Non-tariff barriers (NTBs) remain a key challenge to intra-African trade even after the launch of the African Continental Free Trade Area Agreement (AfCTA), experts have warned. Speaking during the fourth World Transport Congress which was held in Nairobi last week, players in the shipping and logistics industry said without tackling the commercial challenges posed by NTBs, the AfCTA dream will never be realised. NTBs include quotas, embargoes, sanctions, discriminatory levies among others. AfCTA aims to accelerate intra-African trade and boost Africa’s trading position in the global market. The forum also highlighted how the shipping industry is embracing technology and the role of transport and logistics service providers in promoting green shipping. George Kidenda, a shipping and logistics analyst in Nairobi, said in efforts to increase free trade, African governments must aim to reduce up to 97 per cent of taxes. “We need proper infrastructure and free transportation of goods to achieve this. Most of our roads are not passable. Our airlines do not have free landing rights,” Kidenda said. “We also lack internet connectivity.” Head of Kenya Airways cargo business division Peter Musola, while speaking at the meeting, emphasised the need for trade liberalisation in Africa. “One of the biggest challenges in Africa is the issue of mutual demand. Airplanes or cargo ships will go in one direction full and return empty and this has the effect of increasing the price of goods. Trade liberalisation will stimulate domestic trade. The price will drop,” Musola said. According to the 2021 UNCTAD...

The recent admission of Somalia into the East African Community (EAC) has brought to the forefront the complexities and challenges associated with trade within this regional bloc. Despite the opportunities that come with Somalia’s inclusion, a new report underlines vital issues that need to be addressed for the EAC to fully benefit from the potential of regional trade. Challenges in Regulatory Compliance The report highlights the difficulty of navigating the different regulatory frameworks that member countries have in place. These disparities can create barriers and inefficiencies in trade, affecting the smooth flow of goods and services across borders. The economic disparities between member states, such as Somalia, with its ongoing conflict and vulnerabilities to climate change, and more stable countries like Kenya and Uganda, can lead to imbalances and tensions within the trading bloc. Infrastructure and Economic Disparities Infrastructural inadequacies, particularly in the road and rail networks, are another significant issue. Inconsistent and underdeveloped infrastructure can hamper the movement of goods, increase costs, and further widen the economic disparities between countries. The report emphasizes that for the EAC to truly thrive, there needs to be a concerted effort to address these inequalities and invest in robust infrastructure. The Path Forward The report suggests that harmonizing regulations can significantly reduce trade barriers and inefficiencies. It also stresses the need to address economic inequalities among member states. Investments in infrastructure, particularly in transport networks, are essential in facilitating the movement of goods and reducing costs. Additionally, the report mentions the potential benefits...

Non-tariff barriers (NTBs), a complex web of regulatory and procedural stumbling blocks, are mounting considerable challenges for businesses within East Africa. These barriers, stretching beyond conventional tariff measures, are stifling the free movement of goods and services, consequently escalating operational costs and hampering trade in the region. NTBs: Obstructing Aspirations of Regional Integration These hindrances are emerging as a formidable threat to the hopes of regional integration among East African nations. The pursuit of a unified market, with its promise of fostering economic growth and competitiveness, is being thwarted by NTBs. The business environment is complicated by these barriers, which discourage cross-border trade and deter potential investors. Impact on Economic Development The elimination or significant reduction of these barriers is viewed as crucial in realizing the envisioned level of integration. Such a level is expected to stimulate investments, bolster intra-regional trade, and spur economic development in East Africa. However, the persisting presence of NTBs poses a significant challenge to this ambitious blueprint. Climate Reality and Economic Disruption In parallel, the Middle East and Central Asia are grappling with a grim climate reality. The regions are witnessing temperatures rising at double the global average, along with increasingly unpredictable and scarce rainfall. These adverse climate conditions are poised to exacerbate existing conflicts and disproportionately affect fragile states. The economic disruption that ensues is set to intensify. Despite the challenging climate situation, many countries within these regions are initiating measures to mitigate the impacts of climate change. Nevertheless, the need for more ambitious...

