Complex and stringent rules of origin can prevent businesses from taking advantage of trade preferences, according to a new study by UNCTAD and the Common Market for Eastern and Southern Africa (COMESA) secretariat. Rules of origin are the “passport” for goods, determining whether they can be exempted from taxes or taxed less under a preferential trade arrangement or free trade area (FTA). They can be complex to comply with – especially for products made using materials from different countries through global value chains – and can make it difficult for products to qualify for trade preferences. This complexity can hinder African businesses from benefiting from preferential trade agreements that the continent’s governments have increasingly signed to increase intra-African trade or exports to partners like the European Union (EU). Utilization rates Utilization rates measure the extent to which firms are using FTAs. The study uses rates reported by COMESA countries to examine how effectively firms in those nations are using trade preferences offered by FTAs. “Making utilization rates publicly available will help governments monitor the effectiveness of trade agreements,” says Paul Akiwumi, director of UNCTAD’s division for Africa and least developed countries. “And understanding which trade agreements are working better for African firms will help the continent’s governments improve the outcome of trade negotiations and ensure better trade deals,” he adds. Underutilized potential of free trade agreements The study compares the utilization rates of COMESA members under FTAs with other African countries and preferential agreements with Canada, the EU, Japan and the United...

East African Business Council (EABC) has raised new concerns that variations in tax policies are distorting prices and frustrating intra-EAC trade and investment. As a result, the EAC member states are being urged to eliminate discriminatory taxes and accelerate the harmonization of domestic taxes within the bloc if they are to attract improved cross-border and foreign direct investments. Unharmonized taxes, it emerged, was largely contributing to the bend of the intra-EAC trade and cross-border investment and frustrating the free movement of goods, services, service suppliers, and workers. Speaking during the Validation Webinar for the Study on Discriminative Taxes and Harmonization of Excise Duties in the East African Community (EAC) – the Council’s Chief John Bosco Kalisa, called on the EAC Partner States to adhere to Article 15:2 of Customs Union Protocol that states for the trade within the bloc to flourish. “No Partner State shall impose, directly or indirectly, on the products of other Partner States any internal taxation of any kind in excess of that imposed, directly or indirectly, on similar domestic products,” states the article’s excerpt. The continued intra-EAC trade decline reflects a gradual loss of competitiveness among the region’s manufacturers compared with Asian exporters, as well as increasing protectionism fueled by political tensions among some member countries that have engulfed the region over the past couple of years – limiting attractiveness. Other upshots include an unlevelled playing field for business and difficulties in marketing the EAC bloc as a single investment destination, according to Kalisa. The harmonization...

Summary The FSNWG data shows Rwanda breweries imported 3,991 tonnes of sorghum from Uganda. Small scale cross-border traders complain they have not fully benefited from the reopening of the border. Previously most of the informal trade at the Gatuna-Katuna border was in foodstuff such as maize flour. Rwanda’s appetite for imports from Ugandan grew to a record $60.55 million in the fourth quarter of 2022 from $15.64 million in the first nine months to September as Kigali turned to her regional neighbours for food supplies and raw materials. Latest Bank of Uganda trading data shows exports, which had stagnated in single-digit millions of dollars between January and September 2022, grew to an average of $20 million monthly between October-December. Ugandan economist Fred Muhumuza attributed the growth to lower harvests in Rwanda that necessitated food imports. “The importer ... has to import a lot of food to restock. In future, we might see export levels reduce,” he told local media in Uganda. Highlights published in the East African Cross Border Trade Bulletin by the Food Security and Nutrition Working Group (FSNWG) show that Rwandan authorities were under pressure to provide adequate food and also ensure sufficient supply for raw material, especially for breweries. The FSNWG data shows Rwanda breweries imported 3,991 tonnes of sorghum from Uganda, 2,065 tonnes of maize and 2,866 tonnes of rice from Tanzania. However, small scale cross-border traders – who used to dominate the informal trade business – complain they have not fully benefited from the reopening...

