Local manufacturers are likely to benefit immensely from a newly implemented Africa-wide trade pact that provides access to a bigger market for their goods. The African Continent Free Trade Area (AfCFTA) protocol, launched at the Africa Union summit in Niger on Sunday after five years of deliberations, provides a single market of goods and services for 1.2 billion people with an aggregate Gross Domestic Product (GDP) of over $2 trillion (Sh200 trillion). ELIMINATE DEFICIT The adoption of the historic 55-nation agreement makes the whole continent a single market. Protocols will be aligned such that a Kenyan farmer can export avocado to Egypt duty-free, just as a Rwandese will be able to buy cocoa from Ghana. Kenyan manufacturers and exporters are upbeat that the trading bloc will be a boon for the country’s trade. Export Promotion Council chief executive Peter Biwott said Africa-wide trade, if well planned, could double the country’s exports, thereby eliminating the Sh1.15 trillion gap between exports and imports. “We import [goods worth] Sh1.7 trillion and we export Sh613 billion. The deficit can be eliminated if we increase our manufacturing and export enterprises. We target to get our exports to the mark of Sh2.3 trillion,” said Mr Biwott. Robust plan The government, he said, has a robust plan to make export trade efficient for existing enterprises as they recruit and train new ones in collaboration with the county governments. This is in a bid to scale up the range of products besides improving the manufacturing sector as a...

Infrastructure investment is one of the key pillars of the Agenda 2063 and for this to be achieved financing of these projects is still the continent’s biggest challenge. Rwanda’s Finance Minister, Dr. Uzziel Ndagijimana at the Africa 50 Summit joins CNBC Africa for more Source: CNBC Africa

On November 30, 2019, the East African Community (EAC) will be celebrating 20 years of existence. Lest we forget, it was on November 30, 1999 at Sheikh Amri Abeid Memorial Stadium in Arusha, Tanzania that three heads of state of the Republic of Uganda, the Republic of Kenya and the United Republic of Tanzania, put pen to paper to sign the treaty reviving the EAC. Again, to jog our memory, the EAC had earlier been established from 1967 and it collapsed 10 years later in 1977. The current EAC 20-year journey has been remarkable, the inevitable challenges notwithstanding. The framers of the Treaty establishing the EAC envisaged a community that would be anchored on four pillars. This is aptly captured in Article 5 where, the Partner States undertook “to establish among themselves, a Customs Union, a Common Market, subsequently a Monetary Union and ultimately a Political Federation”. The Partner States have signed and ratified three protocols in line with these pillars. Implementation of these protocols is at various stages with a commendable degree of success. The pillars are very crucial forerunners to the ultimate goal of Political Federation. Thus, in 2017, the EAC heads of state agreed on Political Confederation as a transitional model to full East African Political Federation. All the Partner States have, accordingly, nominated experts and set up a team that is currently working on the confederation constitution. Uganda’s former Chief Justice Benjamin Odoki and Makerere University’s Prof Murindwa Rutanga are part of this team. When asked...

President Kagame and Chairperson of the East African Community (EAC) has said that the implementation of the new African free trade area is an important step forward towards the unification of Africa. He was speaking at the 12th Extraordinary Summit of the African Union on Sunday in Niamey capital of Niger where he joined other Heads of State and Government from across the continent to launch the operational phase of the African Continental Free Trade Area (AfCFTA). He thanked Niger’s President Mahamadou Issoufou for the role that his country and him have played in signing the free trade area pact and hosting the participants in Niger to launch it. “History will record the central role played by the President of Niger, Mahamadou Issoufou, in bringing us to this point. Our task now is to finalise the remaining negotiations and operational instruments in a timely manner,” he said. Also discussed at the summit were key issues including the removal of non-tariff barriers and regulations controlling trade liberalization, rules of origin and the development of a digital payment system. Meanwhile, Nigeria honored the promise it had made earlier on Tuesday by signing up to the pact. President Muhammadu Buhari noted that free trade must also be fair trade. “As African leaders, our attention should now focus on implementing the AfCFTA in a way that develops our economies and creates jobs for our young, dynamic and hardworking population,” he said. Gabon and Equatorial Guinea have also joined making the number of countries that...

