A report of the recently concluded high-level conference on trade integration notes that there is a downward trend on the profile of the East African Community (EAC) as an attractive investment destination. The report calls for the EAC Partner States to market EAC jointly, further consolidate free trade by eliminating individual State exemption lists, liberalize and allow free movement of trade and services, eradicate non-tariff barriers (NTBs), fully harmonize the Common External Tariff (CET) and domestic taxes and make business immune from politics. To enhance competitiveness, the reports say EAC needs to reduce the cost of production, and stop relying on duty exemption arrangements like AGOA. Cost of production can be lowered by managing labour, energy, logistics and cost of inputs, like raw material. “Partner states should play complementary roles in ensuring that the region does not continue being the market of finished goods from other regions, but also a producer of goods for export,” it says. However, delegates at the conference noted that there has been remarkable progress made on the EAC regional integration pillars namely the Customs Union, the Common Market, the Monetary Union and the Political Federation. Among them, the Customs Union is regarded as most successful notably with the implementation of common legal instruments and trade facilitation programmes across the region including the Single Customs Territory, One Stop Border Posts, Authorized Economic Operator Programme and the Customs Business systems interconnectivity. The conference that was held in Nairobi, Kenya from September 25-27, 2019 was held to commemorate...

The African Heads of States and Governments pose during African Union (AU) Summit for the agreement to establish the African Continental Free Trade Area in Kigali, Rwanda, on March 21, 2018. The focus now is on how to bring on board all signatories and push for ratification by all. PHOTO | FILE | NATION MEDIA GROUP With the July 1, 2020 launch of the African Continental Free Trade Area (AfCFTA) fast approaching, 90 percent of outstanding issues on the rules of origin and tariff guidelines have been resolved. A meeting of director-generals of Customs, revenue authority officials and trade experts from member states, held last week in Kampala Uganda, focused on how to bring on board all signatories and push for ratification by all. The AfCFTA agreement came into force in May 2019 after ratification from 27 countries. Of the 55 African countries, 54 have signed the agreement, with only Eritrea holding out. A gathering of AU heads of state is scheduled to endorse the rollout plan for the AfCFTA agreement following their endorsement in January 2020. While African customs officials say AU officials are working on persuading Eritrea to sign the agreement, chances of realising a breakthrough remain low. Eritrean government officials could not be reached for comment by press time. Source: The East African

Africa is expected to commence trading under the African Continental Free Trade Agreement (AfCFTA) in July 2020. This gives the continent’s top diplomats, technocrats and negotiators less than a year to agree on the modalities that will govern the world’s largest free trade area since the establishment of the World Trade Organisation in 1995. Having attended the Source21 Common Market for Eastern and Southern Africa (Comesa) High–Level Business Summit held in Nairobi this past July, it was clear that the key issues that African governments need to agree on before trading begins under AfCFTA are duties, levies and Rules of Origin, which will determine the eligibility of goods and services to be traded in the free trade area. According to the Washington-based research group, Brookings Institution, intra-African exports accounted for 18 percent of the continent’s total exports in 2016, compared with 59 percent for intra-Asian exports and 69 percent for intra-European exports. AfCFTA is expected to fundamentally transform the current state of intra-regional trade in Africa by, first, phasing out tariffs on 90 percent of goods traded on the continent by 2022 and, later, helping countries build larger and more sophisticated regional value chains. To achieve these goals, a much broader and inclusive discussion that incorporates the interests and recommendations of key private sector players in Africa is needed. This is because businesses are able to channel investments into sectors where governments lacks the experience or technical expertise to succeed. Source: The East African

NAMANGA, Kenya/Tanzania (Reuters) - The speed limit is 110 km per hour on the new highway that Abadalla Chande uses to haul his truckload of animal feed from Tanzania to Kenya, two nations that share a common market often hailed as a model for the continent. But Chande is parked on the tarmac, caught up in a snarl of red tape. He is in a long line of trucks waiting for cargo to be scanned or for documents to be checked by officials. Kenya and Tanzania are the two largest economies in the East African Community (EAC) common market. It was set up in 2010 to allow people and goods to move freely among members, which also include Uganda, Rwanda, Burundi, and South Sudan. One of the most successful of Africa’s many trade blocs, it should be superseded by a continent-wide free trade area that will begin trading in July next year. But businessmen say the delays plaguing the East African union bode ill for the future of the unified market. “Sometimes we get to the border crossing and spend five, six days or even a week,” said Chande, who said he’d been waiting there more than a day. Behind him, police pried apart shouting drivers as hundreds of trucks slowly belched and groaned towards the Kenya-Tanzania border in Namanga town. Kenyan and Tanzanian officials say that even in a free trade area, goods crossing borders must be checked by multiple agencies including the tax authorities, plant health inspectorate, departments...