Luanda- The Cabinet Council analysed Thursday the draft project resolution that approves Angola’s ratification of the Agreement that creates the Tripartite Free Trade Zone COMESA-EAC-SADC. The document analysed in the first Extraordinary Session led by President João Lourenço will be submitted to the National Assembly. The agreement aims to establish a legal framework for trade in goods and services between member states of the Common Market for Eastern and Southern Africa (COMESA), the East African Community (EAC) and the Southern African Development Community (SADC), in accordance with the laws and regulations in force in each country. It also aims to promote the economic and social development of the region, creation of a large common market with free circulation of goods and services and the promotion of intra-regional trade. Among the objectives of the agreement are also the strengthening of regional and continental integration processes and the building of a strong Tripartite Free Trade Area for the benefit of the peoples of the region. The agreement also provides for the progressive elimination of tariffs and non-tariff barriers to trade in goods, the liberalisation of trade in services, cooperation in customs matters and the implementation of trade facilitation measures. The COMESA-EAC-SADC tripartite mechanism was established during the first Heads of State and Government Summit held in Kampala, Uganda October 22, 2008. Read original article

To align with its West Africa expansion, TradeMark East Africa rebranded last month to TradeMark Africa as its sub-regional office will be headquartered in Ghana’s Accra. This marks an important step in trade facilitation within the Economic Community of West African States (ECOWAS) region, with CEO David Beer expecting that bureaucratic delays at the various borders will soon be cut down by at least 70%. Read original article

East African Community leaders and the business community are excited at the move by Kenyan President William Ruto to ease trade restriction between Kenya and Uganda, saying it gives new hope for deeper integration. Since his inauguration in September last year, Ruto has reversed several of his predecessor’s policies including lifting restrictions on imports from Uganda mainly dairy, poultry and sugar products. Though President Kenyatta largely maintained silence as the products were being confiscated, he was seen as responding to concerns by farmers’ and political leaders there, that Uganda’s low-priced products were killing the Kenyan agricultural sector. President Ruto has severally said no product from Uganda should be barred because EAC was all about free trade. Uganda has also recently attempted to stop importation of rice from Tanzania to protect local producers, while previously Tanzania had rejected sugar and maize from Uganda saying the country could produce enough for its own market. John Bosco Kalisa, the Chief Executive East African Business Community says the resolution of these disputes should lead to the removal of more non-tariff barriers to trade. First Deputy Prime Minister and Minister for EAC Affairs, Rebecca Kadaga said a lot still had to be done, and condemned the practice of closing borders as hurting the business community and the innocent citizens. Speaking on Friday before a retreat of the EABC Board on the regional integration agenda in Kampala, Kadaga regretted that the traders at the Uganda-Rwanda border had got hope after Kigali announced the reopening of the...

The Sustainable Energy Fund for Africa (SEFA)  of the African Development Bank Group will provide a $1 million technical assistance grant to the Green Mobility Facility for Africa (GMFA). GMFA provides technical assistance and investment capital to accelerate and expand private sector investments in sustainable transport solutions in seven countries: Kenya, Morocco, Nigeria, Rwanda, Senegal, Sierra Leone, and South Africa. The SEFA grant will support the creation of an enabling environment for Electric vehicles (EVs), the design of EV business models and guidelines for the public and private sector, the development of a bankable pipeline of e-mobility projects, regional coordination, and knowledge sharing amongst other upstream activities to help catalyse follow-on private sector financing during the subsequent investment phase of the GMFA. “Mobility is a fundamental lifeline that connects people to critical services, jobs, education, and opportunities,” said Nnenna Nwabufo the Director-General of the Bank’s East Africa Regional Development and Business Delivery Office. “The African Development Bank is committed to building a sustainable and more climate-resilient future by catalysing private investment in low-carbon solutions. We believe GMFA will have a tremendous impact on the African market by accelerating the shift to green mobility, reducing over 2,175,000 carbon dioxide equivalent tons  of greenhouse gas emissions and facilitating the creation of 19,000 full-time jobs.” “Future demand for mobility solutions and vehicle ownership is expected to increase with rapid urbanisation, population growth, and economic development. We are delighted to receive this support from AfDB. We see this as a vote of confidence in...

