The Economic Insight: Africa report provides a snapshot of East Africa, Central and West Africa, Franc Zone, Northern Africa and Southern Africa's economic performance. According to the report; East Africa is expected to remain the strongest growing region with a 6.3% economic expansion this year. Ethiopia, Rwanda, Tanzania and Uganda are all expected to record real GDP growth above 6% this year, largely due to infrastructure investment and the expansion of financial and telecoms services. African economic growth has in general been driven by public infrastructure investment and the expansion of services to a largely underserviced population. However, financial technology (FinTech) is increasingly receiving attention from both private and public sector, facilitating innovation in other sectors of the economy and allowing African nations to leapfrog more traditional infrastructure. "African economic growth is currently driven mostly by traditional sectors, However, FinTech has the opportunity to leapfrog other key drivers and to foster inclusive development. But this can only happen if it is managed properly," says Michael Armstrong, Regional Director, ICAEW Middle East, Africa and South Asia. How the FinTech industry shaping Africa's future Almost one-third of total funding on the continent was raised by fintech start-ups in 2017. This can be supported by the fact that 60% of all mobile money accounts globally can be found in sub-Saharan Africa (SSA), according to an Ecobank study. The FinTech sector is set to show strong growth over the medium term, from roughly $200m in 2018 to $3bn by 2020. The majority of these investments have...

TANGA is the longest serving port in East Africa. It is a lighterage port with two shallow water berths. The visiting ocean going vessels are anchored at stream buoys, being a maritime safety requirement. As of now, by facilities and business, Tanga is second to Dar es Salaam port, but if fully expanded it could be greatest in the country, due to its large geographical areas. The 354-km highway links it to sister port Dar es Salaam in the South. Tanga Port is situated on the northern coast of Tanzania, close to the Kenyan border. The Tanzania Ports Authority (TPA) has assigned Tanga port to serve the northern regions of the country – Arusha, Kilimanjaro, Manyara and Tanga, specifically supplying fuel, instead of the regions procuring from Dar es Salaam. Tanga Port Manager, Mr Percival Salama says they are strategizing so as to become one of the biggest and efficient ports in East Africa and later in Africa. He says that tremendous efforts have been done by TPA as well as Tanga Port management towards achieving the status. Mr Salama unveils that apart from the TPA management procuring important and record 20 equipment for the port, TPA and Tanga Port have been meeting with businesspersons so as to lure them to use the port, as it has come to their attention that efficiency and relief Initially, Tanga Port seeks to capture market in the Tanzania northern regions and extend the same to neighboring countries, with Mr Salama saying it would...

EAST African region will continue to lead other regions in Africa in terms of economic growth thanks to infrastructure investment and the expansion of financial and telecoms services, an Institute of Chartered in England and Wales (ICAEW)’s latest report says. The report which paints a rosy picture of growth in the region says East Africa is expected to remain the strongest growing region with a 6.3 per cent economic expansion this year. Ethiopia, Rwanda, Tanzania and Uganda are all expected to record real GDP growth above 6 per cent this year, largely due to infrastructure investment and the expansion of financial and telecoms services. African economic growth has in general been driven by public infrastructure investment and the expansion of services to a largely underserviced population. However, financial technology (FinTech) is increasingly receiving attention from both private and public sector, facilitating innovation in other sectors of the economy and allowing African nations to leapfrog more traditional infrastructure. Michael Armstrong, Regional Director, ICAEW Middle East, Africa and South Asia said “African economic growth is currently driven mostly by traditional sectors, However, FinTech has the opportunity to leapfrog other key drivers and to foster inclusive development. But this can only happen if it is managed properly.” Almost one-third of total funding on the continent was raised by fintech start-ups in 2017. This can be supported by the fact that 60 per cent of all mobile money accounts globally can be found in sub-Saharan Africa (SSA), according to an Ecobank study. The FinTech...

