Finland Ambassador to Kenya, H.E. Pirkka Tapiola says his country is committed to doubling trade with Africa over the next decade. The ambassador spoke while touring the Port of Mombasa on Friday. The envoy commended the Government of Kenya and Development Partners for supporting Port Reforms and Modernisation Programme over the last decade that has dramatically improved evacuation of cargo at the facility. It for instance used to take 11 days to process imports through Mombasa in 2010, the time had fallen to only 5.5 days by 2017. The time to transport a container from Mombasa to Bujumbura also fell by 16.5% over the period. The Government of Finland, through TradeMark Africa has over the last decade invested more than US$13.1 million to support various projects in and around the Port of Mombasa. Finland also contributed US$445,000 to provide Personal Protective Equipment (PPE) through the Safe Trade Emergency facility by TradeMark Africa, a project that sought to keep ports, borders, and critical supply chains in the region safe for trade at the height of the COVID-19 pandemic. The Ambassador was received by General Manager Human Resources and Administration Mr. Daniel Ogutu and TradeMark Africa Deputy CEO, Allen Asiimwe.  The KPA General Manager noted that the support provided at the outset of COVID-19 was critical in keeping the port running. He further noted that port output slowed down due to COVID-19-related interruptions, calling on all stakeholders to work together to address such challenges. TradeMark Africa Deputy CEO and Chief of Programmes...

Trade education is vital to further grow exports between the UK and Africa The Institute of Export & International Trade (IOE&IT) today announced a new investment in Africa with the opening of its first international office in Nairobi, Kenya. Building on the Kenya-UK Economic Partnership Agreement the IOE&IT is developing training, education and consultancy offerings for the entire African continent – unique and specific to Africa-world trade and intra-African trade. The opening of the office builds on a successful 2021 in Africa where the IOE&IT delivered qualifications in Kenya, Ghana and Nigeria. The Institute has worked with the International Trade Centres, along with the Ghana Export Promotion Authority and Nigerian Export Promotion Council, as well as developing a Trade and Information Pipeline (TLIP) with TradeMark Africa. UK exports to Kenya in 2021 were worth £530 million and imports from Kenya totalled £579 million. The TLIP project aims to increase trade for both sides and will help create greater visibility within supply chains and simplify the facilitation of trade between the UK and Kenya. The overall aim of the TLIP initiative is to reduce logistical time constraints for businesses by around 40%, reduce the cost of compliance by 20% – potentially worth an initial saving of up to £36m to UK Exporters. Marco Forgione, director general of the Institute of Export & International Trade “We are delighted to be opening our first office outside the UK in Kenya. It is a sign of how important we believe our work in Africa...

The official start of free trading under the African Continental Free Trade Area (AfCFTA) in January 2021 moved a major continental aspiration closer to reality. One year later, cross-border trade in goods and services may not exactly be in full swing as had been anticipated, but indications are that there is some progress—the cup is half-full, not half-empty. A major hurdle is ongoing negotiations on the remaining crucial elements of the trade pact, particularly rules of origin. However, in an interview with Africa Renewal last month, the Secretary-General of the AfCFTA Secretariat, Wamkele Mene, sketched an optimistic vision of 2022. Factory workers producing garments for overseas clients, in Accra, Ghana. Credit: World Bank In sum, AfCFTA’s implementation will rev into higher gear, traders would be delighted, and the push toward accelerated industrialization of the continent should begin in earnest. Concluding negotiations on rules of origin, which is basically to determine the “nationalities” of thousands of products to prevent dumping, will be key to success. Already, negotiators have reached an impressive 87.8 percent agreement on rules of origin. That includes more than 80 percent of the about 8,000 products listed under the World Customs Organisation’s Harmonized System of rules of origin and tariffs. Such a high threshold of consensus guarantees that the vast majority of products can be traded. “What is outstanding are automobiles, textiles, clothing and sugar. These account for about 12-15 percent of what we call the tariff book. We want to conclude negotiations on these so that we can reach...

