The East African Community (EAC) stands to benefit from the recently unveiled African free trade area if it consolidates its internal market, according to the East African Business Council (EABC). “Failure to remove trade impediments means that our bloc will remain weakened,” EABC executive director Lillian Awinja said last week. She told regional press that the African Continental Free Trade Area (CFTA) unveiled in Kigali last week could pull some EAC states into the new pact at the expense of their trade relations. “This means the benefits going elsewhere...to the rest of African market instead of our internal market,” she said on the sidelines of a regional workshop on trade between EAC and the outside world. CFTA was launched by leaders of the African Union (AU) member states in Kigali on March 21, and the continental body hopes that it will be the world’s largest single market with a cumulative GDP of $3.4 trillion. Leaders from some 44 African countries out of 55 signed up for the trade deal while more others committed to the deal through assenting to the Kigali Declaration. The milestone agreement is seen as a key part of AU’s long-term development plan, Agenda 2063, which calls for easing of trade and travel across the continent. The pact came in the wake of advanced talks on a tripartite trade area comprising the EAC, Common Market for Eastern and Southern Africa (Comesa) and South African Development Community (Sadc), constituting more than 60 per cent of Africa’s GDP and...

A free trade agreement across Africa is "great in principle," Matthew Parks, parliamentary deputy co-ordinator for the Congress of South African Trade Unions (COSATU), told CNBC via telephone Tuesday. COSATU represents more than 2 million workers in South Africa. Attending a summit in Kigali, Rwanda, last week, South Africa's President Cyril Ramaphosa did not immediately sign the African Union's proposed free trade agreement. The agreement posits a free trade area between its 55 member states. Safeguarding jobs and cheap Chinese goods flooding the market are hurdles the South African government must clear before it signs up to a pan-African free trade agreement, the country's largest trade union group told CNBC. A free trade agreement across Africa is "great in principle," Matthew Parks, parliamentary deputy co-ordinator for the Congress of South African Trade Unions (COSATU), told CNBC via telephone Tuesday. COSATU represents more than 2 million workers in South Africa. But, "we need to see some kind of plan," he added. Attending a summit in Kigali, Rwanda, last week, South Africa's President Cyril Ramaphosa did not immediately sign the African Union's proposed free trade agreement, which posits a free trade area between its 55 member states. Ramaphosa instead signed the Kigali Declaration, a precursor to the deal. "We are part of this process of opening up Africa for trade. All that is holding us back from signing the actual agreement is our own consultation process," Ramaphosa was quoted as saying by South African broadcaster eNCA. Forty-four African nations signed on to...

The East African Community is set for logo change in a move aimed at accommodating new members and creating harmony among various organs within the body. The exercise which is expected to conclude in November saw youths from member states invited to submit different designs for consideration. It got 485 different designs from the youths aged between 18-35 years. “We have narrowed down to ten applicants and expect to forward the top three to the council of ministers for approval in an exercise we expect to come to conclude before the end of this year,” said Jesca Eriyo, EAC deputy secretary general. “Rebranding is important to enable the East Africa Community have a simple logo that can also be easily adopted in other organs of the body,” she said noting that the current logo has so many colours that needs to be replaced to also accommodate new entrants in the union. The East African Community launched the rebranding competition in 2017 targeting to change its visual brand identity for eleven Organs and Institutions including the regional parliament and the court. The council of ministers will consider the report of the top entrants in April 2018, where 438 proposed designs have been considered by regional brand experts. The Rebranding process targets to resolve among others the lack of a unique common identifier among the EAC Organs and Institutions, too many colours being used for the flag and logos, the EAC logo not being adaptable to the expansion of the community, two...

