A senior official of African Union (AU) said Tuesday the long-awaited tripartite free trade area between three regional blocs is expected to be launched in May in Cairo, Egypt. To boost intra-Africa trade, AU heads of state in January 2012 decided to establish the continental free trade area (CFTA) by 2017 between the Common Market for Eastern and Southern Africa (COMESA), the East African Community (EAC), and the Southern African Development Community (SADC). In a press briefing in the framework of the 24th AU summit at the AU headquarters in Ethiopia's capital Addis Ababa, Fatima Haram Acyl, AU Commissioner for Trade and Industry, said the tripartite free trade area is something to be encouraged as a roadmap for the continental free trade area in Africa. "This is something to be encouraged because as a roadmap for the continental free trade area, this is the first point that was noted by the member states, by the heads of states. We are very happy that it will advance and we are launching this tripartite FTA in May of 2015 in Cairo," she said. With 26 countries, 625 million people, and 1.2 trillion U.S. dollar gross domestic products (GDP), the three regional blocs said earlier they would be completing the tripartite free trade area in December of 2014, recalled the commissioner. "I just want to say that 26 member countries as I say 625 million people and 1.2 trillion of GDP. So, it is very important for Africa and that's why actually, we...

The buying and selling of goods and services between businesses in neighbouring EAC Partner States with the seller being in one Partner State and the buyer in the other, for example a company or an individual business person in Rwanda selling to a company in Burundi. Cross Border Trade (CBT) plays an important role in poverty reduction as it provides trading opportunities for a good number of people, for example women, are the most active traders along Rwanda's borders. The EAC Partner States are recognizant that women make a significant contribution towards the process of socio-economic transformation and sustainable growth and that it is impossible to implement effective programmes for the economic and social development of the Partner States without the full participation of women. Studies that were conducted indicate that 74% of informal cross-border trade is conducted by women and for the majority it is their only source of income. In addition, women trade predominately in lower value, low profit products. Gender patterns in the composition of traded goods have been noticed: women sell mainly foodstuffs, for example, manioc flour, tomatoes, corn, onions, fish etc alongside a few other specific products like palm oil, while men sell a wider variety of products, often with a higher value like secondhand clothing, beer, household items and other fastmoving consumable goods. However, some cross border women traders across the region do not use available formal systems/structures for most of their transactions most of them do not really understand the benefits gained through...

Leadership in public service requires not only intellect but also empathy. Empathy is fundamental to good governance considering that we mostly elect our leaders on notions of trust and empathy. However, one of the major debates in the region is the issue of leaders clinging onto power. It is not just the presidents, look at members of parliament and other office bearers. It is, therefore, my wish that fellow East Africans could embrace our region’s integration a little faster than it otherwise appears to take for us to witness true democratic governance and register improved quality of life for all citizens. The roadmap to attainment of our regional integration is making headway. The Common Market Protocol and the Customs Union are at a very tangible stage. Soon, the Monetary Union which will see East Africa as a block adopt and use a Single Currency by 2024 or even earlier than that. It is vital to note that the East African Monetary Union Protocol once in force will give birth to the EAC Central Bank as a monitoring and regulatory institution though partner states will maintain their Central Banks. With the EAC vision, a prosperous, competitive, secure and politically united East Africa, coupled with the line mission of widening and deepening economic, political, social and cultural integration in order to improve the quality of life of the people of East Africa through increased competitiveness, value added production, trade and investment. It is evident the earlier we fully up our support and...

The search for home-grown innovations that could cut the cost of transport in East Africa has gained momentum with the recent launch of a Sh1.4 billion ($16 million) fund targeting logistics firms. The Logistics Innovation For Trade (Lift) fund launched by Trade Mark East Africa (TMA) in November will up to the end of February be receiving proposals on how firms intend to trigger their innovation verve to boost efficiency in cross border trade. The winning proposals will get grants of between Sh18 million ($200,000) and Sh67.5 million. Targeted firms include vehicle and equipment manufacturers, agricultural produce importers, educational institutions, clearing/forwarding companies, freight tracking systems, barge operators, and shipping and financial services institutions. Civil society organisations that advocate for regulatory and structural reforms to boost competition will also compete for grants of between Sh9 million and Sh18 million. The call for proposals comes hot on the heels of a recent study that found that East Africa had the second highest freight logistics costs on the continent, accounting for 42 per cent of the total value of imports. “These costs seriously erode the marginal competitiveness of goods exported by East African countries and raise the cost of living, reducing trade, economic growth, job creation and poverty reduction,” said Nelson Karanja, communications manager at TMA. Mr Karanja said road transport accounts for 95 per cent of freight traffic in the region and this is unlikely to change much even with the standard gauge railway. “Even if rail is cheaper, unless loading and...

