Unctad’s Secretary-General Mukhisa Kituyi spoke with JAMES ANYANZWA about the benefits and potential pitfalls of implementing the AfCFTA. July 7 marks the launch of the $3 trillion African Continental Free Trade Area (AfCFTA). Is it time to pop the champagne? I would advise cautious optimism. The entry into force of the agreement establishing the AfCFTA is a landmark achievement after months of technical work and negotiations, and it should be celebrated. However, some critical issues (notably on tariff schedules and rules of origin) still remain.   The single African market is a great thing, but do you think its implementation will be smooth, given that regional economic blocs have been bogged down by trade disputes and poor implementation of Common Market protocols? It is unlikely that the implementation of an agreement of such breadth and depth will be smooth across the board. Challenges are bound to emerge. As a matter of fact, some have already surfaced in the course of negotiations and are being dealt with. What is important, however, is the need to step up to the challenge and harness the regional market for Africa’s structural transformation. But Africa is not starting from scratch. The experience and lessons learnt in the regional economic communities (RECs) can be leveraged to make the AfCFTA implementation smoother and more effective. One of the key advantages of a bloc like this is job creation. Is there a chance for job seekers from small economies to get employed in the more developed economies? Like many trade agreements,...

The African Continental Free Trade was launched yesterday at the 12th Extraordinary Summit of the African Union in Niamey, Niger. President Paul Kagame described the launch of the operational phase of the African Continental Free Trade Area as a significant milestone for the continent and the African Union. President Kagame said Rwanda was in full agreement of the report by Niger’s President Mahamadou Issoufou on the way forward on the agreement. Among the proposals in the report include catering for the interest of small-to-medium cross-border traders by simplifying trade regimes applicable to them. “We particularly concur on two points. One, the need to cater for small-to-medium cross-border traders, by simplifying trade regimes applicable to them,” he said. Kagame also endorsed the decision to commence trading under the AfCFTA on July 1, 2020. At the summit, the Executive Council designated Ghana as the choice to host the AfCFTA Secretariat. “I agree with the proposal of the Executive Council designating Ghana as our choice to host the AfCFTA Secretariat. I congratulate them as well,” Kagame said. Following the launch of the agreement and in the build-up to implementation, Kagame called on stakeholders to finalise remaining negotiations and operational instruments. “Our task now is to finalise the remaining negotiations and operational instruments in a timely manner,” he said. Among the ongoing negotiations includes Rules of Origin which will determine the eligibility of goods to be traded under CFTA as well as modalities such as protection of infant industries. At the summit, a number...

The sector will however contend with myriad challenges it currently faces which have resulted in exit of some firms from Kenya and the share of the sector’s contribution to the economy declining to just 7.7 per cent last year from 10 per cent in 2014. President Uhuru says there is a raft of measures that his administration is undertaking to prop up the industrial sector and woo more firms to set up production facilities in Kenya as well as increase capacity among those already operating in the country. This would enable the industry to churn out competitively priced products that will meet demand not just for the Kenyan market but also the region. >Already a key exporter of finished products to other East African countries, Kenya is looking to grow the market to include nations outside the East African Community. It expects the African Continental Free Trade Area (AfCFTA) to serve as a key platform to enable it substantially grow the footprint of locally-made products on the continent. The AfCFTA agreement has been ratified by 24 African countries and is expected to be launched in July, opening up trade on the continent. It is aimed at create a single market for goods and services, akin to the European Union, enabling free movement of goods and people. Uhuru said the government would deepen relations that allow the country to export to markets such as North America, Europe and even China. Such include America’s African Growth and Opportunity Act (Agoa) and the...

