Trade between Kenya and Tanzania for the year ending November 2021 hit $905.5 million (Sh103 billion) last year according to Central Bank of Kenya (CBK) data. Imports from Tanzania also stood at $501 million while exports hit $403.9 in what has been attributed to resolutions on non-tariff barriers by presidents of Tanzania and Kenya. The two countries have recently mended fences to eliminate barriers hindering the smooth flow of trade and people between along the busy corridor and particularly on the Namanga border. EAC market The most recent spat was in August 2021 when Tanzania government banned Kenyan airlines from its airspace after Nairobi announced passengers from the EAC market would not be allowed to enter Kenya. “Kenya and Tanzania have strong trade ties and the ministry is setting up a Jumuiya Market near the border of Namanga to support cross-border trade. Cross-border trades shall have a stall at the Jumuia Market,” said Irene Musebe from the Ministry of East African Community during an EABC trade facilitation forum at Namanga One-Stop Border Post. Data from the border post shows that trade has improved to 250 trucks compared to 70 trucks in May last year. The two countries signed eight bilateral pacts which included agreements on mutual legal assistance, as memoranda of understanding (MOUs) on immigration, correctional services and animal health. Kenya National Bureau of Statistics (KNBS) data says imports from Tanzania grew from Sh10.8 billion ($96.2 million) to Sh20.5 billion ($182.6 million) as of November last year, with Tanzania’s biggest...

Summary Distribution bottlenecks, food fights with potential customer states, non-tariff barriers and handling challenges hamper intra-EAC food trade. The Food Security and Nutrition Working Group also reports that high food prices and the impact of the Covid-19 pandemic have affected households' ability to buy food. Amid the raging food crisis, some countries, like Tanzania, have food in stores but distribution bottlenecks, food fights with potential customer states, non-tariff barriers and handling challenges maintain the status quo. As the African Union endorsed 2022 as the Year of Nutrition last weekend, seeking to strengthen the continent’s resilience in food security, the UN was waving the red flag about biting hunger in the Horn of Africa, where at least 13 million people are starving. In fact, 50 million people in the larger East African region are at risk of starvation, according to experts. In Ethiopia, in whose capital the AU heads of state and government summit was held last week, some 5.7 million people are affected by severe drought and need food assistance, the World Food Programme (WFP) said. The UN agency noted that three consecutive failed rainy seasons in Ethiopia, Kenya and Somalia, “have decimated crops and caused abnormally high livestock deaths, while shortages of water and pasture are forcing families from their homes and triggering conflict between communities”. “Harvests are ruined, livestock are dying, and hunger is growing as recurrent droughts affect the Horn of Africa,” said Michael Dunford, regional director of the WFP Regional Bureau for Eastern Africa. In Kenya,...

The Africa Continental Free Trade Area (AfCFTA) Secretariat and African Export-Import Bank (Afreximbank) have signed a fund management agreement to raise funding support for party states and commercial entities in the area of trade. As indicated by the secretariat, the estimated fund requirement for uninterrupted implementation of the AfCFTA agreement and to eliminate the adjustment cost is about US$10 billion over the next six years, and this agreement is to help raise funding in that regard. Speaking at the agreement-signing ceremony, Secretary-General, AfCFTA, Wamkele Mene, stated that the secretariat will not be going to World Bank or International Monetary Fund (IMF) for funding support but will depend solely on indigenous funding firms to raise the required amount to successfully implement AfCFTA. “We as Africans cannot continue to go to the World Bank, IMF, and others to finance our own trade as a continent. So, I will rather go cup in hand to Afreximbank, Trade and Development Bank, then go to the others in Europe and other parts of the world for support. We are not going to succeed in the implementation of this trade agreement without Afreximbank. This Adjustment Fund is being introduced because we know that as member countries are implementing tariff adjustment mechanisms, there would be some revenue loses in the short term and we want to ensure that their interest is accommodated. This is where the Afreximbank comes in as the pillar of implementation of AfCFTA by providing this facility of US$1billion, to make sure that we...

