THIRTY ninth Southern African Development Community (SADC) Summit ended yesterday, with the signing of three development cooperation programmes with the European Union (EU). The 47 million Euros deals for the period of five years are under the 11th European Development Fund (EDF). The programmes, which will be implemented by the SADC Secretariat are Support to Improving the Investment and Business Environment (SIBE), Trade Facilitation Programme (TFP) and Support to Industrialisation and Productive Sectors (SIPS). SADC Executive Secretary Dr Stergomena Tax signed the agreements on behalf of the community while EU was represented by its ambassador to Botswana and SADC Jan Sadek. According to Dr Tax, SIBE programme aims at achieving sustainable and inclusive growth and support job creation through transformation of the region into investment zone, promoting intraregional investments and Foreign Direct Investments (FDIs), with the focus on small and medium enterprises (SMEs). Trade Facilitation Progamme (TFP) will contribute to enhancing inclusive economic development in the SADC region through deepening regional economic integration. She said the SIPS programme aims at contributing to SADC industrialisation agenda, improving performance and growth of selected regional value chains and related services within the agroprocessing and pharmaceutical sectors. “The signing of the three programmes reflects an enduring partnership between SADC and EU towards enhancing SADC regional integration and social economic development, particularly at the time when SADC has committed to place industrialisation at the centre of regional integration,” Dr Tax said. According to Dr Tax, the programmes are interconnected and interdependent and collectively contribute to...

Intra-African trade remained low at 14.4 per cent in 2018, with the continental countries trading more with the Asia, according to a revew by the African Development Bank (AfDB) The Annual Development Effectiveness Review 2019, shows the activity was low against a 2015 baseline of 14.6 per cent and a target for 2018 at 17 per cent. The trade is expected to reach 25 per cent in 2025. AfDB said non-tariff barriers and a lack of political goodwill to address the challenges impede progress. It also cites poor infrastructure in roads and energy transmission lines constructed or rehabilitated to enhance cross-border trade. “Intra-Africa trade could grow by up to 15 per cent if the bilateral tariffs that are applied today in Africa are eliminated and the rules of origin kept simple and transparent,” AfDB said. The bank points to barriers that could restrain the African regional economic integration that was given a boost in March 2018 with the established African Continental Free Trade Area (AfCFTA). The AfCFTA is projected to increase intra-African trade by 52 per cent by 2022. Kenya ratified the deal. AfCFTA became operational in July after meeting the ratification threshold from other 22 countries. “By committing countries to remove tariffs on 90 per cent of goods, liberalising tariffs on services and addressing other non-tariff barriers, AfCFTA is expected to significantly increase the value of intra-Africa trade and investment,” notes the report. According to the bank, barriers such as cost of trading across borders remains high, more than...

The U.S.-China trade war and uncertainty over Brexit pose risks to Africa’s economic prospects that are “increasing by the day,” the head of the African Development Bank (AfDB) told Reuters. The trade dispute between the world’s two largest economies has roiled global markets and unnerved investors as it stretches into its second year with no end in sight. Britain, meanwhile, appears to be on course to leave the European Union on Oct. 31 without a transition deal, which economists fear could severely disrupt trade flows. Akinwumi Adesina, president of the AfDB, said the bank could review its economic growth projection for Africa - of 4% in 2019 and 4.1% in 2020 - if global external shocks accelerate. “We normally revise this depending on global external shocks that could slowdown global growth and these issues are increasing by the day,” Adesina told Reuters on the sidelines of the Southern African Development Community meeting in Tanzania’s commercial capital Dar es Salaam. “You have Brexit, you also have the recent challenges between Pakistan and India that have flared off there, plus you have the trade war between the United States and China. All these things can combine to slow global growth, with implications for African countries.” The bank chief said African nations need to boost trade with each other and add value to agricultural produce to cushion the impact of external shocks. “I think the trade war has significantly impacted economic growth prospects in China and therefore import demand from China has fallen...

