The coming into force of the African Continental Free Trade Area (AfCFTA) Agreement, on May 30, 2019, is a turning point for the African continent, experts and integrationists have said. The development means that AfCFTA is now a binding international legal instrument. “For many who have yearned for an integrated Africa, today is that day where hope of an Africa that trades more with itself than the rest of the world is palpable,” Chijioke Odo, Trade Advisor at international accounting firm Deloitte, tweeted yesterday. He added: “Whilst some would argue that removing tariffs would not necessarily increase intra-Africa trade (with logistics, free movement of persons and territorial protectionism being the notorious impediments to intra-Africa trade), it is my view that AfCFTA will galvanise progress.” Change is coming to Africa and those who have not recalibrated their business for the incoming market would be left behind,” he added. Francis Mangeni, Director for Trade, Customs and Monetary Affairs at the COMESA Secretariat, told The New Times on Thursday that the entry into force of the trade deal is “a turning point in African history.” The development, he said, opens up a “market of over 1.2 billion people”. The region’s consumer and business spending is over US$4 trillion annually and is estimated to hit US$5.6 trillion by 2025. “The private sector is awake to these prospects and is mobilising,” Mangeni said, adding that “125 companies already have a multinational presence across Africa and a number of developed countries.” Some 400 pan-African companies have...

The Head of State spoke at State House, Nairobi, when he received a special message from President Nana Akufo Addo of Ghana delivered by special envoy Joseph Kofi Adda who is also his country’s Minister for Civil Aviation. Kenya and Ghana were the first countries in Africa to ratify the AfCFTA protocol which aims at creating a single continental market for goods and services, with free movement of investment and persons. President Kenyatta said the two countries, which share a common liberation history, are keen to ensure Africa achieves economic integration as envisioned through AfCTA. “We follow the legacy of our forefathers who gave us political liberation to bequeath the continent economic integration,” the President said. President Kenyatta however cautioned that African countries need to be honest with each other if aspirations of full economic integration have to be met. “We must find a way where all of us come out as winners. We want Africa to come together for the mutual benefit of all countries,” he said adding that Kenya looks forward to the final signing of the AfCFTA agreement. Earlier, President Kenyatta held talks with Fiji Prime Minister Josaia Voreqe Bainimarama who is in the country to attend the ongoing UN-Habitat Assembly at Gigiri, Nairobi. The discussion between the two leaders touched on the historical similarities between Fiji and Kenya, the two nations having been British colonies, and opportunities for economic cooperation especially in trade and tourism. Kenya and Fiji are top global tourism destinations.  Source: Capital Business

INTRODUCTION As of April 29, 2019, 22 countries have deposited their instruments of ratification of the African Continental Free Trade Area (AfCFTA) agreement[1] to the African Union (AU), meeting the threshold for the agreement to come into effect. The AfCFTA entered into force on May 30, 2019. The significance of the AfCFTA cannot be overstated: It will be the world’s largest free trade area since the establishment of the World Trade Organization (WTO) in 1994.Landry Signé has estimated that under a successfully implemented AfCFTA, Africa will have a combined consumer and business spending of $6.7 trillion in 2030.He also finds that the AfCFTA will have a significant impact on manufacturing and industrial development,tourism,intra-African cooperation, and economic transformationUNECA has predicted it will raise intra-African trade by 15 to 25 percent, or $50 billion to $70 billion, by 2040, compared to an Africa without the AfCFTA. The International Monetary Fund (IMF) similarly projects that, under the AfCFTA, Africa’s expanded and more efficient goods and labor markets will significantly increase the continent’s overall ranking on the Global Competitiveness Index.Increased market access, in turn, is expected to enhance the competitiveness of industries and enterprises, the exploitation of economies of scale, and the efficacy of resource allocation. While the AfCFTA’s ratification is a cause for celebration, much work remains as critical parts of the agreement have yet to be completed—including countries’ schedules of tariff concessions and services commitments, rules of origin, investment, intellectual property, competition, and a possible protocol on e-commerce. The extent to which the...