Leaders and experts from various sectors and regions shared their insights and experiences about the role of transport infrastructure in transforming the continent at the Africa Investment Forum (AIF), an annual business gathering that aims to raise funding for infrastructure and other projects in Africa. Participants gave examples of how transport infrastructure, such as roads, railways, ports and airports, can foster trade, integration, and growth in Africa. They generally agreed that Africa still has a huge infrastructure gap that hinders its development, stressing the need to increase infrastructure financing through innovative solutions such as those promoted at the AIF. Participants heard that African countries have a dual challenge in developing their transport infrastructure: they must ensure efficient, safe, and affordable mobility for all, while reducing the environmental impact of that infrastructure. This is a complex and urgent challenge that requires innovative ways of managing risks and attracting capital, particularly from the more risk-averse private sector. Dr. Akinwumi Adesina, President of the African Development Bank (AfDB), noted that AIF brings together world-class financiers that have the ability to use innovative financing instruments and mechanisms – such as pooled financing facilities, blended finance, and guarantees – to lower risks and increase returns. He called for significant investments to build better roads, bridges and ports, noting that the AfDB was leading the way in championing big ticket investments in transport infrastructure across the continent. “As of 2022, the African Development Bank had financed 25 transport corridors, constructed over 18,000 kilometres of roads, 27...

The 16 members of the Southern African Development Community (SADC) are exploring ways to further integrate their diverse economies and strengthen regional value chains. With a combined population of nearly 270 million people and $700 billion in GDP, the SADC bloc represents enormous potential for increased growth and development if member states can enhance economic cooperation and trade. By removing barriers to cross-border commerce, SADC aims to give regional firms access to wider markets, promote competition, facilitate investment flows, and develop joint manufacturing capacities. The current landscape is fragmented, with intra-SADC exports accounting for only 22% of total trade as of 2020. Deeper integration promises to unlock new industrial growth poles while expanding opportunities for resource-linked and agricultural exports within the bloc. Key initiatives aim to reduce tariffs and streamline cross-border trading procedures. The SADC Free Trade Area, enacted in 2008, eliminated tariffs on 85% of goods traded within the bloc. Further progress on the remaining 15% of sensitive items and reducing non-tariff barriers will help companies benefit from regional market access. The Regional Indicative Strategic Development Plan 2020-30 targets lifting intra-regional trade to 40% of total trade by 2030. Harmonizing regulatory standards and product requirements across SADC members can also make trading simpler for regional firms. Streamlining cumbersome border procedures, documentation and customs clearance processes through digitalization and one-stop border posts can bring down transaction costs. Ambitious proposals like the SADC Customs Union aim to eliminate duties on imports from outside the region. A unified approach to external tariffs...

Within the framework of the working European Union group spear-headed by Germany, United Kingdom and The Netherlands, a number of African countries have been listed to receive considerable investment support and further engage in forward-looking projects under the EU flagship titled the G20 Compact with Africa. The G20 Compact with Africa conference, which aims to help bolster private investment in the world’s poorest, but fast-growing continent, was held November 20 in Berlin, Germany. The conference underscored a strong renewal of business interest in Africa. It further portrays efforts by the European Union members in strengthening economic relations with the continent, especially Africa’s potential for renewable energy. As widely known, Europe and the United States are jostling with Russia and China for geopolitical influence, critical minerals and new economic opportunities in the world’s second most populous continent. In practical terms, Africa wants the European Union to remain as its partner for mutually beneficial cooperation and play a constructive multifaceted role in promoting the positive development of Africa-EU relations. G20 Compact with Africa Conference hosted by the Federal Chancellor of Germany with preceding “G20 Investment Summit – German Business and CwA Countries.” According to documents, the member countries of the G20 Compact are Morocco, Tunisia, Egypt, Senegal, Guinea, Ivory Coast, Ghana, Togo, Benin, Burkina Faso, Rwanda, Democratic Republic of Congo and Ethiopia. Reports said German Chancellor Olaf Scholz, who has visited Africa several times since taking office in late 2021, held bilateral talks with several African countries before finally hosting a German-African...

The African Continental Free Trade Area (AfCFTA) represents a historic opportunity to boost intra-regional commerce, reduce poverty, and spur Africa’s economic transformation. The World Bank estimates that AfCFTA could lift over 50 million people out of extreme poverty and raise incomes by nine per cent once fully implemented. However, realising these gains will require expanding access to financing and investment to energise trade and engage all Africans in the AfCFTA’s success. To achieve this, it is imperative to recognise that countries do not trade; people do. Therefore, there exists an urgent need to create viable avenues for trade financing that can empower individuals, entrepreneurs and businesses across the continent. The AfCFTA represents a historic opportunity to foster economic integration and create a single market for goods and services across Africa. However, the success of this ambitious initiative relies on the active participation of a multitude of actors, from small and medium enterprises to established businesses, and from rural farmers to urban entrepreneurs. Recognising that these diverse players are the true agents of trade, it becomes evident that facilitating their involvement requires a targeted approach to address the financial barriers they face. Bridging the trade finance gap A persistent challenge for African traders is limited access to the affordable financing needed for cross-border transactions and supply chain operations. The trade finance gap for Africa is estimated at over $100 billion annually. Boosting financing from both public and private sources is imperative to enable businesses of all sizes to engage in the...

