Africa has long been a complex market for many global businesses. Trade and commerce have been fragmented across its 54 countries, with currencies, consumer insights and regulations specific to each. At the local level, consumers have often bought and sold things in open air markets, with cash or even barter of mobile phone minutes. But a recent pan-African trade deal has begun to streamline the African market, and technologies are giving consumers and businesses new on-ramps. The result? The continent and its 1.5 billion are more accessible than ever. Aubrey Hruby has advised companies in and out of Africa for the past two decades and is a senior fellow at the Africa Center at The Atlantic Council, a member of the Council on Foreign Relations and the co-author of an award-winning book, The Next Africa. In this month’s Signal Conversation, Hruby shared insights on how commerce is evolving and the many opportunities for businesses to engage in what is now the world’s fastest growing region. Transcript John Battelle Welcome to another Signal Conversation. I’m very excited about this one. We have with us Aubrey Hruby, who is an advisor to companies with interest in African markets, working mainly with African policymakers and Fortune 500 companies across 20 distinct African markets. She’s a senior fellow at the Africa Center at The Atlantic Council, a member of the Council on Foreign Relations and the co-author of an award-winning book The Next Africa. Welcome, Aubrey. So good to have you here. Aubrey Hruby Thank you, John....

With the Covid-induced recession subsiding as vaccination rates increase, there was great hope for the AfCFTA to show that it could live up to its hype. So, what has worked? Since trading began on 1 January, some intra-African trade under AfCFTA arrangements based on anecdotal evidence has taken place, including alcoholic beverages and cosmetic products (recent data on trade flows are not yet fully available). Although intra-African agricultural trade remains below 20% compared to more than 60% for Europe and Asia, trade is projected to grow once negotiations have come to an end and trade barriers are progressively rolled back. To date, 42 out of 55 African countries have ratified the agreement, and 88% of the negotiations on product-specific rules of origin have been concluded, covering more than 70% of intra-African trade according to the AfCFTA Secretariat in 2021. However, a significant shortcoming of the agreement is that many nutrition-sensitive goods may not be fully liberalised or progressively liberalised over longer periods, as indicated by ongoing negotiations on tariff offers. Examples of protected goods include live animals, meat, fish, milk and dairy products, fruit and vegetables, coffee, tea, spices, oilseeds and sugars. Africa’s agricultural commodities and raw materials have traditionally dominated trade with the rest of the world (cocoa, coffee, cotton, tobacco and spices) with a mix of processed goods (cane and beet sugar, prepared or preserved tunas, wine and other food preparations). For the AfCFTA to reach its full potential by exploiting the full range of the agri-food value...

The African Continental Free Trade Area (AfCFTA) is expected to increase intra-African trade in transport services by nearly 50 percent, according to the latest estimate by the UN Economic Commission for Africa (UNECA). The UNECA, noting that Africa’s transport sector is set to strongly benefit from AfCFTA, said in a statement sent to Xinhua Friday that a recent estimate entitled the “Implications of the AfCFTA for demand for transport, infrastructure and services” indicated that with AfCFTA in absolute terms, more than 25 percent of intra-African trade gains in services would go to transport alone; and nearly 40 percent of the increase in Africa’s services production would be in transport The study conducted by experts in the Energy, Infrastructure and Services Section of UNECA unpacks AfCFTA investment opportunities in the transport sector. According to the findings, AfCFTA requires 1,844,000 trucks for bulk cargo and 248,000 trucks for container cargo by 2030. This increases to 1,945,000 and 268,000 trucks, respectively, if planned infrastructure projects are also implemented. The largest demand for trucks to support AfCFTA is within West Africa at 39 percent; demand from West to Southern Africa is 19.8 percent and from Southern Africa to Western Africa by 9.9 percent. UN Under-Secretary-General and Executive Secretary of UNECA Vera Songwe said the AfCFTA is “expected to significantly increase traffic flows on all transport modes – road, rail, maritime, and air,” but that such gains will only be optimized if the AfCFTA is accompanied by the implementation of regional infrastructure projects. On the...