Trade among the interstate EAC members is still very low despite the various protocols that allow free movement of people and goods in the region. The East African Business Council says the volumes in trade among member states are as low 2%. Peter Mathuki, the CEO East African Business Council spoke at a meeting with private sector players at Busia border. Source: NTV

President Paul Kagame on Tuesday said that Africa is ready to play her role in addressing global challenges such as global inequality and others which affect the continent directly, which can only be addressed by working together. President Kagame made the remarks while addressing the United Nations General Assembly (UNGA) as global leaders gather in New York to galvanize multilateral efforts for poverty eradication, quality education, climate action, and inclusion. In his speech, President said the international community stands at a crossroads because the next decade could be remembered in history as a turning point, or as the moment when multilateralism lost its way, highlighting some of the key milestones that will set the momentum ahead. “Fortunately, the path forward is clear. Never before have we had such well-defined road-maps for joint action on development, climate change, and global health,” President Kagame said, citing the Universal Health Care and Climate Action declarations adopted this week as key steps. “The transformational potential of Universal Health Coverage is now at the top of the global health agenda. This is thanks to the outstanding leadership of the World Health Organisation and many other stakeholders,” “In Rwanda, more than 90 percent of the population has insurance coverage. This has contributed to significant improvement in health outcomes. It shows that it is possible for countries at every income level to make health care affordable and accessible for all,” President Kagame said. The Head of State called on global leaders to commit to replenishing the Global...

For many African economies, promoting trade is a priority. Rightfully so, considering its potential snowball effect. When trade flourishes, it sets off a virtuous circle, a country’s goods enjoy ready market, producers and the entire value chain benefit and growth spreads out. However, turning this vision into a reality is a challenge. Trade remains depressed below optimum levels despite sustained investment in smoothening movement of goods. Over the years, billions of dollars have gone into interconnecting the continent by expanding existing roads, railways, air and waterways while building new ones. The rollout of infrastructure has been backed by sustained diplomatic efforts under the auspices of regional trade blocs to ease movement of goods and people, as well as free trade protocols, such as the East African Community common market. These recently climaxed with the proposed African Continental Free Trade Area (ACFTA) that is being ratified and is expected to be a game-changer in unlocking intra-African trade. All these notwithstanding, the higher cost of goods made in Africa has rendered them uncompetitive on the global market. Source: Business Daily

Despite the current pessimism surrounding the future of Kenya Airways, the International Air Transport Association forecasts more than double growth for the country’s air transport sector in the next 20 years. According to IATA, the sector will grow by 249 per cent over the period if the current trends are maintained, contributing $11.3 billion annually to Kenya’s GDP and supporting an estimated 859,000 jobs by 2037. BUSY ROUTE The findings were made in the Value of Aviation Report for Kenya that was launched during IATA’s Regional Aviation Forum hosted by Kenya Airways on September 17. The report looked at the total contribution of jobs and spending generated by airlines and their supply chain; trade and tourism flows; investments by users of all airlines serving a particular country as well as the city pair connections that make these flows possible. According to IATA, the air transport sector contributed $3.2 billion to the economy, amounting to 4.6 per cent of the country’s GDP in 2017. Kenya received 4.8 million foreign passengers in 2017, which supported 410,000 jobs. About $0.9 billion was spent directly by passengers, which supported 15,000 jobs. Another $0.6 billion was spent on the industry’s supply chain, supporting 96,000 jobs. Tourists who arrived by air spent $1.6 billion, supporting 257,000 jobs in the hospitality sector. According to the report, Africa remains the biggest source of air passengers to Kenya, contributing 3.1 million passengers or 70 per cent of total visitors in 2017. Europe came next with 585,000 passengers followed by Asia-Pacific 284,000,...

Source: Youtube

On July 6-7, 2019 I was in Niamey both for the pre-Summit Business Forum and for the African Union’s Extra-Ordinary Summit to celebrate the first Anniversary of the Signing of the African Continental Free Trade Area (AfCFTA) and launch of its operational phase. What is the outlook for the World’s largest single market? As I write, the AfCFTA process is well on track to be ready for trading in July 2020 as planned and Accra, Ghana has been chosen as a location of the AfCFTA Secretariat. In the 2019 edition of our UNCTAD Economic Development in Africa Report, titled Made in Africa: Rules of Origin for enhanced intra-African trade, we argue that it is Rules of Origin that will make or break the AfCFTA. Essentially, rules of origin are a passport for goods. Rules of Origin are at the cornerstone of what it means for goods to be labelled “Made in Africa”. They are a set of technical requirements that define goods’ eligibility for preferential tariffs on imports in a Free Trade Area. Rules of Origin Rules of origin are situated at the nexus of trade and industrial policy. Make them soft and a Free Trade Zone runs the risk of not spurring the creation of local value. Make them too strong and countries risk being considered too protectionist and firms may find them too difficult to comply with. The complexity and incompatibility of different sets of rules of origin across regional economic communities in Africa is one of the many...