A key component of Kenya’s foreign policy is predicated on developing strong bilateral agreements that open foreign markets to receive Kenyan farm produce. Indeed, only a few weeks ago, President Uhuru Kenyatta’s successful State visit to Mauritius saw the Indian ocean island country lift a ban on several Kenyan agricultural products that included avocado, baby carrots and broccoli. Even more recently, President Kenyatta’s trip to China secured access to export frozen avocado to the second largest economy in the world. While these bilateral agreements are commendable, their long-term viability will largely depend on Kenya’s ability to export competitively. Therefore, much effort should be directed towards policies that support a strong export strategy. Indeed, during President Museveni’s State visit to Kenya, Kenyans were shocked to find out that much our milk and eggs come from Uganda, which has a much lower cost of production. It therefore follows, that to be a strong exporting nation, we must address the issues that contribute to high cost of production in Kenya. To start with, the litany of taxes that have been loaded onto crucial items like animal feed raw materials, have proved to be a major obstacle to the development of the agriculture sector leading to meagre earnings. While it is understandable that government needs to raise much needed revenue to service our significant public debt, we must be careful that we don’t kill the goose that lays the golden eggs. Agriculture contributes to more than a third of our economy while also creating...

The United Nations Economic Commission for Africa (ECA) has urged African countries and pan-African institutions to prepare modalities as the African Continental Free Trade Agreement (AfCFTA) edges closer to entry into force. Adeyinka Adeyemi, ECA senior adviser with the African Trade Policy Center (ATPC), called on African countries and partners to undertake trade and investment forums toward the success of the continental free trade pact, which is weeks away to entry into force. On Wednesday, the African Union (AU) set a one-month timeframe to activate the AfCFTA on May 30 as Sierra Leone and the Saharawi Republic deposited their instruments of ratification to the AU Commission earlier in the week. “The two deposits meet the minimum threshold of ratifications required under Article 23 of the AfCFTA Agreement for it to enter into force 30 days after the deposit of the 22nd deposit, which is made by the Saharawi Republic,” the AU said in statement on Wednesday. According to Adeyemi, continental and regional forums and meetings are vital instruments to deepen economic integration of African countries, which is a “vital imperative toward the success of the AfCFTA.”  “There is no doubt that the AfCFTA will not only reduce or eliminate barriers to trade and harmonize standards on the continent,” Adeyemi said. “It will also provide an overarching framework within which regions can address their peculiar challenges in a specific manner. “The free trade pact “should also be used as a catalyst for inclusive and sustainable socioeconomic development in Africa,” he said....

Uganda’s economy is expected to grow 6.3 percent in the financial year starting in July, the IMF said on Thursday, the same pace predicted for this year, as delays to oil production and domestic and regional political tensions drag on prospects. The East African country’s central bank has said the economy needs to expand by at least 7 percent a year in order to provide jobs as its young population enters the workforce. Uganda’s next financial year runs from July 2019 to June 2020. In its latest assessment of Uganda’s economy, the IMF said business sentiment remained strong amid favourable monetary policy conditions, and that public infrastructure investments could help push growth to 7 percent in the medium term. “The main risks to the outlook are unfavourable weather conditions, domestic and regional political tensions, and further delays in the start of oil production,” the IMF said. Uganda is due to hold its next presidential elections in 2021. President Yoweri Museveni, 74, is likely to face off with pop star turned lawmaker Bobi Wine, 37. Security forces have been using teargas and water cannon to break up rallies by Wine and other Museveni opponents as authorities move to blunt their momentum ahead of the poll. Domestic tensions have been joined by regional worries. In February, Rwanda begun blocking Ugandan goods from entering its territory while also stopping its nationals from crossing into Uganda. Kigali accuses Kampala of supporting dissidents. Tensions between the two neighbours remain unresolved and trade has also virtually...

Kenya on Wednesday called on East African financial market regulators to invest in robust information technology (IT) systems to reduce losses occasioned by failure of the bourses trading systems. Speaking during the launch of the Capital Markets Soundness Report in Nairobi, Luke Ombara, director of regulatory policy and strategy at Kenya's Capital Markets Authority (CMA), said the automated trading systems (ATS) across the region had experienced a rise of system hitches which impact trading activity at the bourses. "On April 1, the market trading infrastructure experienced a delay in opening due to unavailability of the central depository system, with trading commencing at 2.55 p.m. with 15 minutes pre-open and two hours and ten minutes of continuous trading to close 5:00 p.m., resulting in a turnover value of 369.7 million shillings (3.69 million U.S. dollars) for the day, a decrease of 44.4 percent from the previous trading day," he said. Ombara said similar challenges occurred in October 2018, leading to an extended delay in trading hours by more than four hours, an impact which led to a drop in equity turnover for the day. Ombara said improved systems will increase opportunities for improved capital markets' infrastructure in future within the region as well as on the global landscape. "Adopting a strong IT system within the market infrastructure will see safer, cheaper, more robust and efficient transactions within the markets which can in turn significantly boost trading liquidity," he added. Wycliffe Shamiah, CMA's director of market operations, hailed concerted efforts by the...