The President said through open trade and enhanced people-to-people interactions, the region will be able to deal with the challenges facing its people including poverty. “We must aim to remove all barriers that hinder the free movement of our people across our borders,” President Kenyatta said adding that East Africans are one people with a shared heritage and a common destiny. President Kenyatta spoke when he addressed thousands of Chato town residents in Northern Tanzania who gathered to welcome him during the start of his two-day private visit of the region at the invitation of President John Pombe Magufuli. He cautioned political leaders against making inflammatory remarks saying no one will be allowed to sow seeds of division among East Africans. “How can you tell a Tanzanian not to visit Kenya. You cannot deny Kenyans a chance to do business in Tanzania,” the President said. President Magufuli thanked President Kenyatta for the private visit saying he was honoured to host the Kenyan leader in his home village. He said President Kenyatta has made history for being the first Head of State to visit Chato which is a township in the Geita region. Speaking on the growing trade between the two neighboring nations, President Magufuli said Kenyans own 504 companies in his country worth 1.7 billion US dollars compared to 24 Tanzanian companies in Kenya worth 189 million US dollars. “According to the Kenya Tourism Board, in 2018, Tanzanian tourists visiting Kenya were 222,216 accounting for 10 percent of the over...

African nations are headed for another round of tough negotiations as they seek common rules for their newly formed free trade area even after they settled the headquarters question on Friday. To achieve its goal of boosting intra-regional trade, the African Continental Free Trade Area (AfCFTA) must craft rules of origin (RoO) that encourage imports from members while slowing orders from outside the bloc. A committee of experts is currently working on RoOs to be applied by all the AfCFTA signatories in a move set to test old commercial ties with French and English speaking European countries. “We expect this to be an area for some tough negotiations,” said Chris Onyango, a consultant with the United Nation Conference on Trade and Development (UNCTAD). “But there is a starting point as all the regional economic blocs in the continent already have RoOs which the committee may decide just to harmonise.” The Common Market for East and Southern Africa – where Kenya and most of its East African neighbours belong – for instance has its own RoO. The RoOs only permit goods that are either fully produced within the member states or imports with local value addition accounting for at least 35 per cent of the ex-factory cost. Other regional blocs are the Economic Community of West African State (Ecowas) and the Gaborone-headquartered Southern African Development Community. "If successfully implemented, AfCFTA could generate a combined consumer and business spending of $6.7 trillion by 2030, accelerate, expand economic diversification and facilitate job creation...

The President said through open trade and enhanced people-to-people interactions, the region will be able to deal with the challenges facing its people including poverty. “We must aim to remove all barriers that hinder the free movement of our people across our borders,” President Kenyatta said adding that East Africans are one people with a shared heritage and a common destiny. President Kenyatta spoke Friday when he addressed thousands of Chato town residents in Northern Tanzania who gathered to welcome him during the start of his two-day private visit of the region at the invitation of President John Pombe Magufuli. He cautioned political leaders against making inflammatory remarks saying no one will be allowed to sow seeds of division among East Africans. “How can you tell a Tanzanian not to visit Kenya. You cannot deny Kenyans a chance to do business in Tanzania,” the President said. Kenyatta’s remarks come against the backdrop of the arrest of a Kenyan lawmaker who was rallying his countrymen to expel foreigners. His statement also follows Rwanda’s decision to stop Rwandans from traveling to Uganda, saying they are always mistreated – a charge Kampala denies. Rwanda has also slapped a trade embargo on Ugandan goods, a move heavily criticized by Kampala. Kenya’s Deputy President William Ruto also criticized Rwanda’s decision to close the common border with Uganda. On his part, President Magufuli thanked President Kenyatta for the private visit saying he was honoured to host the Kenyan leader in his home village. He said President...

A new regional platform is promising to revolutionise the operations of small and medium-sized enterprises (SMEs) by easing their cross-border operations and minimising risks. Players are also banking on the Digital Financial Inclusion that the Comesa Business Council (CBC) launched to ride on innovative solutions to drive the growth of SMEs and reduce risks associated with trade. The project, which received a Sh150 million grant from the Bill & Melinda Gates Foundation, plans to create a continent-wide SME portal as well as a cashless payment platform starting with Kenya and nine other pilot countries. Kenya Association of Manufacturers (KAM) chairman Sachen Gudka backed the establishment of the portal, saying it is a major milestone in unlocking the potential of SMEs in Kenya and the region. “Traditional methods of trade on hard cash exchange will be cost-effectively migrated onto the platform that provides digital solutions that support efficient and lower-risk payments,” he said. KAM chief executive Phyllis Wakiaga urged participating governments to put in place measures that would enable SMEs to trade across borders via seamless movement of raw materials, locally produced and processed goods as well as the free flow of labour. “We need solutions for challenges making it impossible for SMEs to trade across borders,” she said, adding that the obstacles included unfriendly policies and regulatory regimes that do not accommodate SME needs. She said Kenya’s partner states must recognise quality standards in the region, easing the need for SMEs to invest in having their products certified by each...

