News Categories: Burundi News

How to Unlock Africa’s $3 Trillion Free Trade Opportunity

$3tn GDP growth opportunity if the African Continental Free Trade Area (AfCFTA) is fully implemented Biggest potential economic gain and business opportunities will be from from growth in trade between African nations Countries with open economies and significant cross-border trade set to benefit most quickly South Africa, Ghana, Côte d'Ivoire, Kenya and Morocco will grow most from AfCFTA Conflicts with older regional free trade agreements a major hurdle Manufacturing among sectors with biggest growth opportunities Success dependent on African countries putting rules, regulations and mechanisms in place around Rules of Origin, digital payments and the elimination of non-tariff barriers. New research from global law firm Baker McKenzie and Oxford Economics – AfCFTA's US$ 3 trillion Opportunity: Weighing Existing Barriers against Potential Economic Gains - shows that if fully implemented, the African Continental Free Trade Area (AfCFTA) will unlock significant but uneven growth opportunities on the continent. The African Union is putting the Africa Continental Free Trade Area (AfCFTA) into operation. It will be the world's largest free trade area by number of countries and is so far in force across 27 countries. Open economy key to success Some countries are currently better placed than others to reap the rewards of intraregional trade and numerous obstacles mean that the tangible benefits of the agreement will likely only be realized from 2030. The report finds countries with good existing trade integration with their neighbours and which have open economies are most likley to benefit economically from lower trade tariffs. For example, South...

AfCFTA a stepping stone for huge investments in Africa – Songwe

Vera Songwe, the Executive Secretary of the UN Economic Commission for Africa (UNECA), on Tuesday last week opened the 23rd meeting of the intergovernmental committee of senior officials and experts from 14 eastern African countries in Asmara, Eritrea insisting on the importance of increasing regional trade and implementing the African Continental Free Trade Agreement (AfCFTA). Leveraging new opportunities for regional integration was the theme of the ECA annual meeting. In the eastern trading Africa bloc, she said, the implementation of the continental free trade agreement could result in $1.8 billion welfare gains and creation of 2 million new jobs. The New Times’ James Karuhanga caught up with Songwe to talk about, among others, why the historic agreement is not just another trade agreement, what the meeting’s host country – which was hosting the meeting for the very first time – has to offer, and the importance of the continent’s aspirations for peace and harmony. Excerpts: In the discussions on leveraging new opportunities for regional integration in eastern Africa, the AfCFTA keeps coming up again and you particularly emphasised that this is not just another trade agreement. Why? Like I said, this is not just another agreement because it actually is, if it is taken right, a stepping stone for huge investment compact for the continent. The Continental Free Trade Area Agreement is, on paper, a policy statement but I think when you translate that policy statement into actuality, it means that we need to create industries, develop infrastructure, build roads, make our airlines...

Museveni urges African countries to promote trade

President Yoweri Museveni has urged African countries to promote trade as one of the strategies that will ensure the survival of the continent and the prosperity of the people. “Today, Africans must know that trade is a matter of survival. If you don’t trade, you will collapse because prosperity comes from trade,” he said. The President was opening the Uganda-Democratic Republic of Congo (DRC) joint Business Forum at Munyonyo that is running under the theme ‘Promoting Bilateral Trade for Mutual Peace and Prosperity’. The one-day conference was attended by business delegations from  Uganda and neighbouring Democratic Republic of Congo (DRC) as well as the line Ministers from the 2 countries. It is taking place as DRC President  Felix Tshisekedi starts a two day state visit to Uganda. The Governor of Beni in the DRC, Nyonyi Bwanakawa and that of Ituri also in the DRC, Jean Bamanisa Saidi, among others, were also present at the business forum. President Museveni, who warmly welcomed the DRC delegation to Uganda informing them that we are one people divided by the colonial boundaries, said trade in the region started  very many years ago. “Congo and East Africa have been trading since time immemorial,” he observed. The President cited products that were being traded from the Indian Ocean coast such as textiles, glass, beads and guns in exchange with the interior areas that included such products like copper, ivory, iron and cows. Museveni asserted that by facilitating trade, a number of challenges are resolved including job creation,...