There was relief to Busia Cereal business ventures as a Sh. 38million market constructed by TradeMark Africa (TMA) was inspected in readiness for use in two weeks’ time by cross border traders. The first modern cereal market is set to house over 160 traders both from Busia Kenya and Uganda and is 99 per cent complete according to the report by the committee comprising of TMA, office of County Commissioner Busia led by ACC Adano Duba, Cross border traders and CEC Trade Investment and cooperation Omuse Olekachuna. “This is the first modern cereal market with the best facilities that will give a new look to the town of Busia. The market is dear and a big relief to traders who have been doing their business on the roads in scorching sun,” noted CEC trader Olekachuna. The market will be launched at a time when traders had lost their structure constructed along road reserves in efforts to reorganize the town. Simon Konzolo, the project manager at TradeMark Africa-Kenya who has been overseeing the construction of the market applauded the traders for their patience noting that over 300 traders who were displaced will be given first priority in the allocation of stalls at the market. “The process of allocation of stalls will be free and fair with priority being given to displaced traders who paved the way for the construction of this market,” noted Konzolo. This is the first phase of the project even as traders seek the county government of Busia...

Angola, Democratic Republic of Congo and Zambia, member countries of  Southern African Development Community (SADC), have signed the Lobito Corridor Transit Transport Facilitation Agency (LCTTFA). The LCTTFA Agreement aims to provide an effective and efficient route that facilitates the transportation of goods within territories between the three Corridor Member States, through harmonisation of policies, laws and regulations; coordinated joint corridor infrastructure development strategies and activities; dissemination of traffic data and business information; and implementation of trade facilitation instruments to support greater participation of small and medium enterprises (SMEs) in business value chains mainly in agriculture and mining with the view of increasing trade and economic growth along the Lobito Corridor and across the SADC Region. Honourable Ricardo Daniel Sandão Queirós Viegas de Abreu, Minister of Transport of the Republic of Angola, highlighted that the Lobito Corridor Transit Transport Facilitation Agency will provide alternative trade route for importers and exporters from the DRC and Zambia and improve international and domestic traffic levels. The Agency will promote the sustained maintenance of the infrastructure and stimulate the development of the Lobito Corridor, ensuring that such development, infrastructure and other support services meet the present and future user requirements and encourage the reduction of costs associated with the movement of cargo and passengers along the Corridor. He said the Corridor presents an opportunity for the three Member States to establish and consolidate cooperation in the movement of people and goods; ensure cooperation in rail and road traffic; provide a more efficient and effective route...

South Sudan’s Juba International Airport has the heaviest costs for travellers and transporters, showing just how pricing can be a barrier to movement in the East African region. A study on air transport ranks the Juba airport as the fourth most expensive in Africa in terms of passenger charges, just below Niamey, Monrovia and Bissau airports. The study, released in January and titled ‘‘Air Transport Services Liberalisation in the East African Community, Focus on Drivers and Regulations’’, was carried out by the East African Business Council (EABC), TradeMark Africa (TMA) and the government of the Netherlands. Juba (South Sudan), Melchior Ndadaye International Airport (Burundi) and Entebbe (Uganda) airports have high airport tax on passengers, making them expensive destinations. “The airport tax charged of $122 at Juba International Airport on passengers is above the EAC regional average of $67,” the report says. Infrastructure, qualified personnel EABC chief executive John Kalisa attributes the costs to the lack of well-developed infrastructure and qualified personnel to control the airspace. “The major factors constraining the growth of air transport in EAC especially in South Sudan, is poor infrastructure and insecurity. The airport lacks cold rooms for storage of cargo making, among other facilities,” said Kalisa. “There is also non-uniformity in passenger handling charges in the EAC making some of the airports, including Uganda and Burundi, slightly expensive.” Uganda imposes a charge of $0.6 per boarding pass and the $10 on transfers, which are not imposed by other EAC member countries, other than Burundi which imposes...