The United Kingdom (UK) at the weekend reaffirmed its commitments to channelling investments into Africa as Britain’s development finance in Africa exceeded target to hit £2.2 billion by 2021. At the second UK’s Africa Investment Conference (AIC) at the weekend, UK affirmed that Africa remains the focus for investment over the next five-year strategy period. The CDC Group, UK’s development finance institution, exceeded its 2020 commitment to invest £2 billion in Africa over the last two years with a closing mark of £2.2 billion by the end of 2021. The growth in Britain’s investments in African businesses came amidst the unprecedented upheaval caused by the COVID-19 pandemic. The CDC is owned by the UK Government and it is regarded as a champion of the United Nation’s (UN) Sustainable Development Goals. All proceeds from investments are reinvested to improve the lives of millions of people in Asia and Africa. To enhance UK-Africa partnerships, UK at the second AIC launched a new ‘Growth Gateway’ – a digital tool to link African and British businesses to UK Government trade, finance and investment services and opportunities.  The service provides practical online support to businesses in Africa that want to export to and invest in the UK, and businesses in the UK that want to export to and invest in Africa, backed up by a team of trade and investment specialists. The second AIC highlighted Britain’s strategic plan to boost economic cooperation with African nations and enhance UK’s role as the continent’s investment partner of...

Summary In its latest market summary, the International Air Transport Association (IATA) said demand for air freight has stayed above pre-crisis levels. IATA director general Willie Walsh, said data points that the cost-competitiveness of air cargo relative to that of container shipping has improved over recent months. Kenya Airways and Ethiopian Airlines have already drawn up strategies to take advantage of their respective airports which are investing on cargo segments. The battle for the air freight market share among African airlines is intensifying, thanks to Covid-19 disruptions that have driven up ocean freight rates. Many airlines are now upgrading their fleets and expanding destinations as shortage of containers in the region continues to bite. In its latest market summary, the International Air Transport Association (IATA) said demand for air freight has stayed above pre-crisis levels. “African airlines saw international cargo volumes increase by 26.7 percent end of last year, which is the largest increase of all regions. International capacity was 9.4 percent higher than pre-crisis levels, Africa is the only region in positive territory, albeit on small volumes,” read part of the IATA market summary. Cost-competitiveness Shippers Council of East Africa Chief Executive Gilbert Lagat said, apart from cost and efficiency, time to receive consignments has boosted the air freight business considering persistent road and ocean delays. “Importers consider time, cost and efficiency. If the consignment reaches on time at a moderate cost, importers will consider and with the increasing trade barriers at the borders, air freight is the best...

Afreximbank in partnership with the AfCFTA Secretariat have launched the Pan-African Payment and Settlement System (PAPSS). The launch of PAPPS aims to boost intra-African trade by transforming and facilitating payment, clearing and settlement for cross-border trade across Africa. The platform is also expected to save Africa more than Ksh. 567 billion (USD 5 billion) annually in payment transaction costs, underpinning the operationalization of the AfCFTA. According to Afreximbank, PAPSS provides the solution to the disconnected and fragmented nature of payment and settlement systems that have long impeded intra-African trade. Prior to PAPSS, over 80% of African cross-border payment transactions originating from African banks had to be routed offshore for clearing and settlement using international banking relationships. That process posed multiple challenges including payment delays to operational inefficiencies and compliance concerns for the disparate regional payment systems. PAPSS, which has been successfully piloted in the six countries of the West African Monetary Zone, delivers among others, the following benefits. Reducing the cost, duration and time variability of cross-border payments across Africa. Decreasing the liquidity requirements of commercial banks for cross-border payments. Strengthening oversight of cross-border payment systems by central banks. Speaking at the launch event, Ghanian President Nana Akufo-Addo complimented Afreximbank and AfCFTA Secretariat for the establishment of the payment system saying, “This launch is a result of many months of hard work, resolve and commitment towards achieving set objectives for the growth of the continent in trade. All Central Banks in Africa must now join up and ensure seamless transfer of...

The Ethiopia-Djibouti railway, which runs from Addis Ababa to the port in Djibouti City, recorded $US 86.13m in revenue in 2021, a 37.5% increase on 2020. The line was used by 449 passenger trains and 1469 freight trains over the year, transporting 77,357 TEUs. The company also improved the efficiency of operation, with the time to process a freight train at the Port of Doraleh in Djibouti reduced from three days to one-and-a-half days, while the loading and unloading time at the dry port of Modjo was reduced from 12 to seven hours. Safety improved with no accidents recorded in 2021. Ethiopia’s Somali Region, the largest region through which the Yaji Railway passes, also implemented the Regulation on Railway Safety Protection on August 25 2021. The railway carried 96 special trains of fertilizer and 13 special trains of wheat into Ethiopia, with the line targeting new markets such as cooking oil, small cars and chilled fruits and vegetables. To improve the localisation of operation, 34 Ethiopian locomotive drivers were awarded their certificates on May 4 2021, followed by 15 shunter drivers on July 29. The 752km electrified line opened in October 2016, with the $US 3.4bn project 70% financed by China’s Exim Bank and built by China Railway Group and China Civil Engineering Construction. Read original article

