finance, and guarantees – to lower risks and increase returns. He called for significant investments to build better roads, bridges and ports, noting that the AfDB was leading the way in championing big ticket investments in transport infrastructure across the continent. “As of 2022, the African Development Bank had financed 25 transport corridors, constructed over 18,000 kilometres of roads, 27...

The 16 members of the Southern African Development Community (SADC) are exploring ways to further integrate their diverse economies and strengthen regional value chains. With a combined population of nearly 270 million people and $700 billion in GDP, the SADC bloc represents enormous potential for increased growth and development if member states can enhance economic cooperation and trade. By removing barriers to cross-border commerce, SADC aims to give regional firms access to wider markets, promote competition, facilitate investment flows, and develop joint manufacturing capacities. The current landscape is fragmented, with intra-SADC exports accounting for only 22% of total trade as of 2020. Deeper integration promises to unlock new industrial growth poles while expanding opportunities for resource-linked and agricultural exports within the bloc. Key initiatives aim to reduce tariffs and streamline cross-border trading procedures. The SADC Free Trade Area, enacted in 2008, eliminated tariffs on 85% of goods traded within the bloc. Further progress on the remaining 15% of sensitive items and reducing non-tariff barriers will help companies benefit from regional market access. The Regional Indicative Strategic Development Plan 2020-30 targets lifting intra-regional trade to 40% of total trade by 2030. Harmonizing regulatory standards and product requirements across SADC members can also make trading simpler for regional firms. Streamlining cumbersome border procedures, documentation and customs clearance processes through digitalization and one-stop border posts can bring down transaction costs. Ambitious proposals like the SADC Customs Union aim to eliminate duties on imports from outside the region. A unified approach to external tariffs...

Within the framework of the working European Union group spear-headed by Germany, United Kingdom and The Netherlands, a number of African countries have been listed to receive considerable investment support and further engage in forward-looking projects under the EU flagship titled the G20 Compact with Africa. The G20 Compact with Africa conference, which aims to help bolster private investment in the world’s poorest, but fast-growing continent, was held November 20 in Berlin, Germany. The conference underscored a strong renewal of business interest in Africa. It further portrays efforts by the European Union members in strengthening economic relations with the continent, especially Africa’s potential for renewable energy. As widely known, Europe and the United States are jostling with Russia and China for geopolitical influence, critical minerals and new economic opportunities in the world’s second most populous continent. In practical terms, Africa wants the European Union to remain as its partner for mutually beneficial cooperation and play a constructive multifaceted role in promoting the positive development of Africa-EU relations. G20 Compact with Africa Conference hosted by the Federal Chancellor of Germany with preceding “G20 Investment Summit – German Business and CwA Countries.” According to documents, the member countries of the G20 Compact are Morocco, Tunisia, Egypt, Senegal, Guinea, Ivory Coast, Ghana, Togo, Benin, Burkina Faso, Rwanda, Democratic Republic of Congo and Ethiopia. Reports said German Chancellor Olaf Scholz, who has visited Africa several times since taking office in late 2021, held bilateral talks with several African countries before finally hosting a German-African...

The African Continental Free Trade Area (AfCFTA) represents a historic opportunity to boost intra-regional commerce, reduce poverty, and spur Africa’s economic transformation. The World Bank estimates that AfCFTA could lift over 50 million people out of extreme poverty and raise incomes by nine per cent once fully implemented. However, realising these gains will require expanding access to financing and investment to energise trade and engage all Africans in the AfCFTA’s success. To achieve this, it is imperative to recognise that countries do not trade; people do. Therefore, there exists an urgent need to create viable avenues for trade financing that can empower individuals, entrepreneurs and businesses across the continent. The AfCFTA represents a historic opportunity to foster economic integration and create a single market for goods and services across Africa. However, the success of this ambitious initiative relies on the active participation of a multitude of actors, from small and medium enterprises to established businesses, and from rural farmers to urban entrepreneurs. Recognising that these diverse players are the true agents of trade, it becomes evident that facilitating their involvement requires a targeted approach to address the financial barriers they face. Bridging the trade finance gap A persistent challenge for African traders is limited access to the affordable financing needed for cross-border transactions and supply chain operations. The trade finance gap for Africa is estimated at over $100 billion annually. Boosting financing from both public and private sources is imperative to enable businesses of all sizes to engage in the...

The Governments of Zambia and DRC has signed a bilateral agreement to implement and operationalise the Chalwe-Kabila One Stop Border post (OSBP)  The post is under development by GED Africa, an investment and project management company, and is part of the Kasomeno-Mwenda Toll Road Project (KMTR). The wider infrastructure project, sponsored by The Duna Group, consists of the modernisation, construction and expansion of 184 km of road highway, the construction of a 345 m cable-stayed bridge over the border at the Luapala River; construction of a one-stop border post with accompanying warehousing and parking facilities; delivery of a tolling system and associated infrastructure; and social infrastructure. The OSBP agreement was signed by the DRC’s minister of infrastructure and public works, Alexis Gizaro Muvuni and Zambia’s minister of commerce, trade and industry, Chipoka Mulenga.  At the ceremony, Mulenga commented, “We are here today as a demonstration of this Government’s determination to use commerce and trade to stimulate economic growth for improved livelihoods for all our people.” With this now in place, the joint steering committees are able to turn their attentions to developing the operations manual, complete with detailed policies and procedures for implementation. When finally delivered, the post will bring expeditious and standardised border controls that will reduce trade stops, transport costs and transit times. Klaus Findt, CEO of GED Africa, remarked, “In tandem with the monumental bilateral agreement, the successful finalisation of both the Zambian and DRC Private Policing Services Agreements underscores our dedication to upholding traffic laws and ensuring safety and security along...