African leaders have just signed a framework establishing the African Continental Free Trade Area, the largest free trade agreement since the creation of the World Trade Organisation. The free trade area aims to create a single market for goods and services in Africa. By 2030 the market size is expected to include 1.7 billion people with over USD$ 6.7 trillion of cumulative consumer and business spending – that’s if all African countries have joined the free trade area by then. Ten countries, including Nigeria, have yet to sign up. The goal is to create a single continental market for goods and services, with free movement of business persons and investments. The agreement has the potential to deliver a great deal for countries on the continent. The hope is that the trade deal will trigger a virtuous cycle of more intra African trade, which in turn will drive the structural transformation of economies – the transition from low productivity and labour intensive activities to higher productivity and skills intensive industrial and service activities – which in turn will produce better paid jobs and make an impact on poverty. But signing the agreement is only the beginning. For it to come into force, 22 countries must ratify it. Their national legislative bodies must approve and sanction the framework formally, showing full commitment to its implementation. Niger President Issoufou Mahamadou, who has been championing the process, aims to have the ratification process completed by January 2019. Cause and effect Some studies have shown...

With no shortage of shocking headlines in the past few weeks, it’s understandable that many Canadians might’ve missed that the Trudeau government launched free trade negotiations with the world’s fifth largest economic market — one with over 270 million people and a GDP of more than $3 trillion dollars. In fact, they can even be forgiven for not knowing it by name:  Mercosur. Mercosur is the world’s fourth largest trading bloc, comprised of some of the most important economies in South America: Brazil, Argentina, Paraguay, and Uruguay. Argentina and Brazil, in particular, are high-growth markets both rich in natural resources and home to expanding middle class populations.  They are so-called ‘emerging’ markets, not unlike Mexico, Nigeria, and South Africa. With the continued uncertainty around NAFTA, and the slow pace of talks with India and China, Mercosur represents a welcome addition to Canada’s trade diversification strategy.  To date, Mercosur has not signed a free trade agreement with any western economy. Interestingly, and perhaps surprisingly, it only has trade agreements in place with Israel, Egypt, Palestine, and Lebanon. The renewed Canadian interest in Mercosur is due in large part to Argentina’s pro-business President Mauricio Macri — currently the Chair of Mercosur. Macri was elected in late 2015, shortly after Prime Minister Justin Trudeau, and moved quickly to transform a country that had effectively languished under his more erratic and controversial predecessor Cristina Fernandez de Kirchner. Since Marci’s election, Argentina has taken steps to liberalize the economy by lifting capital controls, removing export...

It is a beehive of activity as livestock and other traders move back and forth loading tens of goats and sheep and other commodities onto a rickety boat at Ruganda ‘port’. The boat is headed for a journey across Lake Kivu to DR Congo. I am told the cross-border traders perform the ‘ritual’ twice a week during the two market days at Ruganda landing site in Bwishyura sector, Karongi District. It is obvious that this is risky journey as the small boats are not anything near safe nor do some of the travellers have life jackets. Besides being overloaded with livestock, charcoal, beer, cooking oil and chickens, traders and other passengers compete for space on the same boats. These challenges could, however, be history after a new project by government to revamp the water sector is implemented in the coming months. According to Rwanda Transport Development Agency (RTDA), the new marine system transport project will greatly improve water travel between the two countries and boost trade. Fabrice Barisanga, the RTDA manager for planning and research, said the first phase of Lake Kivu water transport project would start later this year. “The project that is set to be implemented in November this year will ease cross-border trade with DR Congo… and studies are ongoing for River Akagera navigability, which we hope will enable Rwanda’s marine transport system to connect to Lake Victoria,” he said. The first phase of the project, under the Ministry of Infrastructure, will cost $27.3 million (about RwfRwf23...

International trade has brought great benefits, but also inequities. By incorporating the philosophy of the SDGs into trade agreements, trade has the potential to benefit all. The value of world trade has nearly quintupled over the past 20 years from $5 trillion to about $24 trillion. Over the same period, trade has proved to be an excellent medium to leverage and promote economic growth, helping lift a billion people around the globe out of extreme and abject poverty. But in the last 10 years there has been a significant change in how international integration is perceived by the public and pursued in policymaking. As new middle classes have emerged in developing countries, middle-class prosperity in developed countries has found itself wavering. After the financial crisis of 2008, and especially in the last few years, the debate around the benefits of international trade has become much more fractious. One particularly contentious point is whether trade integration – establishing freer trade between countries – has resulted in inequitable economic growth, with some people and nations benefiting at the expense of others. Even the simplest classroom trade models acknowledge that trade benefits accrue unevenly. Trade integration can polarise the gap between the low and high skilled, suppress wage growth for workers facing overseas competition and create hardship and displacement for those who lose their jobs. As it happens, trade agreements are generally devised to reduce trade frictions across borders, while paying little attention to the distribution of the costs and benefits of trade...

