The dream of achieving low airfare in Africa may soon be realised should the African Union’s plans run full course. The bloc expects to launch its Single African Air Transport Market at the end of this month in Ethiopia. According to the AU, 23 regional countries have committed to the cause that whose full implementation will see, among other benefits, the cost of air travel drop by more than 25 per cent. AU chairperson Moussa Faki Mahamat in his New Year message said SAATM will be launched on the margins of the African Union Summit to be held between January 22-29 this year. “Twenty-three member States have pledged their solemn commitment to the Single Air Market, the implementation of which will increase the number of routes, reduce the cost of air travel and contribute to the expansion of intra-African trade and tourism,” said Mr Mahamat in the statement. Efforts to have African countries open up a common airspace has been frustrated by States that want to protect their weak airlines from competition, raising debate on whether this will be achieved. Ministers of Infrastructure from Common Market for Eastern and Southern Africa (Comesa) in a report last year October said some countries have been reluctant to embrace full implementation of a seamless airspace as it will expose their airlines to stiff competition. “Implementation has been hampered by reluctance by States that claim to have weak airlines to embrace full implementation as their airlines cannot compete,” said the report in part. The...

Last month, from December 8-14, 2017, Rwanda celebrated its annual Green Growth Week. The week is part of the country’s efforts geared at achieving economic growth through sustainable resources utilisation as well as safeguarding the environment. Rwanda is one of countries, making consistent efforts in achieving green and sustainable economic growth. Green growth aims at fostering economic growth and development by ensuring that natural assets continue to provide the resources and environmental services on which economies well-being relies. Green economic growth is part of the country’s developmental policies and some of endeavours include ban on use of plastic bags, maintaining minimum forest cover of 30 per cent, green funds and green projects, and enacting of the green development policies, among others. Again, Rwanda is committed to green economic Transformation. Rwanda’s green growth and climate resilience strategy was launched in 2011 as one of steps towards sustainable economic growth and to address challenge of climatic change. Important components of this strategy are green fund and green projects financed by green fund. The country has established a national environment and climate fund for financing green projects. It has thus developed a well-designed pathway for achieving green growth through various policies. Globally all countries are required to adopt green economic growth strategy as a part of sustainable economic development and meet challenges of climatic change. Recently, the World Bank asserted on making green growth inclusive through three pronged pathway. Prong one relies on inclusive green growth strategies to maximise local benefits. The second...

Infrastructure is crucial to Africa’s growth prospects. But it’s also hard to get right. Until now, policy-makers have focused on improving access to finance. But a consensus is developing globally that a major factor hindering infrastructure implementation is a lack of good governance and well-planned projects. This makes it crucial for African countries should plan for infrastructure and develop governance frameworks that facilitate inclusive and sustainable investment decisions. There’s certainly no denying the need for infrastructure development on the continent, as has been emphasised during the course of Germany’s G20 Compact with Africa initiative. In sub-Saharan Africa, only 35 per cent of the population has access to electricity. Access to modern transport has declined in the region over the past 20 years, and 23 per cent of the population still lacks access to safe water. Against this background, it’s understandable that the investment focus over the past 10 years has been on utilities and trying to improve access to electricity and water. For some countries this is a significant challenge. Ethiopia, for example, needs to spend 20 per cent of its GDP to meet its electricity Sustainable Development Goals (SDGs) and another nearly seven per cent to meet its water SDGs. That’s a major chunk of its GDP, particularly when you compare that the average investment in all infrastructure in Latin America stands at about 5.5 per cent. Ethiopia is not unique and such cases point to a significant underinvestment in economic infrastructure such as ports, airports and roads across...