The port, dubbed Tangier MED, that is in the city of Tangier, is now bigger than other African giant ports — Port Said in Egypt and Durban in South Africa. The port was launched by Crown Prince Moulay Hassan on behalf of His Majesty King Mohammed VI. “We want to establish a business hub and build a network of global trade routes that link Africa to the rest of the world for everyone’s economic benefit,” said Mehdi Tazi Riffi, the port’s general manager. It has the capacity to handle 9 million containers, 3 million passengers, 700,000 trucks and 1 million vehicles. Other than transport logistics, Tangier MED is an industrial platform for more than 900 companies, representing an annual business volume of Sh830 billion. The project was completed at a cost of Sh80 billion through a Public-Private-Partnership (PPP). It presents a good example for African big infrastructure projects, including the Lamu Port that is projected to cost Sh500 billion. According to the Lapsset Corridor Executive Director Silvester Kasuku, Kenya is working closely with the Tangier Port management because the ports’ models are very similar. “We are looking at the best practices from Tangier MED Port and we are focusing on the networking prospects as we encourage inter-Africa trade that will help our people grow economically,” said Mr Kasuku. Using the latest technology, and boasting a workforce of 5,000, the port is a hub of efficiency. It is served by the newly built 345-kilometre speed train that links Casablanca to Tangier....

Chinese contractors are on course to complete the Kenya-South Sudan highway in 2020, a Kenyan official said on Wednesday.Julius Korir, principal secretary in Kenya's Ministry of Transport, Infrastructure, Housing and Urban Development said that three Chinese contractors won the tender to upgrade about 248 km of road to bitumen standards on the Kenyan section of the road that links to South Sudan."So far the project is about 30 percent complete and we expect the road to be commissioned in 2020," said Korir.Korir said that Kenya is prioritizing the Kenya-South Sudan highway, which is part of the East African Community road network, in order to boost intra-regional trade According to the government official, trade between South Sudan and Kenya is hampered due to poor quality of roads."Kenyan traders are forced to travel through Uganda in order reach South Sudan, a process that could take up to three days. With the new road, travel time will be cut by at least two days," Korir said. Source: Standard Digital

The African Union launches the “operational phase” this weekend of a long-awaited trade accord, but analysts say the continent faces an uphill task to transform the pact into reality. The 55-nation AU, gathering for a summit in Niger, will give the formal push to a deal to phase out tariffs on trade from the Cape of Good Hope to Cairo. By doing so, say supporters of the African Continental Free Trade Area (AfCTA), business between African nations will boom. The economy of Africa, with a GDP of $2.5 trillion today, will reach takeoff just as its 1.2 billion population doubles over the next three decades, they predict. “It’s a remarkable achievement, and one that can even be described as historic,” AU Commission chief Moussa Faki Mahamat said Thursday in the Niger capital Niamey. Backers were given something to celebrate ahead of the summit: on Tuesday, Nigeria, the continent’s largest and most populous economy, said it would sign after long holding back. Talks on free trade began back in 2002, culminating in a deal that in late May crossed the threshold of ratification by at least 22 countries. That tally is now 25 out of 55 AU members. Benin and Eritrea are the last countries yet to sign. ‘Made in Africa’ The sunny mood may well sour when the AU is confronted with the realities of the task at hand, say observers. “Negotiations on some very important points have not yet been completed,” said Trudi Hartzenberg, director at Tralac, a specialist...