The African Union expects the single market to boost trade among the 52 out of 55 member states who have signed the pact. The leaders are rooting for removal of intra-trade fragmentation among African Countries to attract small- and large-scale investments. Sunday in Niamey, Niger 52 out of 53 countries signed the AfCFTA agreement and according to AU the free trade pact will rally all the African people to promote the regional economic growth. The leaders are banking on the AfCFTA to create customs unions that will attract investors boosting the already existing eight regional economic blocs half of which have customs unions. The Sunday meeting saw Nigeria and Benin joined the list of signatories, leaving Eritrea as the only member of the African Union that have not signed into the historic accord. Niamey has become the trade zone headquarters for the AfCFTA while Ghana is the secretariat of the trade zone. The trade deal came into force on May 30, after the deposit of the required minimum 22 instruments of ratification by AU member states to the AU Commission. Now a total of 27 countries have deposited their AfCFTA ratification to the AU Commission after five more instruments of ratification including Gabon and the Equatorial Guinea deposited theirs on Sunday. The Chairperson of the African Union Commission said July 7th will be officially celebrated as the Day of African Integration. “July 7 from now on will be officially celebrated as the Day of African Integration in commemoration of today’s historic...

Unctad’s Secretary-General Mukhisa Kituyi spoke with JAMES ANYANZWA about the benefits and potential pitfalls of implementing the AfCFTA. July 7 marks the launch of the $3 trillion African Continental Free Trade Area (AfCFTA). Is it time to pop the champagne? I would advise cautious optimism. The entry into force of the agreement establishing the AfCFTA is a landmark achievement after months of technical work and negotiations, and it should be celebrated. However, some critical issues (notably on tariff schedules and rules of origin) still remain.   The single African market is a great thing, but do you think its implementation will be smooth, given that regional economic blocs have been bogged down by trade disputes and poor implementation of Common Market protocols? It is unlikely that the implementation of an agreement of such breadth and depth will be smooth across the board. Challenges are bound to emerge. As a matter of fact, some have already surfaced in the course of negotiations and are being dealt with. What is important, however, is the need to step up to the challenge and harness the regional market for Africa’s structural transformation. But Africa is not starting from scratch. The experience and lessons learnt in the regional economic communities (RECs) can be leveraged to make the AfCFTA implementation smoother and more effective. One of the key advantages of a bloc like this is job creation. Is there a chance for job seekers from small economies to get employed in the more developed economies? Like many trade agreements,...

The African Continental Free Trade was launched yesterday at the 12th Extraordinary Summit of the African Union in Niamey, Niger. President Paul Kagame described the launch of the operational phase of the African Continental Free Trade Area as a significant milestone for the continent and the African Union. President Kagame said Rwanda was in full agreement of the report by Niger’s President Mahamadou Issoufou on the way forward on the agreement. Among the proposals in the report include catering for the interest of small-to-medium cross-border traders by simplifying trade regimes applicable to them. “We particularly concur on two points. One, the need to cater for small-to-medium cross-border traders, by simplifying trade regimes applicable to them,” he said. Kagame also endorsed the decision to commence trading under the AfCFTA on July 1, 2020. At the summit, the Executive Council designated Ghana as the choice to host the AfCFTA Secretariat. “I agree with the proposal of the Executive Council designating Ghana as our choice to host the AfCFTA Secretariat. I congratulate them as well,” Kagame said. Following the launch of the agreement and in the build-up to implementation, Kagame called on stakeholders to finalise remaining negotiations and operational instruments. “Our task now is to finalise the remaining negotiations and operational instruments in a timely manner,” he said. Among the ongoing negotiations includes Rules of Origin which will determine the eligibility of goods to be traded under CFTA as well as modalities such as protection of infant industries. At the summit, a number...