Non-Tariff Barriers (NTBs) have a huge bearing on the cost of doing business not only in Uganda but also the entire East African (EAC) region. NTBs are restrictions that result from prohibitions, conditions or specific market requirements that make importation or exportation of products difficult and/or costly. The EAC Elimination of NTB Act, 2017, defines NTB as laws, regulations, administrative and technical requirements other than tariffs imposed by a partner state, whose effect is to impede trade. Uganda loses about $827m (about Shs3.1 trillion) annually in logistics inefficiencies in import and export of goods. Yet logistics costs account for between 18 and 20 per cent of the sale price of goods sold in Uganda, according to National Logistics Platform. Currently, logistics bottlenecks and inefficiencies are present at multiple stages in the supply chain, including loading, delivery and warehousing, packaging and waste management. Traffic congestion along key transport corridors, roadblocks and checkpoints only push up time and costs of logistics, which are passed onto the shippers, but the consumers ultimately pay the price. Other challenges include absence of synergies within ministries, departments and agencies of government, insufficient information on trade and services, undefined taxes, challenges around Pre-Export Verification of Conformity and absence of Small and Medium Enterprises database, plus the high cost of finance. The 2018 port transit report places Uganda as the biggest user of the Mombasa port with about 82 per cent of her cargo passing through it. But Ugandan traders also lose their cargo more often whenever they...

A raft of measures that the taxman, the Uganda Revenue Authority (URA) has undertaken to raise domestic revenue as a percentage of GDP over the years continues to bear sweet fruits, elevating the country’s tax to GDP ratio. Whereas URA was charged with collecting a net revenue target of sh16.4 trillion, the financial year closed with sh16.6 trillion generated, registering a growth rate of 14.95% or, in real terms, an addition of sh2.16 trillion to the treasury in comparison to the 2017/18, according to Doris Akol, the URA Commissioner General. “The performance was 101.58% which, in real terms, meant a surplus of sh258.8b above the target and the highest target that URA has registered over its 28-year period” she told reporters at the annual press briefing recently. UGANDA AND EAC Uganda’s average net revenue collections growth over the past 5-year period was at 15.72%. “The tax to GDP ratio has increased from 12.84% in the 2014/15 to 15.11% in the 2018/19 above the National Development Plan (NDP 2) target of 14.90%,” says Akol. This growth elevated Uganda’s tax to GDP ratio, with URA currently 3rd in the EAC bloc. In the 2018/19, we recorded a tax to GDP ratio of 15.1%. Kenya, at 16.5% generates more revenue domestically, followed by Rwanda (15.2%), Uganda (15.1%), Tanzania (13.2%) and Burundi (13.4%), says Akol. “By the end of this 2019/20FY, we expect to be at 16% but you can’t compare us too much with others because their economies are not the same as...

The Minister of Trade, Industry and Cooperatives, Hon Amelia Kyambadde is expected to make a strong case for the African Continental Free Trade Area (AfCFTA) at the second Regional Logistics Expo 2019 (RLE2019), to be held next week on August 21st and 22nd, 2019 at the Sheraton Kampala Hotel. The operational phase of the AfCFTA was launched at the Niger Summit of the African Union, last month, with the free trade area expected to tear down borders and ensure full continental integration. AfCFTA is also expected to drive growth and innovation for Africa, and to create opportunities for sustainable development and realizing Agenda 2063. The AfCFTA will be one of the largest free trade areas since the formation of the World Trade Organisation, given Africa’s current population of 1.2 billion people, which is expected to grow to 2.5 billion by 2050. The Trade Ministry has been rallying Ugandan businesses to be ready to exploit the opportunities that will arise with the continental agreement, with Hon Kyambadde at the forefront. “She is very passionate about AfCFTA,” Mr Julius Kasirye, the Senior Commercial Officer at the Trade Ministry, said. “When she begins speaking about AfCFTA, she convinces you that anything is possible,” Mrs Merian Sebunya, the chairperson of the National Logistics Platform, one of the partners of the RLE2019, added. Both were speaking recently during an Expo preparatory meeting held at the Ministry of Works and Transport (MoWT) offices. The Uganda Freight and Forwarders Association (UFFA) is hosting the Expo, in partnership...