Cargo volumes through Mombasa port, a gateway to several countries in East Africa, have defied a global economic crunch to post growth in the first nine months of this year. The latest data by the Kenya Ports Authority (KPA) shows the total throughput for the period under review grew by 12.9 per cent to register 26.6 million tonnes compared to the 25.8 million tonnes handled in the same period last year. This represents 552,461 million tonnes (2.1 per cent) above the set target with total imports recording 16.2 per cent growth with 532,176 twenty-foot equivalent units (Teus) passing through the port in the first nine months this year. This is the highest growth since outbreak of Covid-19 in 2020 with an increase in efficiency coupled with heavy investment in both infrastructure and equipment bearing fruit. KPA managing director William Ruto remains optimistic the port will surpass last year's target. "We are focused to ensure we increase our throughput after we acquired new cargo handling equipment and also opened a number of access routes which have increased efficiency thus attracting more clients," he said. The data shows exports registered 14.4 per cent equivalent to 519,819 teus exported whereas Tanzania continues to benefit from the recently revamped Mtwara port to eat into Mombasa’s transshipment share to register a decline of 19.3 per cent. Despite registering a decline of 3.2 per cent in restows and 19.3 in transshipment, Mombasa port withstood current global inflation to register 1,191,282 teus this year compared to 1,083,387...

Rwanda has made efforts to enhance its oversight of food quality and plant health, known as phytosanitary capacities. The goal is to bring these systems in line with global standards, ensuring that Rwandan products meet international requirements. According to experts, this is due as Rwanda prepares to engage in trade within the African Continental Free Trade Area (AfCFTA), where adherence to high-quality standards is essential for successful and seamless cross-border commerce. On Friday, November 17, insights emerged during a validation workshop of Rwanda's food control system and phytosanitary capacity evaluation. The event, attended by prominent figures such as Jean-Chrysostome Ngabitsinze, Rwanda's Minister of Trade and Industry, Coumba Sow, FAO Representative in Rwanda, Dr Brian Chirombo, World Health Organization Representative, Amparo Gonzalez Diez from the delegation of the European Union to Rwanda, as well as representatives from food standards institutions and producers, shed light on Rwanda's commitment to enhancing its food control infrastructure. During a press interview, Ngabitsinze emphasised the substantial costs associated with adhering to international standards. He outlined the need for funding to establish infrastructure and labs equipped to meet these standards, estimating a requirement of over Rwf1.5 billion for the labs and a total project implementation cost exceeding Rwf4 billion. "This ongoing project involves collaboration with key entities such as FAO, EU, and TradeMark East Africa. The initiative aims to foster collaboration between grassroots actors, including farmers, and authorities and food producers, ensuring the production of high-quality goods," he said. Ngabitsinze expressed the urgency of preparing Rwanda for...

The Governments of Zambia and DRC has signed a bilateral agreement to implement and operationalise the Chalwe-Kabila One Stop Border post (OSBP)  The post is under development by GED Africa, an investment and project management company, and is part of the Kasomeno-Mwenda Toll Road Project (KMTR). The wider infrastructure project, sponsored by The Duna Group, consists of the modernisation, construction and expansion of 184 km of road highway, the construction of a 345 m cable-stayed bridge over the border at the Luapala River; construction of a one-stop border post with accompanying warehousing and parking facilities; delivery of a tolling system and associated infrastructure; and social infrastructure. The OSBP agreement was signed by the DRC’s minister of infrastructure and public works, Alexis Gizaro Muvuni and Zambia’s minister of commerce, trade and industry, Chipoka Mulenga.  At the ceremony, Mulenga commented, “We are here today as a demonstration of this Government’s determination to use commerce and trade to stimulate economic growth for improved livelihoods for all our people.” With this now in place, the joint steering committees are able to turn their attentions to developing the operations manual, complete with detailed policies and procedures for implementation. When finally delivered, the post will bring expeditious and standardised border controls that will reduce trade stops, transport costs and transit times. Klaus Findt, CEO of GED Africa, remarked, “In tandem with the monumental bilateral agreement, the successful finalisation of both the Zambian and DRC Private Policing Services Agreements underscores our dedication to upholding traffic laws and ensuring safety and security along...