The President said through open trade and enhanced people-to-people interactions, the region will be able to deal with the challenges facing its people including poverty. “We must aim to remove all barriers that hinder the free movement of our people across our borders,” President Kenyatta said adding that East Africans are one people with a shared heritage and a common destiny. President Kenyatta spoke when he addressed thousands of Chato town residents in Northern Tanzania who gathered to welcome him during the start of his two-day private visit of the region at the invitation of President John Pombe Magufuli. He cautioned political leaders against making inflammatory remarks saying no one will be allowed to sow seeds of division among East Africans. “How can you tell a Tanzanian not to visit Kenya. You cannot deny Kenyans a chance to do business in Tanzania,” the President said. President Magufuli thanked President Kenyatta for the private visit saying he was honoured to host the Kenyan leader in his home village. He said President Kenyatta has made history for being the first Head of State to visit Chato which is a township in the Geita region. Speaking on the growing trade between the two neighboring nations, President Magufuli said Kenyans own 504 companies in his country worth 1.7 billion US dollars compared to 24 Tanzanian companies in Kenya worth 189 million US dollars. “According to the Kenya Tourism Board, in 2018, Tanzanian tourists visiting Kenya were 222,216 accounting for 10 percent of the over...

African nations are headed for another round of tough negotiations as they seek common rules for their newly formed free trade area even after they settled the headquarters question on Friday. To achieve its goal of boosting intra-regional trade, the African Continental Free Trade Area (AfCFTA) must craft rules of origin (RoO) that encourage imports from members while slowing orders from outside the bloc. A committee of experts is currently working on RoOs to be applied by all the AfCFTA signatories in a move set to test old commercial ties with French and English speaking European countries. “We expect this to be an area for some tough negotiations,” said Chris Onyango, a consultant with the United Nation Conference on Trade and Development (UNCTAD). “But there is a starting point as all the regional economic blocs in the continent already have RoOs which the committee may decide just to harmonise.” The Common Market for East and Southern Africa – where Kenya and most of its East African neighbours belong – for instance has its own RoO. The RoOs only permit goods that are either fully produced within the member states or imports with local value addition accounting for at least 35 per cent of the ex-factory cost. Other regional blocs are the Economic Community of West African State (Ecowas) and the Gaborone-headquartered Southern African Development Community. "If successfully implemented, AfCFTA could generate a combined consumer and business spending of $6.7 trillion by 2030, accelerate, expand economic diversification and facilitate job creation...

The port, dubbed Tangier MED, that is in the city of Tangier, is now bigger than other African giant ports — Port Said in Egypt and Durban in South Africa. The port was launched by Crown Prince Moulay Hassan on behalf of His Majesty King Mohammed VI. “We want to establish a business hub and build a network of global trade routes that link Africa to the rest of the world for everyone’s economic benefit,” said Mehdi Tazi Riffi, the port’s general manager. It has the capacity to handle 9 million containers, 3 million passengers, 700,000 trucks and 1 million vehicles. Other than transport logistics, Tangier MED is an industrial platform for more than 900 companies, representing an annual business volume of Sh830 billion. The project was completed at a cost of Sh80 billion through a Public-Private-Partnership (PPP). It presents a good example for African big infrastructure projects, including the Lamu Port that is projected to cost Sh500 billion. According to the Lapsset Corridor Executive Director Silvester Kasuku, Kenya is working closely with the Tangier Port management because the ports’ models are very similar. “We are looking at the best practices from Tangier MED Port and we are focusing on the networking prospects as we encourage inter-Africa trade that will help our people grow economically,” said Mr Kasuku. Using the latest technology, and boasting a workforce of 5,000, the port is a hub of efficiency. It is served by the newly built 345-kilometre speed train that links Casablanca to Tangier....