For many smallholder farmers, growing coffee has become a risky business. Plagued by low profitability, high risk and the effects of a changing climate, many farmers struggle to make a profit and earn a living income. With limited access to financing, they are also unable to invest in adaptations that would help overcome these challenges and raise their productivity. As smallholders account for 80% of global coffee production, the constraints they face add up to a significant and direct threat to the entire coffee industry. To address these challenges, Tropical Farm Management Kenya and Becamo in Honduras – both part of Neumann Gruppe GmbH, a green coffee service group with over 50 companies in 26 countries – have collaborated with Feed the Future Partnering for Innovation, a U.S. Agency for International Development (USAID)-funded program implemented by Fintrac Inc., to make coffee a better business for smallholder farmers and the coffee industry as a whole. With support from Partnering for Innovation, the company is tackling these challenges head-on through NKG Bloom, a global initiative that aims to build a sustainable coffee supply chain by providing farmers with critical opportunities and resources to grow and adapt. THE CHALLENGES FACING COFFEE PRODUCTION Rapidly changing prices, adverse weather conditions, pests and disease — these shocks and stressors can quickly undo the promise of a successful coffee growing season and severely diminish smallholders’ income and food security. Climate change has worsened many of these challenges, leading to unpredictable weather conditions, from shifting rain patterns to flooding and droughts, and spurring more frequent incidences of pests and...

Trade between Kenya and Tanzania for the year ending November 2021 hit $905.5 million (Sh103 billion) last year according to Central Bank of Kenya (CBK) data. Imports from Tanzania also stood at $501 million while exports hit $403.9 in what has been attributed to resolutions on non-tariff barriers by presidents of Tanzania and Kenya. The two countries have recently mended fences to eliminate barriers hindering the smooth flow of trade and people between along the busy corridor and particularly on the Namanga border. EAC market The most recent spat was in August 2021 when Tanzania government banned Kenyan airlines from its airspace after Nairobi announced passengers from the EAC market would not be allowed to enter Kenya. “Kenya and Tanzania have strong trade ties and the ministry is setting up a Jumuiya Market near the border of Namanga to support cross-border trade. Cross-border trades shall have a stall at the Jumuia Market,” said Irene Musebe from the Ministry of East African Community during an EABC trade facilitation forum at Namanga One-Stop Border Post. Data from the border post shows that trade has improved to 250 trucks compared to 70 trucks in May last year. The two countries signed eight bilateral pacts which included agreements on mutual legal assistance, as memoranda of understanding (MOUs) on immigration, correctional services and animal health. Kenya National Bureau of Statistics (KNBS) data says imports from Tanzania grew from Sh10.8 billion ($96.2 million) to Sh20.5 billion ($182.6 million) as of November last year, with Tanzania’s biggest...

The Africa Continental Free Trade Area (AfCFTA) Secretariat and African Export-Import Bank (Afreximbank) have signed a fund management agreement to raise funding support for party states and commercial entities in the area of trade. As indicated by the secretariat, the estimated fund requirement for uninterrupted implementation of the AfCFTA agreement and to eliminate the adjustment cost is about US$10 billion over the next six years, and this agreement is to help raise funding in that regard. Speaking at the agreement-signing ceremony, Secretary-General, AfCFTA, Wamkele Mene, stated that the secretariat will not be going to World Bank or International Monetary Fund (IMF) for funding support but will depend solely on indigenous funding firms to raise the required amount to successfully implement AfCFTA. “We as Africans cannot continue to go to the World Bank, IMF, and others to finance our own trade as a continent. So, I will rather go cup in hand to Afreximbank, Trade and Development Bank, then go to the others in Europe and other parts of the world for support. We are not going to succeed in the implementation of this trade agreement without Afreximbank. This Adjustment Fund is being introduced because we know that as member countries are implementing tariff adjustment mechanisms, there would be some revenue loses in the short term and we want to ensure that their interest is accommodated. This is where the Afreximbank comes in as the pillar of implementation of AfCFTA by providing this facility of US$1billion, to make sure that we...

Originally published in the World Economic Forum Blog on 13 January 2022. 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 advancement in 132 countries, 21 out of the 32 countries in the bottom quartile are LDCs. Of the 22 LDCs ranked altogether, only one (Tanzania) is in the second quartile....