President Paul Kagame says the African Continental Free Trade Area (AfCFTA) should ease free movement of people as it will for goods because goods cannot move on their own if people cannot move freely. President Kagame made the observation on Friday at the inaugural Private Sector Federation (PSF) Golden Business Forum which brought together over 600 members of the business community from Rwanda and 22 other countries under the theme “Unlocking Intra-Africa Trade”. The Head of State said the pace of regional and continental integration has accelerated significantly in recent years, citing the AfCFTA under which African countries will begin trading in July 2020 as one of the key milestones of integration on the continent, adding that they should ease free movement. “The Protocol on the Free Movement of People has been signed, and the ratification process is underway. Once in effect, Africans will no longer require visas to travel within Africa, among other valuable rights,” “How are we going to allow free movement of goods but you don’t allow free movement of people?” President Kagame wondered. He noted that African countries have to understand that even with most restrictions on movement of people and visas, people have been moving. “They move across borders whether you give them visas or not. Some of these people are brothers and sisters, only that they live on opposite side of what is known as the border,” “It is up to us the leaders to really make it easy for all of us because...

East Africa's intra-regional trade has fallen to 0.2 per cent of global trade due to persistent trade disputes and barriers. The United Nations Conference on Trade and Development (Unctad) has now launched a study on the impact of non-tariff barriers (NTBs) on trade. The study was announced after a meeting between Kenya and Tanzania called to resolve outstanding NTBs in July failed to take off. The EastAfrican has learnt that Unctad is looking for national consultancies from Kenya, Uganda, Tanzania, Rwanda and Burundi to come up with a report on NTBs for each country. The national reports will then be compiled into a regional document. Unctad Secretary-General Mukhisa Kituyi confirmed that the study is underway, but it was too early to discuss it. "I will comment when we have the results of the survey," he said. Despite EAC partner states committing themselves to remove NTBs, they remain prevalent. Attempts by regional states to deal with NTBs through various initiatives like the EAC Time-Bound Programme for Elimination of Identified NTBs (EACS, 2009) seem to have achieved little. Under the EACS, member states were supposed to come up with a list of NTBs reported by partner states, and update them during quarterly review meetings. During the meetings, new NTBs would be reported and those that had been resolved would be moved to the end of the list. Intra-EAC trade is just 20 per cent compared with other regional economic blocs like the South African Development Community (SADC) which stands at 58 per...

The African Development Bank Group has signed a $4.8 million institutional support grant to the African Union (AU) for implementation   of the African Continental Free Trade Area (AfCFTA). The grant, approved by the Group’s Board of Directors on 01 April 2019, forms part of a series of interventions by the Bank in its lead role to accelerate implementation of the Free Trade Agreement, seen as a major force for integrating the 55-nation continent and transforming its economy. Albert Muchanga, AU’s Commissioner for Trade and Industry, for the continental body, while Obed Andoh Mensah, representing the Bank’s Director of the Industrial and Trade Development Department (PITD), signed on behalf of the Bank, signaling the startup of implementation. African leaders meeting in Niamey, Niger in early July launched the implementation phase of the free trade area agreement established in March 2018 after it became operational at the end of May this year. Currently, 54 states have signed the deal and are set to begin formal trading next July. “The AfCFTA is going to work and we are confident that by the 1st of July next year, all the 55 countries would have been state parties – meaning, they would have signed and ratified the agreement and intra-African will start,” Muchanga said in a statement and urged countries to use this period to complete the parliamentary processes. In the statement, Muchanga commended the Bank’s strong and consistent support to ensure smooth implementation of the Agreement, saying the grant would be used judiciously for the...

EAC and Regional Development Cabinet Secretary Adan Mohamed speaking during the East African Business Council 20th annual general meeting said that the Monetary Union envisages a situation where there are common monetary and fiscal policies that enable people to trade in a common currency. He noted that the future role of the East African Business Council should usher in a more dynamic and strengthened self regulation mechanism for the private sector, that focuses on critical issues that will be game changers for the region. The CS said this will enable the citizens in the member states to trade seamlessly with one another more than is currently happening. According to Mohammed, the regional economic groupings are anchored on market-based policies, mainly liberalization, wide public, civil society and private stakeholder involvement and convergence of macro-economic policies. The CS said that the EAC is a strong regional bloc that is the most integrated on the continent, that has seen a lot of growth over the years adding that the private sector in the region continues to play a critical role in economic development. He noted that as an economic block the EAC must make themselves attractive on our Ease of Doing Business agenda. “We must make ourselves attractive on our Ease of Doing Business agenda, infrastructure development and other enablers that support business growth,” said CS Mohammed. He emphasized to the member states the need to stick together as EAC in order to compete at the global stage noting that EAC’s combined market size is...