Originally published in the World Economic Forum Blog on 13 January 2022. Limited use of technology is inhibiting LDCs' path towards structural transformation. These countries can implement measures in several areas to build their technological capacity. Innovative approaches to resource mobilization should be explored to fund such transition. Structural transformation is the process of moving resources from low productivity to higher productivity and skill-intensive sectors, thereby setting development and economic catch-up into motion. While many countries have achieved structural transformation in a matter of decades, the least developed countries (LDCs) have been notoriously slow in this respect. One of the factors for this lack of structural transformation is LDCs’ overwhelming dependence on commodities for production and exports. According to the United Nations Conference on Trade and Development's Commodities and Development Report 2021, over 75% of African LDCs depend on commodity production for over half of their export earnings, though Asian LDCs have a relatively diversified export basket. The report also suggests that it is extremely challenging to move away from the trap of commodity dependence and attain structural transformation. Fortunately, a combination of technology and global integration can help countries on this path. When it comes to technological advancement and its effective use, the LDCs are at the lower end of the ladder. According to the World Intellectual Property Organization (WIPO)'s Global Innovation Index 2021, which monitors the state of technological advancement in 132 countries, 21 out of the 32 countries in the bottom quartile are LDCs. Of the 22 LDCs ranked altogether, only one (Tanzania) is in the second quartile....

The neighbouring Democratic Republic of Congo has great trade potential with Rwanda, with data from recent years showing growing trade and currently is Rwanda’s biggest regional trading partner. The latest World Bank report on Rwanda themed ‘Boosting regional trade integration in the post-Covid era’ observed that DRC is a growing trade opportunity for Rwanda. Exports have grown considerably in the last decade, analysts said adding that Rwanda exports to DRC are more than to East African Community countries combined. By 2019, Rwanda had exported more goods to the DRC than to the EAC. The main exports to the DRC include livestock and crops, but cross-border trade in services, such as finance, transportation, and wholesale trading, are also important, the report noted in part. Non-EAC neighboring markets have proved to be more dynamic in recent years, the report noted, adding that it’s expected to grow especially in the advent of the African Continental Free Trade Area. This is also at a time when statistics from the World Bank show that since 2012 Rwanda’s exports to the East African Community have somewhat stagnated. Data shows that when Rwanda joined the EAC customs union in 2009, exports of goods to EAC partners more than doubled in the following three years to 23 per cent of the country’s total goods exports. However, since 2012 Rwanda’s exports to the EAC have almost stagnated with Rwanda’s total exports increasing substantially on average 17 per cent per year from 2010-19. Analysts say that this has seen the...

Rwanda registered a strong economic recovery since last year. However, unemployment remains a major issue for moderate productivity jobs, according to the latest Rwanda Economic Update by World Bank Group. The report, released on February 2, was issued by the global institution with an aim of boosting regional integration in the post-Covid era. It indicates that Rwanda’s Gross Domestic Product (GDP) increased by 11.1 per cent in the first nine months of 2021, reflecting a broad-based recovery from the 2020 recession. This is due to the expansion of industrial production which grew by 16.5 per cent and agricultural output which rose to 6.8 percent in the same year, while traditional exports (coffee, tea, cassiterite, wolfram, and coltan) increased by about 35 per cent in the first nine months of 2021. In 2020, according to the National Bank of Rwanda, the economy fell by 3.4 percent, representing the first economic slump since 1994. The factor for such an economic slump is the Covid-19 pandemic, including measures to control it, such as lockdowns that sharply reduced economic activities in 2020. However, the economy was projected to grow by 10.2 per cent in 2021, after being revised from what was initially 5.1 per cent. Despite the significant financial packages such as the Economic Recovery Fund, which were sunk into different sectors, the report observed that that the level of unemployment continued to slump, women being the most affected. “While the GDP got close to the pre-pandemic level, the unemployment rate remained more than...

Summary More often than not, the barriers are imposed with be objective of protecting the imposing country’s producers of the traded goods, mostly for the domestic market. Non-tariff barriers include – but are not limited to – import quotas/bans, subsidies for domestic producers, protectionism and other technical barriers. A recent dialogue between major business stakeholders from both the public and private sectors of the economy established that trade barriers are still a major challenge within the East African Community (EAC). The event, which was conducted at the Mutukula border crossing between Tanzania and Uganda, was jointly organised by the East African Business Council (EABC) and Trade Mark East Africa (TMA), and brought together some 50 participants. What with one thing leading to another, the dialogue definitively concluded that both tariff and non-tariff trade barriers (TTBs and NTBs) continue to be a real barrier not only to cross-border trade, but also to intra-regional investment flows within the six EAC member countries of Tanzania, Kenya, Uganda, Rwanda, Burundi and South Sudan. Apparently, these negative developments are continuing in the regional economic integration bloc despite recent efforts by national governments – acting either singly or jointly in some cases – to alleviate the adverse situation, doing so mainly through policy and regulatory interventions. Generally speaking, trade barriers come in the forms of tariff or non-tariff measures that are imposed by national governments with the major purpose of restraining trade with other countries. More often than not, the barriers are imposed with be objective...