These include visual and performing arts, crafts, cultural festivals, photography, music, dance, film, fashion, video games, digital animation, publishing, architecture, and more. Africa’s Free Trade Area (AfCFTA) is expected to be a boon for the creative sector and generate jobs for the youth. On 1 January 2021, trading under the African Continental Free Trade Area (AfCFTA) kicked off. The trade pact, which seeks to create a single market for goods and services and promote cross-border movement of capital and people, should boost intra-African trade — currently at only 18 per cent—and regional integration. It is also expected to be a boon for the creative sector. Key players in the creatives industry said as much when they met in Kigali, Rwanda, in 2019, even before the trade area launched. “We wanted to deconstruct the AfCFTA,” said Josh Nyapimbi, Executive Director of Nhimbe Trust, a pan-African creative civil society organization based in Zimbabwe, adding that the creative and cultural industries can “leverage the agreement to advance our economies.” Similarly, Wamkele Mene, the Secretary-General of the AfCFTA Secretariat, has emphasized the need for youth involvement in cross-border trade through the creative industry and technology. He says that the active participation of young people in the free trade area could boost jobs creation and catalyze economic development. Africa’s creative sector is diverse and includes visual and performing arts, crafts, cultural festivals, paintings, sculptures, photography, publishing, music, dance, film, radio, design, fashion, video games, digital animation, architecture, and advertising, according to the UN Conference on...

Plans to decongest Kenya-Uganda border gears up – Commissioner THE East African Business Council (EABC) has been assured that the backlog of trucks at Malaba One-Stop-Border Post (OSBP) will be cleared and normalcy has been return by yesterday (Wednesday). Uganda Revenue Authority Commissioner of Customs, Abel Kagumire made the assurance when speaking at the EABC-TMA public-private dialogue at Malaba OSBP. He stated that the backlog of 4000 trucks has been reduced to 2500 trucks and the traffic queue has been reduced from 40KM to 25KMs following the implementation of the resolutions for the bilateral meeting between the Ministers of Works and Transport of the Republics of Uganda and Kenya held on Saturday. EABC CEO John Bosco Kalisa said: “In future solution to NTBs should be derived without waiting for Ministerial and Head of State decisions.” He called for the formation of Responsive Border Committee to quickly resolve future trade bottlenecks and NTBs to reduce the cost of doing border-crossing trade. The EABC boss also called for a borderless East Africa for free flow of cargo. He further urged for closer collaboration among transporters, importers, exporters, cross-border traders, customs, immigration and other trade facilitation agencies on both sides of Uganda and Kenya. Matia Etedu from the Ministry of EAC Affairs Uganda appreciated and called more public private dialogue to facilitate cross border trade in region and beyond as the EAC bloc will soon commence trading under African Continental Free Trade Area. Charles Omusana, Principal Economist (Investment & Private Sector Promotion), EAC...

Summary First, Africa expects its leaders to take urgent action to speed-up access to Covid-19 vaccines, while also ensuring that health remains a permanent priority after the pandemic. Recent outbreaks of new Covid-19 variants reinforce just how interconnected the world is and why it is crucial to ensure everybody is vaccinated: a fresh breakout anywhere is a threat everywhere and no-one is safe until everyone is safe. The second priority for the AU Summit is to chart a roadmap for a resilient economic recovery post-Covid-19. The IMF estimates that Africa needs additional financing of $285 billion through 2025 just to respond to the pandemic, and at least $500 billion to get back on track to pre-Covid-19 levels of economic performance. As the African Union marks its 20th anniversary this year, there are three priorities that must top the agenda of leaders meeting at the Heads of State Summit in Addis Ababa in early February. First, Africa expects its leaders to take urgent action to speed-up access to Covid-19 vaccines, while also ensuring that health remains a permanent priority after the pandemic. The latest data shows that less than 11 percent of Africa’s 1.2 billion people have been fully vaccinated. In contrast, nearly 72 percent of high-income countries have been fully vaccinated and wealthier nations are now doling out booster shots and stockpiling vaccines for future use while Africa struggles to provide first and second doses to a fraction of the population. Recent outbreaks of new Covid-19 variants reinforce just how...