Regional governments should move fast and expedite integration process to give the East African Community a competitive edge in proposed continental free trade zone, the East African Business Council (EABC) leaders have said. Last week, 44 African Heads of State and government officials signed the historic agreement which will enable the creation of the African Continental Free Trade Area (CFTA). The treaty, signed in Kagali on March 21, is expected to create largest trade bloc globally, with market share of almost $3.4 trillion and a population of over 1.2 billion people. However, EABC leaders say the slow implementation of projects expected to improve business climate in the region could put the region at a disadvantage when the treaty finally comes into force. This may leave the region behind if nothing is done to have the projects fast-tracked and late alone cost the region an opportunity to fully participate in the bigger “African market”. EABC vice-chairman and managing director Kigali Heights, Denis Karera, said full EAC integration will give the region competitive advantage, enabling it to benefit more from continental free trade zone. According to experts, the creation of African free trade area means regional blocs like EAC must find ways that will enable them to compete and benefit from the bigger market. Karera said delaying to ratify or implement some of the important regional treaties and projects could lender EAC almost non-player and irrelevant once CFTA comes to life. “The competition that comes up with CFTA can only be dealt...

The world's largest producer and consumer of peanut oil, China, which had a bad harvest in 2015, has since turned to Senegal, one of the few countries in the world not to consume all its production but also world's leading exporter of groundnuts. In 2015, the value of exports of this product in Senegal to Asia jumped from 1.7 to 30 billion CFA francs in 2017, according to the Ministry of Commerce, as per Afirmag. A vital sector for African economies Like Senegal, agricultural products are essential for trade in West Africa, for example. Their place in the various countries of this part of the continent remains globally important in terms of exports, whether for the different cash crops such as cocoa or cotton, but also in terms of imports: rice, wheat palm oil are essential to meet the needs of the people. Figures published by the World Trade Organization (WTO) show that, on average, for the twelve countries in the area where statistics are available, agricultural exports account for 23.5 percent of the total for this sector. This percentage varies greatly from one country to another. For Côte d'Ivoire, 69 percent is achieved; in contrast, for Nigeria, this contributes only four percent, or again, five percent for Guinea. According to Afirmag, for some countries, a product predominates widely. This is the case in Côte d'Ivoire (more than 50 percent for cocoa and more than 70 percent if cocoa by-products are added) or Benin, Burkina Faso and Mali for cotton (over 60 percent, 40 percent, and 70percent...

Public and private sector players should have a common approach that will help expedite the implementation of regional integration, thus drive the East African Community into a large market. Rwanda’s businessman, Denis Karera, the managing director of Kigali Heights, said a hormonised strategy is important, especially as the Africa prepares for the recently-endorsed continental free trade area. The deal to establish the Africa Continental Free Trade Area, of over 1.2 billion people, was signed on March 21 during the 10th African Union extraordinary summit in Kigali. Karera is also the current vice-chairman of EABC. Karera is was speaking during the inaugural East Africa Business Council (EABC) Excellence Awards 2018 in Nairobi, Kenya last week. The former EABC chairman, and another Rwanda businessman, Faustin Mbundu, the chairman MFK Group, were awarded for their exemplary leadership while leading the regional private sector umbrella body. Karera said the awards were a “great milestone toward building a united East African business community”. Other winners Local social enterprise that offers water solutions, Water Access Rwanda, scooped the Best East African Company award in SME category. Equity Group Holdings emerged overall winners, scooping the Chairman’s Award during a dinner held at the Kenyatta International Convention Centre, followed by Mabati Rolling Mills and Chandaria Industries based in Kenya. KCB Group was recognised as the Best East African Company in financial services, Bidco Africa won the manufacturing category, followed by Chandaria Industries and Mabati Rolling Mills, respectively. The awards recognise companies that have demonstrated exceptional business performance in...