Kampala. The Board of Directors of the African Development Bank (AfDB) has approved the Bank’s 2018 borrowing programme for $8 billion (Shs28.6 trillion) to be raised from capital markets. Uganda is one of the countries that benefit from AfDB’s funds. AfDB has also shown a strong commitment to socially responsible investment programmes. The AfDB Green Bond programme facilitates the achievement of the bank’s corporate priority of green growth through the financing of eligible climate change projects. “We have stepped up our profile in the international capital markets and will continue to raise funds across the globe to provide cost effective resources to our clients” said Ms Hassatou N’Sele, the acting vice president finance of the AfDB Group. The AfDB high 5 operational priorities are: Universal access to electricity, agricultural transformation, economic diversification, regional market and access to social and economic opportunities. AfDB president, Dr Akinwumi Adesina, says these focus areas are essential in transforming lives. Source: The Monitor

The World Bank’s latest Doing Business Report reveals improved rankings for many countries in the East African Community (EAC), such as Rwanda and Kenya, climbing up 15 and 12 places, respectively, from last year. This development has had a positive impact on the East African container trade market, which continued to see improvements in both imports and exports. Mads Skov-Hansen, Managing Director at Maersk Line Eastern Africa – a member of A.P. Moller-Maersk – says that the container trade growth experienced over the third quarter of 2017, however, has been limited by the political uncertainty that surrounded the recent elections in Eastern Africa’s economic hub, Kenya, which spilled over into other key countries served by the Northern Corridor, such as Uganda. Despite these political influences, the A.P. Moller-Maersk 2017 Third Quarter East Africa Trade Report reveals an improvement in aggregate trade levels over the last quarter, resulting in overall year-on-year growth of 3% for the region. “It’s always difficult to analyse a specific period during an election year. We typically see significant trends play out which may mean that the results captured are not actually a true indicator of real growth experienced,” says Skov-Hansen. IMPORT GROWTH DRIVEN BY CARS AND TEXTILES These trends are particularly relevant to note with regards to imports. “During an election year, imports tend to see a boost just before the election day, as people tend to stock up on basic commodities. There is then usually a drop in imports immediately after, as people hold back...

US President Donald Trump’s newly-unveiled National Security Strategy has shifted America’s engagement with Africa away from human rights, good governance, trade and development to one that merely sees the continent as a market for US goods and services. Mr Trump also depicts Africa as a competitive arena in which US interests are pitted against those of China. “Africa contains many of the world’s fastest growing economies, which represent potential new markets for US goods and services,” the Trump plan states in the slightly more than one page it devotes to Africa. “The demand for quality American exports is high and will likely grow as Africa’s population and prosperity increase,” the paper adds. The Trump team’s global strategy outline, which can be viewed as a roadmap for US foreign policy in the coming years, makes only a single reference to human rights in its 55 pages. This was an exceptionally low figure compared to Barack Obama’s mention of human rights 16 times in a 29-page strategy document his administration issued in 2015. Mr Trump’s America-first approach to global trade involves an explicit determination to outpace China, which the president regards as the US’ top economic rival. This worldview comes into focus in the Africa chapter of the national security strategy, which sees China as expanding its economic and military presence in Africa, “growing from a small investor in the continent two decades ago into Africa’s largest trading partner today.” “Some Chinese practices undermine Africa’s long-term development by corrupting elites, dominating extractive...

As Rwanda was holding its national dialogue (Umushyikirano) bringing together all its children on one table to chart a new course and address shortcomings, a thousand kilometres away, drama was unfolding that left a major blot on the region’s future. While Umushyikirano was all about consolidating Rwanda’s hard earned unity and strengthening the country’s economic and social gains, in the Tanzanian northern town of Arusha, cracks were again beginning to appear in the unifying bond of the East African Community (EAC). Well, consolidating the East African unity, be it political or economic, has always had its ups and downs, but what happened at the East African Legislative Assembly (EALA) this week left a sour taste in the mouth; EAC members are not reading from the same text. The bone of contention was the election of the Speaker of the EALA fourth Assembly, a post that is usually occupied on a rotational basis but through the ballot. Since Tanzania, Kenya and Uganda had occupied the previous three slots, the post was open to the other three members. Theoretically, South Sudan was out of the contest as it was the first time it was participating, so the floor was left between Burundi and Rwanda, to be decided democratically. It is still a mystery why Tanzania decided to join the fray yet it had already exhausted its slot, but that was not the issue; the ultimate decision lay with the Assembly through the ballot. Attempts to scuttle the elections by walking out failed,...