As far as trading blocs go, the European Union (EU) has been a global case study of how to turn a free market into a common market.    Faced with notable challenges in the integration process such as the consecutive crises in the Exchange Rate Mechanism in the early 90’s, the EU defied all odds and continued to expand in depth and geography in a historic feat. However, two years ago, this ideal trading bloc was hard hit by the Brexit vote, which triggered a global conversation on regional trading, agreements and integration towards creating shared prosperity for the countries involved.   In our own context, a snapshot of East African Community (EAC) intra-trade in the past few years will reveal tension-filled trade-relations, as well as an overall cloud of uncertainty on the future of the bloc.   Yet with our geographical advantages, natural resources and global reputation, EAC holds huge potential to set the pace for the Africa Continental Free Trade Area (AfCFTA) and lead the continent into a new age trading with the world on a mutually beneficial platform. Whilst there isn’t much comparison to be made with the EU, one undisputable thing is that their integration process was marred by political and social differences especially with bringing on board Eastern European countries. Through the chaos, nonetheless, members designed new institutions with a view to open up markets and ideological alignments. Our challenges in integration are also hampered by political and social differences, which manifest in seemingly endless Non-Tariff Barriers...

Non-tariff barriers (NTBs) remain a key challenge to east African integration since the establishment of Custom Union (CU) Protocol in 2005. It is clear that trade liberalisation is the central objective of East Africa Community (EAC) and it cannot be achieved with the continuous persistence of old and emergence of new NTBs. NTBs are restrictions that result from prohibitions, conditions or specific market requirements that make importation or exportation of products difficult and/or costly. The EAC Elimination of NTB Act, 2017, also defines NTB as laws, regulations, administrative and technical requirements other than tariffs imposed by a partner state, whose effect is to impede trade. The objectives of EAC Elimination of NTB Act, 2017, are to provide a legal framework for removal of NTBs, provide a process for identification and monitoring the removal of NTBs. The removal of all restrictions to trade will create a truly single market in the region with a market of close to 184 million people. There are several initiatives in place to address NTBs in the EAC. First, the main instrument was the EAC Time-Bound Programme for Elimination of Identified NTBs (EACS, 2009). The strategy of EACS, 2009, was to come up with a list of NTBs reported by partner states and update them during quarterly NTB review meetings. During the meeting new NTBs are reported and the resolved ones are moved to the end of the list. However, the report does not explain how the NTBs have been resolved or how to ensure that...

Kenya plans to modernise an old railway track to link a newer line to neighbouring Uganda at a cost of $210 million (Ksh.21.3billion). According to Reuters, the funding for the project is expected from an unidentified private backer rather than building another modern one with Chinese money. The development of Kenya’s railways has been part of China’s “One Belt, One Road” initiative, a multi-billion dollar series of infrastructure projects upgrading land and maritime trade routes between China and Europe, Asia and Africa. Kenya opened a modern railway linking the port of Mombasa with the capital Nairobi in 2017 at a cost of $3.2 billion (Ksh.323.9billion). This was then linked with another new line, costing $1.5 billion (Ksh.151.7billion) and also funded by Chinese loans, to Naivasha in the Rift Valley. The Nairobi-Naivasha standard gauge rail (SGR) line, will be opened in August but does not yet extend to Uganda. “We need to make sure that when we commission the SGR in August, we have connectivity to Uganda from the SGR so we have to rehabilitate that line to make sure it is properly functional,” Kenyan transport minister James Macharia told Reuters, adding that the work will take a year to complete. Macharia said that spending $150 million (Ksh.15billion) to rehabilitate a decades-old line from Malaba on the border with Uganda and using the rest to build another short track connecting the SGR at Naivasha would be a quicker option than building another SGR. A Chinese loan worth $3.7 billion (Ksh.374billion) for...