When the European Union (EU) and the United States of America (US) announced their collaboration by signing a joint communique in September 2023 to construct Africa's inaugural transcontinental Lubito trade corridor, it symbolised a pivotal moment in Africa's economic journey. Should this venture succeed, it will span the mineral-rich Angola, the Democratic Republic of Congo (DRC), and Zambia. The region's strategic significance extends to the supply of other critical minerals such as lithium, copper, manganese and coltan. The new infrastructure is poised to play a pivotal role in collecting these minerals, which are crucial for producing electric vehicles, wind turbines, and computers. Thus, transforming it into a robust regional economic community comprising 16 Member States, it also promises to revolutionise the entire Southern African Development Community (SADC) region, calling for a clear strategy that can be used to support the local value additions. Reflecting on the growing desire among African countries, particularly those rich in raw materials, to move away from traditional exports and foster local job creation, the project holds the potential to transform the Southern African Development Community (SADC) into a robust economic hub and foster regional competitiveness. As the corridor unfolds, its broader implications for harmonising regulations and propelling the Africa Continental Free Trade Area (AfCFTA) also underscores the importance of a comprehensive continental infrastructure roadmap. Currently, Africa stands at a crossroads, and with strategic partnerships and inclusive development, it can redefine its narrative, offering a brighter future for its youth and becoming a global exemplar of...

Non-tariff barriers (NTBs) remain a key challenge to intra-African trade even after the launch of the African Continental Free Trade Area Agreement (AfCTA), experts have warned. Speaking during the fourth World Transport Congress which was held in Nairobi last week, players in the shipping and logistics industry said without tackling the commercial challenges posed by NTBs, the AfCTA dream will never be realised. NTBs include quotas, embargoes, sanctions, discriminatory levies among others. AfCTA aims to accelerate intra-African trade and boost Africa’s trading position in the global market. The forum also highlighted how the shipping industry is embracing technology and the role of transport and logistics service providers in promoting green shipping. George Kidenda, a shipping and logistics analyst in Nairobi, said in efforts to increase free trade, African governments must aim to reduce up to 97 per cent of taxes. “We need proper infrastructure and free transportation of goods to achieve this. Most of our roads are not passable. Our airlines do not have free landing rights,” Kidenda said. “We also lack internet connectivity.” Head of Kenya Airways cargo business division Peter Musola, while speaking at the meeting, emphasised the need for trade liberalisation in Africa. “One of the biggest challenges in Africa is the issue of mutual demand. Airplanes or cargo ships will go in one direction full and return empty and this has the effect of increasing the price of goods. Trade liberalisation will stimulate domestic trade. The price will drop,” Musola said. According to the 2021 UNCTAD...

The recent admission of Somalia into the East African Community (EAC) has brought to the forefront the complexities and challenges associated with trade within this regional bloc. Despite the opportunities that come with Somalia’s inclusion, a new report underlines vital issues that need to be addressed for the EAC to fully benefit from the potential of regional trade. Challenges in Regulatory Compliance The report highlights the difficulty of navigating the different regulatory frameworks that member countries have in place. These disparities can create barriers and inefficiencies in trade, affecting the smooth flow of goods and services across borders. The economic disparities between member states, such as Somalia, with its ongoing conflict and vulnerabilities to climate change, and more stable countries like Kenya and Uganda, can lead to imbalances and tensions within the trading bloc. Infrastructure and Economic Disparities Infrastructural inadequacies, particularly in the road and rail networks, are another significant issue. Inconsistent and underdeveloped infrastructure can hamper the movement of goods, increase costs, and further widen the economic disparities between countries. The report emphasizes that for the EAC to truly thrive, there needs to be a concerted effort to address these inequalities and invest in robust infrastructure. The Path Forward The report suggests that harmonizing regulations can significantly reduce trade barriers and inefficiencies. It also stresses the need to address economic inequalities among member states. Investments in infrastructure, particularly in transport networks, are essential in facilitating the movement of goods and reducing costs. Additionally, the report mentions the potential benefits...