Egypt can be a front runner in transforming intra-African trade and boosting innovation and industrialization on the African continent, Kanayo Awani, Managing Director of the Intra-African Trade Initiative at the African Export-Import Bank (Afreximbank), said today. Speaking in Cairo during the opening of a one-day workshop on intra-African trade, organized by Afreximbank, Ms. Awani said that despite current low trade figures, opportunities abounded and there were many areas in which Egypt could expand its trade with the rest of Africa. “With the new significant policy shift toward export promotion, especially within Africa, and capitalizing on regional trade agreements, like COMESA and the upcoming Continental Free Trade Area, an improved and dedicated shipping line from Sokhna Port to Mombasa, quality and competitive Egyptian products and services, Egypt can transform its trade with Africa and become a major trade partner,” she stated. Egypt could expand its export trade in textiles, electricity, utilities and construction services, said Ms. Awani, who added that there were opportunities to boost pharmaceuticals exports to Nigeria, and furniture to Kenya, as well as to import beef from Sudan and fruits and vegetables from East Africa. The Managing Director said that Afreximbank had engaged with Egyptian businesses over the last year in order to address their trade finance needs and to identify the trade facilitation issues they faced as they tried to expand into existing African markets or to enter new ones. She explained that the Bank decided to organise the workshop in order to respond to some of...

The debate about economic growth and economic development in third world countries has been going on for decades and is not about to stop. For instance, policies that work in some countries, but failing in other nations, is one of the issues that arouse debate. In addition, though growth has gained momentum over the last two decades in some developing countries, it cannot be sustainable until it is localised or based on exploitation of local resources. As a result of these and other contradictions, most countries in the southern hemisphere are characterised by low levels of economic growth and development. Several reasons have been cited for low rate of development and growth in these countries, including colonisation, dependency, political instability, neo-liberalisation, and foreign involvement, among others. Many of these are external factors acting as constraints to their development. Some economists consider structural deficiencies and institutional weaknesses as reasons for low levels of economic development in third world economies. They believe that structural deficiencies and institutional weaknesses create conditions that keep developing countries at low levels of development and growth. In sub-Saharan Africa, domination of agriculture sector has led to continued heavy reliance on commodity exports as a major source of foreign exchange earnings, subjecting these countries to fluctuation in prices and weather conditions. Geographical factors were also considered as affecting Africa’s and developing countries’ economic growth. Landlocked countries which are also resource scarce, are some of least growing economies in Africa. Those do not have good bilateral and free trade...

A key factor that has constrained many Africa countries, including Kenya, from growing into a global economy is the continent’s small markets. These do not permit the realisation of economies of scale. Regional integration allows a country to effectively utilise its comparative advantage in a wider market to maximise its economic potential, diversify production lines, reverse de-industrialisation and marginalisation, and improve the living standards of the populace. Regional integration occurs whenever a group of nations in the same region, preferably of relatively equal size and at equal stages of development, join together to form an economic union by raising a common tariff wall against the products of non-member countries, while freeing internal trade among member countries. The East African Community (EAC), with a single unified market of more than 120 million consumers, should be viewed as a catalyst for economic growth. The ultimate goal of the EAC, beyond trade liberalisation and economic unity, is to pursue full political federation anchored on establishing regional structures and building institutions to foster international relations and strategic interventions. Kenya needs to fast-track the implementation of the EAC, given the various benefits, including trade creation due to specialisation based on comparative advantage, administration savings resulting from the elimination of border policing, enhanced bargaining power of member states, as in the case of the European Union with African countries, enhanced competition resulting in efficiency in production and improved quality of the products, and attainment of economies of scale from the enlarged market. Similarly, integration will stimulate...