Rwanda is looking for $1.3 billion to fund the construction of the proposed Isaka-Kigali standard gauge railway that links Rwanda and Tanzania, a senior Rwandan official said Tuesday. The figure is higher than $1.2 billion revealed during the launch of the 400 km railway line on January 20, 2018 in Dar es Salaam. "The study for Isaka-Kigali SGR is completed," said Jean de Dieu Uwihanganye, Minister of State in charge of Transport, while speaking at a local radio station talk show. "Rwanda is looking for a staggering around $1.3 billion to finance its portion with the aim of reducing logistics costs, boosting trade and easing the movement of people between Rwanda and Tanzania." Investing in transport projects is among the Rwandan government's top priorities as a way to attract investment in productive sectors, improve business environment and increase jobs opportunities, he said. Initial studies had shown that the project that will connect landlocked Rwanda to the Dar es Salaam port was estimated to cost $2.5 billion. Source: Rwanda Today

The operation lends support to the government’s ‘Big Four’ agenda which prioritises agriculture, affordable housing, universal health coverage and manufacturing. In agriculture, the Kenya inclusive growth and fiscal management development policy financing facility will support critical reforms that will enhance competition and market transparency, reduce corruption opportunities and help Kenyan farmers to achieve higher productivity and to increase their incomes. Reforms supported by the facility include better targeting of subsidies for agricultural inputs to reach the intended beneficiaries (using e-vouchers and biometric digital identification), reducing inefficiencies and leakages in the procurement and marketing of fertiliser and establishing a warehouse receipt system and a commodities exchange to help farmers get easier access to credit and to reduce post-harvest losses. By supporting the advancement of digitisation through the creation of the national digital ID and pushing for access of internet services to all Kenyans, the facility will enhance service delivery by the government to its citizens, and reduce the need for face-to-face interactions and corruption opportunities. In housing, the operation will remove major regulatory constraints that developers face, help them lower construction costs and thereby increase the supply of less-expensive housing units. The reforms supported by the operation are set to unlock the availability of longer-term home loans and catalyse the development of the housing finance market in Kenya, which is expected to triple the proportion of households in Kenya who have access to a mortgage. The operation will also provide support to the government’s medium-term fiscal consolidation plan by supporting measures...

According to engineers supervising construction works at the border post on Rwandan side, the progress of the project is at 96% and will have been completed by next month. In March this year, Rwanda closed Gatuna border to heavy vehicles that were directed to cross through Kagitumba and Cyabika corders as construction activities are underway. The border is expected to improve cross border trade upon completion and reduce the time spent at the border during clearance processes.As IGIHE visited the construction site, workers on the Rwandan side were working tirelessly to have it completed the soonest possible. Tarmac roads on Rwanda side have already been completed as efforts to make them green, planting grasses along the road sides are underway.Buildings are also in final phases as workers are currently painting and doing other light works. “Construction works stands at 96% on Rwanda side. This means activities will be completed within two weeks. By then, the remaining thing will be relocating equipment from old to new buildings and installing internet,” one of engineers supervising the project has told IGIHE. Gatuna border post project is expected to be completed at a cost of Rwf 15 billion. Even though construction works nears completion on the Rwandan side, Uganda is not putting in much effort in the project. By the time IGIHE visited the border recently, no works were being executed on the side of Uganda expect cattle seen grazing around the project’s premises with the presence of old structures. The construction of some buildings has also stalled while no tarmac road...

Kenya is deliberating on how to increase trade and counter challenges of a post BREXIT trade cooperation arrangement. Speaking at the Intra-Commonwealth trade summit for SMEs, Trade Cabinet Secretary Peter Munya said the cooperation will help small and medium enterprises grow their production to international standards. “The discussion on growing Intra Commonwealth Trade on options for policy and regulatory cooperation is timely as it will tackle policy options for increasing trade and the advantages, possibilities and challenges of a post BREXIT trade cooperation arrangement,” Munya said. In 2018, Kenya's exports to UK increased to Sh40.19 billion from Sh38.55 billion the previous year. Exports to the EU also rose to Sh131.20 billion from Sh125.61 billion over the period. Imports from the UK and EU increased to Sh31.55 billion and Sh219.60 billion respectively in 2018. However, with the Brexit scenario, Kenya fears losing business with both partners where also the UK is expected to lose trade deals if it withdrawal from EU. UK is part of close to 40 trade agreements which EU has with more than 70 countries. Munya however said that trade between UK will continue. Limited access to finance and beeing slow in incorporation of latest technologies have been highlighted as major challenges hindering the growth of SMEs and dragging the country from competing at the global market level. Others include unawareness to international standards and quality assurance, and lack of research and innovation on new products. The corporation formed by commonwealth secretariat composed of 53 countries is set...