​​​​​​​THE latest statistics show that Tanzania-Rwanda’s total bilateral trade has hit $274.6m calling for action to further address barriers that are still in existence to boost the free movement of goods and people between the two countries, the East African Business Council (EABC) has stated. This was said last week during the public-private dialogue that gathered officials from the Ministry of EAC Foreign Affairs, Ministry of Trade and Industrialization, trade facilitation agencies, importers, exporters, transporters & freight forwarders, and women cross-border traders at Rusumo One-Stop Border Post. The dialogue was organized by The East Africa Business Council (EABC)-the regional apex body of Private Sector associations and corporates in East Africa and Trade Mark East Africa (TMA) to assess challenges being faced by cross-border traders. “Prior to Covid-19, Rusumo One-Stop Border Post used to clear 400 trucks daily,” The East African Business Council (EABC) CEO, John Bosco Kalisa said. Tanzania’s exports of goods to Rwanda have hit $269.6million while Rwanda’s exports to Tanzania have reached $5 million according to the International Trade Centre. Kalisa urged the United Republic of Tanzania to fast-track the use of national identity cards as a travel document to ease the movement of cross-border traders across the East African Community region. “Travellers and business people from Rwanda to Tanzania are required to have passports and laissez-passer as travel documents. Tanzania doesn’t accept national identity cards like other EAC members. This is still a barrier to the free movement of goods and people in the region,” he said,...

Summary The ambitious blueprint – which is a brainchild of the Tanzania Horticultural Association (Taha) – was launched during the Horticulture Business Forum and 15th Taha’s Annual General Meeting in Arusha at the weekend. Arusha. Tanzania has rolled out a new grand strategy that will see the value of horticultural exports ballooning to $1 billion annually by 2026. Netting the economy $779 million annually at the moment, horticulture strategically offers Tanzania a long-term potential to create decent jobs, generate windfall foreign exchange and boost the the country's poverty reduction reduction efforts. The ambitious blueprint – which is a brainchild of the Tanzania Horticultural Association (Taha) – was launched during the Horticulture Business Forum and 15th Taha’s Annual General Meeting in Arusha at the weekend. Gracing the event, Agriculture Minister Hussein Bashe directed his aides to work with the private sector to convene a national horticultural conference to deliberate the strategy - and consider adopting it. The minister underlined the horticulture industry as central to the country’s economy, livelihoods and poverty reduction, particularly for women and youth. The 45-page grand strategy seeks the joint efforts from public, private sectors and development partners to open up regional and international markets for horticulture in the coming five years. Mr Bashe told stakeholders that his eyes were now set to unlock the $133 million worth Chinese avocado market with 1.4 billion consumers, after the two key markets of India and South Africa were recently opened up to bolster bilateral trade ties and bring higher returns...

These include visual and performing arts, crafts, cultural festivals, photography, music, dance, film, fashion, video games, digital animation, publishing, architecture, and more. Africa’s Free Trade Area (AfCFTA) is expected to be a boon for the creative sector and generate jobs for the youth. On 1 January 2021, trading under the African Continental Free Trade Area (AfCFTA) kicked off. The trade pact, which seeks to create a single market for goods and services and promote cross-border movement of capital and people, should boost intra-African trade — currently at only 18 per cent—and regional integration. It is also expected to be a boon for the creative sector. Key players in the creatives industry said as much when they met in Kigali, Rwanda, in 2019, even before the trade area launched. “We wanted to deconstruct the AfCFTA,” said Josh Nyapimbi, Executive Director of Nhimbe Trust, a pan-African creative civil society organization based in Zimbabwe, adding that the creative and cultural industries can “leverage the agreement to advance our economies.” Similarly, Wamkele Mene, the Secretary-General of the AfCFTA Secretariat, has emphasized the need for youth involvement in cross-border trade through the creative industry and technology. He says that the active participation of young people in the free trade area could boost jobs creation and catalyze economic development. Africa’s creative sector is diverse and includes visual and performing arts, crafts, cultural festivals, paintings, sculptures, photography, publishing, music, dance, film, radio, design, fashion, video games, digital animation, architecture, and advertising, according to the UN Conference on...