Non-tariff barriers (NTBs), a complex web of regulatory and procedural stumbling blocks, are mounting considerable challenges for businesses within East Africa. These barriers, stretching beyond conventional tariff measures, are stifling the free movement of goods and services, consequently escalating operational costs and hampering trade in the region. NTBs: Obstructing Aspirations of Regional Integration These hindrances are emerging as a formidable threat to the hopes of regional integration among East African nations. The pursuit of a unified market, with its promise of fostering economic growth and competitiveness, is being thwarted by NTBs. The business environment is complicated by these barriers, which discourage cross-border trade and deter potential investors. Impact on Economic Development The elimination or significant reduction of these barriers is viewed as crucial in realizing the envisioned level of integration. Such a level is expected to stimulate investments, bolster intra-regional trade, and spur economic development in East Africa. However, the persisting presence of NTBs poses a significant challenge to this ambitious blueprint. Climate Reality and Economic Disruption In parallel, the Middle East and Central Asia are grappling with a grim climate reality. The regions are witnessing temperatures rising at double the global average, along with increasingly unpredictable and scarce rainfall. These adverse climate conditions are poised to exacerbate existing conflicts and disproportionately affect fragile states. The economic disruption that ensues is set to intensify. Despite the challenging climate situation, many countries within these regions are initiating measures to mitigate the impacts of climate change. Nevertheless, the need for more ambitious...

Leaders and experts from various sectors and regions shared their insights and experiences about the role of transport infrastructure in transforming the continent at the Africa Investment Forum (AIF), an annual business gathering that aims to raise funding for infrastructure and other projects in Africa. Participants gave examples of how transport infrastructure, such as roads, railways, ports and airports, can foster trade, integration, and growth in Africa. They generally agreed that Africa still has a huge infrastructure gap that hinders its development, stressing the need to increase infrastructure financing through innovative solutions such as those promoted at the AIF. Participants heard that African countries have a dual challenge in developing their transport infrastructure: they must ensure efficient, safe, and affordable mobility for all, while reducing the environmental impact of that infrastructure. This is a complex and urgent challenge that requires innovative ways of managing risks and attracting capital, particularly from the more risk-averse private sector. Dr. Akinwumi Adesina, President of the African Development Bank (AfDB), noted that AIF brings together world-class financiers that have the ability to use innovative financing instruments and mechanisms – such as pooled financing facilities, blended finance, and guarantees – to lower risks and increase returns. He called for significant investments to build better roads, bridges and ports, noting that the AfDB was leading the way in championing big ticket investments in transport infrastructure across the continent. “As of 2022, the African Development Bank had financed 25 transport corridors, constructed over 18,000 kilometres of roads, 27...

The 16 members of the Southern African Development Community (SADC) are exploring ways to further integrate their diverse economies and strengthen regional value chains. With a combined population of nearly 270 million people and $700 billion in GDP, the SADC bloc represents enormous potential for increased growth and development if member states can enhance economic cooperation and trade. By removing barriers to cross-border commerce, SADC aims to give regional firms access to wider markets, promote competition, facilitate investment flows, and develop joint manufacturing capacities. The current landscape is fragmented, with intra-SADC exports accounting for only 22% of total trade as of 2020. Deeper integration promises to unlock new industrial growth poles while expanding opportunities for resource-linked and agricultural exports within the bloc. Key initiatives aim to reduce tariffs and streamline cross-border trading procedures. The SADC Free Trade Area, enacted in 2008, eliminated tariffs on 85% of goods traded within the bloc. Further progress on the remaining 15% of sensitive items and reducing non-tariff barriers will help companies benefit from regional market access. The Regional Indicative Strategic Development Plan 2020-30 targets lifting intra-regional trade to 40% of total trade by 2030. Harmonizing regulatory standards and product requirements across SADC members can also make trading simpler for regional firms. Streamlining cumbersome border procedures, documentation and customs clearance processes through digitalization and one-stop border posts can bring down transaction costs. Ambitious proposals like the SADC Customs Union aim to eliminate duties on imports from outside the region. A unified approach to external tariffs...

The African Continental Free Trade Area (AfCFTA) represents a historic opportunity to boost intra-regional commerce, reduce poverty, and spur Africa’s economic transformation. The World Bank estimates that AfCFTA could lift over 50 million people out of extreme poverty and raise incomes by nine per cent once fully implemented. However, realising these gains will require expanding access to financing and investment to energise trade and engage all Africans in the AfCFTA’s success. To achieve this, it is imperative to recognise that countries do not trade; people do. Therefore, there exists an urgent need to create viable avenues for trade financing that can empower individuals, entrepreneurs and businesses across the continent. The AfCFTA represents a historic opportunity to foster economic integration and create a single market for goods and services across Africa. However, the success of this ambitious initiative relies on the active participation of a multitude of actors, from small and medium enterprises to established businesses, and from rural farmers to urban entrepreneurs. Recognising that these diverse players are the true agents of trade, it becomes evident that facilitating their involvement requires a targeted approach to address the financial barriers they face. Bridging the trade finance gap A persistent challenge for African traders is limited access to the affordable financing needed for cross-border transactions and supply chain operations. The trade finance gap for Africa is estimated at over $100 billion annually. Boosting financing from both public and private sources is imperative to enable businesses of all sizes to engage in the...