Summary The AfCFTA is a flagship project of the African Union (AU) Agenda 2063, Africa’s long-term development strategy for transforming the continent into a global powerhouse of the future. The African Continental Free Trade Area is the world’s largest free trade area, and the largest trade organisation since the establishment of the World Trade Organisation, bringing together 54 countries of the African Union and eight regional economic communities to create a single market. It has a population of about 1.3 billion people and a combined GDP of about $3.4 trillion. In addition to being a free trade area, the AfCFTA is a flagship project of the African Union (AU) Agenda 2063, Africa’s long-term development strategy for transforming the continent into a global powerhouse of the future. The agreement establishing the AfCFTA was signed in Kigali, Rwanda, on March 21, 2018 by 44 AU member states. Ten more countries have since signed the pact. The AfCFTA Agreement entered into force on May 30, 2019, 30 days after the deposit of the 22nd instrument of ratification, as specified in its Article 23. Trading under the AfCFTA started on January 1, 2021. Opportunities The AfCFTA market comes with many opportunities, some of which are highlight in this article. Consumer welfare gains: Consumers will have limitless choice of quality products at an affordable price. This is due to the fact that AfCFTA aims at eliminating import duties on products that are produced within Africa and thus satisfy the rules of origin. It also defines standards...

Established in 2018, the African Continental Free Trade Area (AfCFTA) represents perhaps Africa’s biggest opportunity for the next few decades in its battle against poverty of all forms; energy and infrastructure included. Against the backdrop of the tens of millions of Africans that have been plunged into extreme poverty by the onslaught of the covid-19 Pandemic, a strong case must be made for a speedy implementation of the African Continental Free Trade Area. It is projected that under the AfCFTA, extreme poverty will significantly decline across the continent. West Africa, for instance, would witness the biggest decline in the number of people living in extreme poverty; namely a decline of approximately 12 million people, which is more than a third of the total for all of Africa. But beyond extreme poverty eradication, it’s about time that the true economic might of Africa is realised through intra-African trade. Compared with Asia and Europe with 59% and 68% intra-continental trade, only 17% of exports from African countries are intra-continental (World Economic Forum), due to age-long tariff and non-tariff barriers, which the AfCFTA is essentially established to eliminate. The fact that intra-African trade constitutes only about 2% of global trade means there are significant gains to be realised if the AfCFTA is properly implemented. A continent that controls vast resources and a 1.2 billion-strong consumer market should be an economic no-brainer of a success, especially considering its young burgeoning and vibrant population. The African socio-economic and political construct under the AfCFTA dispensation must...

This article is brought to you thanks to the collaboration of The European Sting with the World Economic Forum. About the author: Ratnakar Adhikari, Executive Director, Enhanced Integrated Framework (EIF) & Taffere Tesfachew, Acting Managing Director, UN Technology Bank for Least Developed Countries Limited use of technology is inhibiting LDCs’ path towards structural transformation. These countries can implement measures in several areas to build their technological capacity. Innovative approaches to resource mobilization should be explored to fund such transition. Structural transformation is the process of moving resources from low productivity to higher productivity and skill-intensive sectors, thereby setting development and economic catch-up into motion. While many countries have achieved structural transformation in a matter of decades, the least developed countries (LDCs) have been notoriously slow in this respect. One of the factors for this lack of structural transformation is LDCs’ overwhelming dependence on commodities for production and exports. According to the United Nations Conference on Trade and Development’s Commodities and Development Report 2021, over 75% of African LDCs depend on commodity production for over half of their export earnings, though Asian LDCs have a relatively diversified export basket. The report also suggests that it is extremely challenging to move away from the trap of commodity dependence and attain structural transformation. Fortunately, a combination of technology and global integration can help countries on this path. When it comes to technological advancement and its effective use, the LDCs are at the lower end of the ladder. According to the World Intellectual Property Organization (WIPO)’s Global Innovation Index 2021, which monitors the state of technological...