Kenya remains key to Somaliland’s quest for international recognition, the Horn of Africa country’s Ambassador to Kenya Bashe Omar has said . Last week Somaliland leaders met Kenya’s top political leaders and business community to discuss ways of strengthening economic and political partnerships. Somaliland leaders, who met former Prime Minister Raila Odinga in Nairobi, pushed to strengthen trade ties between the two countries. The meeting, which was facilitated by Mr Omar, discussed, among other things, ways of improving trade and security. Mr Odinga noted the importance of Somaliland given its and stability in the Horn of Africa region. RECOGNITION At the same time, Majority Leader in Kenya’s National Assembly Aden Duale invited Somaliland’s two political parties UCID and Kulmiye to the Kenyan Parliament where ways of strengthening best practices between the two countries, was discussed. Kenya has continued to support Somaliland’s push for recognition besides increasing trade opportunities between the two countries. Somaliland remains unrecognised 28 years after separating from Somalia in 1991. However, Ambassador Omar believes Kenya can play a big role in helping his country gain recognition and grow economically. “Kenya is important in our quest for recognition. We know it can play a key role in pushing for our economic stability and international recognition,” Mr Omar said. Source: Wardheer News

Uganda is set to host the 4th African Tea Convention & Exhibition starting from June 26 – 28 June 2019. This is a global event for the tea industry organized by the East African Tea Trade Association (EATTA) based in Mombasa, Kenya assisted by the Uganda Tea Association (UTA). The conference will host specialized forums focusing on the four crucial aspects affecting the tea farmer –e.g. the environment, production and processing, human rights and other tea production challenges and consumer changing tests. The convention and Exhibition that will be opened by his Excellency, the President Yoweri Museveni, shall also feature an exhibition of the latest trends and tea products from all over the world and provide a one-on-one interaction of the global tea industry experts. The event provides a great opportunity for its stakeholders to interact with world tea leaders and technology experts, industry experts, agriculture input suppliers, practitioners, researchers and scholars, financiers and investors, logistic and warehousing experts, tea buyers, tea packers and retailers, shippers and freight agents, supply chain corporates, commodity traders, tea brokers, tea value adders and blenders. Other inputs suppliers among other stakeholders from over 30 tea producing and consuming countries across the globe will attend; They will come from Kenya, Rwanda, Japan, USA, Germany, Denmark, Pakistan, India, Malawi, Spain, Sri Lanka South Africa, Argentina, Uzbeskistan and United Kingdom among other countries. “The African Tea Convention and Exhibition is the largest tea industry trade show and conference in Africa. Thousands of stakeholders attend it to discover...

The U.S. ditched the Trans-Pacific Partnership, while across the Atlantic, the U.K. is trying to extract itself from the European Union and its single market. But while free trade is under threat in much of the world, African countries are heading in the other direction: the continent is on track to create the largest free trade agreement by population that the world has seen since the 1995 creation of the World Trade Organization. That organization has 164 member countries. On May 30, the African Continental Free Trade Area (AfCFTA) will become a reality. All but three of Africa’s 55 countries have signed up, creating a free trade area that covers more than a billion people and a collective GDP of over $2 trillion, and includes most of Africa’s largest economies, including South Africa and Egypt. If hold-outs Benin, Eritrea and Nigeria—Africa’s largest economy—join in, that’s a total of 1.2 billion people and $2.3 trillion in GDP. By way of comparison, NAFTA and the EU-Japan free trade agreement each cover a collective GDP of around $22 trillion. But even when added together, they don’t cover as many people as the AfCFTA will if every African nation joins. Here’s what you need to know about the deal that could transform Africa’s business landscape. WHAT’S THE GOAL? Trade within Africa is in a dire state. A mere 17% of African countries’ exports go to other African countries—compare that with intra-regional trade levels of 59% in Asia and 69% in Europe. That means Africa doesn’t feature much in the way of cross-border value chains. Why? There’s currently a...