The Governments of Zambia and DRC has signed a bilateral agreement to implement and operationalise the Chalwe-Kabila One Stop Border post (OSBP)  The post is under development by GED Africa, an investment and project management company, and is part of the Kasomeno-Mwenda Toll Road Project (KMTR). The wider infrastructure project, sponsored by The Duna Group, consists of the modernisation, construction and expansion of 184 km of road highway, the construction of a 345 m cable-stayed bridge over the border at the Luapala River; construction of a one-stop border post with accompanying warehousing and parking facilities; delivery of a tolling system and associated infrastructure; and social infrastructure. The OSBP agreement was signed by the DRC’s minister of infrastructure and public works, Alexis Gizaro Muvuni and Zambia’s minister of commerce, trade and industry, Chipoka Mulenga.  At the ceremony, Mulenga commented, “We are here today as a demonstration of this Government’s determination to use commerce and trade to stimulate economic growth for improved livelihoods for all our people.” With this now in place, the joint steering committees are able to turn their attentions to developing the operations manual, complete with detailed policies and procedures for implementation. When finally delivered, the post will bring expeditious and standardised border controls that will reduce trade stops, transport costs and transit times. Klaus Findt, CEO of GED Africa, remarked, “In tandem with the monumental bilateral agreement, the successful finalisation of both the Zambian and DRC Private Policing Services Agreements underscores our dedication to upholding traffic laws and ensuring safety and security along...

Determined to boost trade in the continent, the African Shipowners Association has concluded plans to establish African Shipping Lines in the first quarter of 2024. The Secretary General of the African Shipowners Association, Funmi Folorunsho, disclosed this at the just-concluded 43rd Annual Council meeting of the Port Management Association of West and Central Africa in Lagos. Folorunsho said that the move would enhance maritime transportation and boost intra-African trade. She said the strategic initiative aligned with the African Continental Free Trade Area Agreement’s objectives of fostering economic growth and logistical efficiency throughout the continent. Folorunsho outlined the comprehensive blueprint for the Africa Shipping Line, emphasising the need for a robust fleet. The African Shipowners scribe revealed the targets, which included a 188 per cent increase in bulk vessels, and a planned 180 per cent surge in container vessels. “This expansion aims to accommodate the anticipated surge in maritime transport volume, projected to soar from nearly 58 million to 131.5 million tonnes,” she said. Speaking on the mechanism for financing the project, she said it included tapping into funds generated through the AfCFTA African Cargo for Africa Ships programme. According to Folorunsho, this includes engaging the private sector, collaborating with the African Export-Import Bank, and exploring partnerships with existing shipping lines in Africa. She further underscored the broader impact of the proposed Africa Shipping Line on economic and logistical fronts. She noted that in 2019, 65 seaports were connected by 142 links, accounting for 22.1 per cent of intra-Africa freight transport...

Africa’s significant road infrastructure deficit creates increased production and transaction costs that must be addressed to scale opportunities envisaged under the Africa Continental Free Trade Area, a new report has found. The report, called Cross-Border Road Corridors Expanding Market Access in Africa and Nurturing Continental Integration notes that while roads are the primary mode of transport, carrying 80 percent of goods and 90 percent of passenger traffic, only 43 percent of Africa’s main population have access to an all-season road. “Just 53 percent of roads on the continent are paved, isolating people from access to basic services, including healthcare, education, trade hubs and economic opportunities,” according to the publication, released at a special session of the Africa Investment Forum 2023 Market Days taking place in Marrakech, Morocco. The session, titled Regional Corridors: Quest to Integrate Africa, featured a panel discussion on the strategic importance of regional corridors in connecting Africa. Panelists included government representatives, regional economic communities, development partners and private sector service providers. Opening the session, African Development Bank President, Dr Akinwumi A. Adesina urged collaborative efforts to fast-track the integration of African economies, lower transport costs, connect landlocked countries to coastal countries, and improve regional trade and competitiveness. “That is the Africa we want: a fully interconnected Africa, using regional corridor infrastructure and innovative regional financing instruments, to unleash economic opportunities and assure competitiveness of national and regional value chains. A well-connected Africa will be a more competitive Africa.” He intimated that the Africa Investment Forum will dedicate...