Determined to boost trade in the continent, the African Shipowners Association has concluded plans to establish African Shipping Lines in the first quarter of 2024. The Secretary General of the African Shipowners Association, Funmi Folorunsho, disclosed this at the just-concluded 43rd Annual Council meeting of the Port Management Association of West and Central Africa in Lagos. Folorunsho said that the move would enhance maritime transportation and boost intra-African trade. She said the strategic initiative aligned with the African Continental Free Trade Area Agreement’s objectives of fostering economic growth and logistical efficiency throughout the continent. Folorunsho outlined the comprehensive blueprint for the Africa Shipping Line, emphasising the need for a robust fleet. The African Shipowners scribe revealed the targets, which included a 188 per cent increase in bulk vessels, and a planned 180 per cent surge in container vessels. “This expansion aims to accommodate the anticipated surge in maritime transport volume, projected to soar from nearly 58 million to 131.5 million tonnes,” she said. Speaking on the mechanism for financing the project, she said it included tapping into funds generated through the AfCFTA African Cargo for Africa Ships programme. According to Folorunsho, this includes engaging the private sector, collaborating with the African Export-Import Bank, and exploring partnerships with existing shipping lines in Africa. She further underscored the broader impact of the proposed Africa Shipping Line on economic and logistical fronts. She noted that in 2019, 65 seaports were connected by 142 links, accounting for 22.1 per cent of intra-Africa freight transport...

Africa’s significant road infrastructure deficit creates increased production and transaction costs that must be addressed to scale opportunities envisaged under the Africa Continental Free Trade Area, a new report has found. The report, called Cross-Border Road Corridors Expanding Market Access in Africa and Nurturing Continental Integration notes that while roads are the primary mode of transport, carrying 80 percent of goods and 90 percent of passenger traffic, only 43 percent of Africa’s main population have access to an all-season road. “Just 53 percent of roads on the continent are paved, isolating people from access to basic services, including healthcare, education, trade hubs and economic opportunities,” according to the publication, released at a special session of the Africa Investment Forum 2023 Market Days taking place in Marrakech, Morocco. The session, titled Regional Corridors: Quest to Integrate Africa, featured a panel discussion on the strategic importance of regional corridors in connecting Africa. Panelists included government representatives, regional economic communities, development partners and private sector service providers. Opening the session, African Development Bank President, Dr Akinwumi A. Adesina urged collaborative efforts to fast-track the integration of African economies, lower transport costs, connect landlocked countries to coastal countries, and improve regional trade and competitiveness. “That is the Africa we want: a fully interconnected Africa, using regional corridor infrastructure and innovative regional financing instruments, to unleash economic opportunities and assure competitiveness of national and regional value chains. A well-connected Africa will be a more competitive Africa.” He intimated that the Africa Investment Forum will dedicate...

What you need to know: Statistics show that total intra-EAC trade grew by approximately 11.2 percent to $10.9 billion in 2022 from $9.8 billion in the previous year. Arusha. Exports from the East African Community (EAC) bloc to the rest of Africa hit a record $8.9 billion last year having increased from $8 billion in 2021. However, the share of intra-EAC trade as part of the region’s total trade globally remained stagnant at approximately 15 percent in both 2022 and 2021. Statistics show that total intra-EAC trade grew by approximately 11.2 percent to $10.9 billion in 2022 from $9.8 billion in the previous year. This emerged as the East African Business Council (EABC) met business stakeholders in Burundi early this week to discuss how to promote regional trade. The workshop in Bujumbura was also aimed to further boost Burundi’s exports to Africa, which according to the EABC, stood at about $68.1 million last year. “The good news is that the EAC goods exports to Africa increased by about 11 percent last year,” said Mr Jean Samandari, EABC vice chairperson, Burundi Chapter. He added that Burundi exports to the EAC rose by approximately 8.4 percent from $51 million in 2021 to $55.3 million in 2022. Most exports from Burundi were destined for the Democratic Republic of Congo at about $38.7 million, followed by Tanzania at about $9.9 million. On the other hand, Burundi’s domestic export earnings from the world surged by approximately 27 percent to $195.5 million in 2022 from $154...

Kenya and Uganda have signed a common pact to sort out congestion at borders in Tororo and Busia districts. In doing so, they will have beaten the jam at both borders, which lie on the major trade route, the Northern Corridor, for goods to and from Uganda, Rwanda, Burundi, the Democratic Republic of Congo and South Sudan. Specifically, both countries have resolved to undertake the construction of a dual carriage road on the Northern Corridor route, and to also have two new borders routes created in Busia, at Mulwadda in Buhehe Sub- County and Buteba in Buteba Sub- County. Ms Rebecca Kadaga, the First Deputy Premier and Minister for East African Community (EAC) Affairs and her Kenyan counterpart, Ms Peninah Malonza, Kenya's Cabinet Secretary for the EAC, signed on behalf of their countries last Friday. Malonza said they had agreed to a joint venture of undertaking dual carriage roads between Kisumu and Eldoret, both in Kenya, and Mukono in Uganda, adding that the move aims at reducing congestion on the Northern Corridor, which is experiencing increasing volumes of trade. “The construction of the dual carriage road aims to cater for challenges of congestion which has, for years, continued to be an impediment to the faster movement of goods and services in the region,” Malonza said. She added that they agreed to create border points at Buteba and Mulwadda (in both Kenya and Uganda) to reduce pressure on Busia and Malaba. “As Kenya, we already have a framework for the establishment...