Turkey's moves to gain more influence in African trade is “at the point of no return” and “should go on” despite the presence of giant competitors on the continent. This was the view of economic analysts speaking ahead of President Recep Tayyip Erdogan's 12-country-African visit starting this week. Erdogan will begin the first visit of 2015 by visiting two East African states – Ethiopia and Djibouti. Turkey has increased its interest in the largely developing Sub-Saharan countries in the last decade and has had a significant impact in the Horn of Africa region. Sedat Aybar, an economist from Istanbul's Aydin University, said Turkey is at the “point of no return” in the region and its opening-up to Africa should be supported for the country to reach "the strategic place Turkey has drawn for herself as a global player in world affairs." Turkey has opened 27 more embassies in African countries since 2002, mainly in the Sub-Saharan region – a signal of its diplomatic focus – while Turkey's cooperation agency, TIKA, has nine offices in the region. The second Turkey-Africa Partnership Summit was held in Nov. 2014 in Malabo, the capital of Equatorial Guinea, six years after the first one in 2008; this period has seen Turkey become one of the largest donor countries with an aid volume nearing $1 billion, according to Aybar. The national flag-carrier, Turkish Airlines, now has flights to more than 42 destinations in 27 African countries. Between 2005 and 2013, Turkish trade with Sub-Saharan nations increased...

Government has been asked to embrace the trade facilitation systems being implemented by Uganda Revenue Authority to increase revenue which will reduce dependence on donor aid. The call was made by the Netherlands Ambassador to Uganda Alphons Hennekens while taking six Dutch ambassadors from DR Congo and East African Region on a tour of some of the trade facilitation projects they have been supporting through Trade mark East Africa. Trademark East Africa is a multi-donor funded agency aimed at facilitating trade in the East African region which will in the long run increase cross border trade in the region. Hennekens said that the Netherlands government is committed to supporting Uganda through the implementation of trade facilitation projects like the electronic cargo tacking system, single window system which will reduce the time spent at the documentation center among others. He said such systems will naturally increase the tax revenue for URA because of increased efficiency and compliance by traders when it comes to paying taxes as required by the URA officials at the customs. Some of the systems the Ambassadors understood include the electronic tracking of cargo system which has led to the elimination of physical escorts, improved the security of goods in transit, improved staff performance and reduced transit time from 8 days to 2 days resulting in cost savings of US$400-600 per truck per day. The Ambassadors noted that the new ASYCUDA World computer system has enabled URA to implement the Single Customs Territory (SCT) by eliminating the need...

Egyptian private-equity company Qalaa Holdings SAE is investing $70 million to accelerate the movement of rail cargo carried from East Africa’s busiest port, as it faces competition from a new Chinese-backed link. Qalaa controls Rift Valley Railways Ltd., the operator of a railway built almost a century ago running from Kenya’s Mombasa port to neighboring Uganda. It covers a portion of the same route as a new rail line under construction from Mombasa, designed to speed up freight-transit times, cut transport costs and boost mining and agricultural exports. It isn’t yet clear who will operate the second railway. Qalaa “is investing heavily in a new subsidiary, which will complement RVR by handling cargo at the port of Mombasa in Kenya,” Karim Sadek, managing director of the company’s transportation division, said in an interview from Nairobi. In neighboring South Sudan, Qalaa, through its Nile Logistics arm, plans to acquire additional handling equipment for its river-transport and marine-port businesses, he said. Its service, operating a fleet of barges between the north and south of the oil-producing nation, was disrupted in December 2013 when a power struggle in the ruling party sparked civil war. Tens of thousands of people have died and almost 2 million others have been driven from their homes as the violence continues, according to the United Nations. About 1.5 million people are receiving food aid, less than a quarter of those in need, amid funding shortages and due to bad roads, which are inaccessible in the wet season, according...

The realisation of a large regional economic bloc with a combined population of more than 141.1 million people, land area of 1.82 million square kilometres and a combined Gross Domestic Product of $99.8 billion, bears great strategic and geopolitical significance and prospects of a renewed and reinvigorated East African Community (EAC). The EAC aims at deepening economic, social and political integration and enhance the region’s competitiveness through enhanced value chain, trade and investments. To achieve such goals, the EAC countries established a Customs Union in 2005 and a Common Market in 2010 which provides “four Freedoms” namely, free movement of goods, labour, services and capital, to significantly boost trade and investments and make the region more productive and prosperous. EAC Partner States also qualify for duty-free access to the US market under the African Growth and Opportunity Act (AGOA), as well as European Union (EU), and the Common market of Eastern & Southern Africa (COMESA). Reforms and a growing participation in global trade has helped the EAC region to grow. It has been the second fastest growing economic bloc in the world in recent years with an average growth of 5.8% in 2012 (behind ASEAN at 6.1%) which is the best rate of growth in the Sub-Saharan Africa region. Tanzania, Uganda and Rwanda showed a robust annual growth of over 7% from 2002 to 2012, and the total FDI inflow in the EAC region has almost tripled from $1.3 billion in 2005 to $3.8 billion in 2012. All countries in...

The East African Community (EAC) has been advised to set a target for intra-EAC trade growth for this year of 15% by promptly eliminating Non-Tariff Barriers (NTBs). Peter Kiguta, the Director General Customs and Trade at the EAC Secretariat was speaking at the 16th EAC Regional Forum on NTBs held recently. He suggested the Chairpersons and Co-Chairpersons of National Monitoring Committees (NMCs) to exchange their contacts in order to redress NTBs when reported instead of waiting for the Regional Meetings. He said the share of the intra-EAC has continued to decrease over the years recording less than 12% growth in 2013 compared to 2008 when it recorded 12% growth. “This calls for measures to be put in place to redress the decline which include elimination of NTBs affecting Intra-EAC trade as the EAC Partner States were trading with the rest of the at 88% compared to the European Union which was trading at 2% and Asia at 40%,” Kiguta said. Kiguta underscored that this scenario has led to loss of revenue which is needed to finance infrastructure and other socio-economic projects and the exportation of jobs. He further informed the meeting that the 30th Meeting of the Council had adopted the draft NTBs Bill and forwarded it to the East African Legislative Assembly for enactment into the law, it is expected that to complement the work of National Monitoring Committees and the EAC Regional Forum on elimination of NTBs. Kiguta further said that the implementation of the one stop Border...

Following the signing of the Monitory Union Protocol on November 30, 2013 in Kampala Uganda, by the five EAC Heads of State, the Council of Ministers has many times discussed how to implement this signed protocol. Arguments have been tabled some saying that the 10-year roadmap should guide the implementation process others preferring to have macro-economic issues among EAC Partner States to be converged first. Why Financial Market integration? The very first motive for Financial Market integration is one that explains the origins of monies in human societies: the demand for a means of exchange of goods and services that breaks the double coincidence of wants constraint of the barter system. In this regard, two or more countries willing to promote bilateral trade could initiate monetary integration in order to reduce uncertainties on the bilateral exchange rate of their currencies, and secure settlements among cross-borders commercial partners. More often, as in the case of the EAMU, monetary integration is a part of a more global aim, regional economic and political integration. Therefore, from the simple motive of trade promotion, to the high vision of a single political area, monetary integration may take various forms; a clearing arrangement, a payments union (this form reinforces the clearing arrangement with medium-term credit facility for balance settlements), a reserve pooling arrangement, and subsequently a complete monetary union. It is important to note that all EAC Partner States share a clear mind that a Monetary Union will ease cross border business and help in advancing...