Afreximbank ready to partner with African banks to boost their capacity

Amr Kamel, the executive Vice President in charge of Business Development and Corporate Banking at the African Export-Import Bank (Afreximbank), has said they are ready to work with African banks and bankers and to ensure that the banks are well-equipped to deal with the risks in financing trade under a difficult politico-economic environment and changing trade counter-parties. Kamel was speaking at the Afreximbank Trade Finance Seminar and Workshop which was attended by more than 200 participants, including senior executives from African banks, financial institutions, regulatory institutions. It was organised by Afreximbank in collaboration with the South African province of Kwazulu-Natal. The training had been structured to ensure that participants acquired the capacity to structure bankable trade finance deals of varying levels of complexity, he stated. “As Banks, we all play a critical role in promoting trade,” said Mr. Kamel. He said that 2019 would go down as a watershed in Africa’s history, being the year when the continent came together to affirm its commitment to addressing its economic and social problems through the launch of the operational phase of the African Free Trade Continental Agreement (AfCFTA). “This should provide traders across Africa with preferential trading arrangements to enable them to enhance the level of intra-African trade and enhance economic growth for our countries,” he said. Also speaking, Sihle Zikalala, Premier of KwaZulu-Natal Province, said that the province aimed to position itself as the gateway to South Africa and the entire Southern African region. It aspired to act increasingly as a...

COMESA, TMA sign MoU to promote trade in the region

COMESA and Trade Mark East Africa (TMA) have signed a Memorandum of Understanding (MoU) to promote trade in the region by removing obstacles that impede the smooth flow or trade among the Member States in the region. Working closely with international and regional organizations, such as Trade Mark East Africa, national institutions, the private sector and civil society organizations, this will enable promote trade by unlocking the economic potential of the COMESA region through increased physical access to markets, enhanced trade environment and improved business competitiveness. The MoU marks an important milestone in providing a framework of cooperation and partnership between the two organizations in areas of common interest. These include market access, development or border post infrastructure, improvement of trade environment through trade facilitation and inclusion of the private sector as key players in economic development. The pact was signed by the Trade Mark East Africa Executive Director Frank Matsaert and COMESA Secretary General Chileshe Mpundu Kapwepwe at the COMESA Secretariat. "We are getting into this partnership to ensure that through policy formulation, creation of trade facilitation tool which are automated as well as standards and non-tariff barrier (NTB) removal so that business people, whether SMEs or large enterprises get the benefits," Mr. Matsaert stated. Secretary General indicated that jointly, COMESA and TMA will implement trade facilitation initiatives in the region through application or respective regional and international instruments. In particular, support will be provided to Member States to implement the World Trade Organization Trade Facilitation Agreement. The partnership between the two...

EA economy to grow by 6.4pc

Asmara. Economy in the Eastern Africa, which is one of the fastest growing regions, is projected to grow by 6.4 per cent this year, despite facing some major risks. The 14-member region, which has been growing by 6.6 per cent since 2014, faces domestic and global economic risks, but the United Nations Economic Commission for Africa (UNECA) says the countries have recorded improvements in agricultural production and sustained infrastructure investment which sustained growth and will continue to do so. The resolution of the political conflict between Eritrea and Ethiopia is also expected to provide a boost to growth in the Horn of Africa. Experts at the 23rd meeting of the intergovernmental committee of senior officials say the countries should now focus on regional cooperation to accelerate their economies. One of the challenges reported is weak trade between the countries with the East African Community (EAC) mentioned to have half of its potential. “Cross border problems affecting the region need a cross-border answer. Enhanced regional cooperation is needed to make regional growth more sustainable and inclusive,” said Mr Andrew Mold, the acting director for the ECA in East Africa who presented an analysis of the macroeconomic situation. Ethiopia, Rwanda and Tanzania are top three countries with the fastest growth rate of the Gross Domestic Product (GDP). The region is also said to have a challenge of debts with Kenya and Ethiopia mentioned staying atop the list. Besides, climate change was identified as another major challenge as the eastern Africa still suffers...

African customs body says African free trade arrangement not to affect revenue

The World Customs Organization of East and Southern Africa on Wednesday dispelled fears that the coming into effect of the African Continental Free Trade Area (AfCFTA) agreement was likely to affect revenue collection among countries in the African region. Larry Liza, director of the customs organization in charge of building capacity said countries will need to put in place implementation measures and legal frameworks aimed at protecting revenue collection. He said there was need for countries to look at a broader picture on what benefits were expected to be accrued from the agreement. "The market may seem to affect revenue collection, but the agreement is expected to be more beneficial to society through increased trade facilitation and business opportunities," he is quoted as saying by the state-run news agency, the Zambian News and Information Service (ZANIS). According to him there was no need for stakeholders to be agitated with the impending implementation of the agreement, adding that it will allow the business community to have access to foreign markets. Source: Xinhau

Enlarging Group of AfCFTA State Parties Crucial Ahead of Operationalisation

With the African Continental Free Trade Area (AfCFTA) set to officially start operating from July next year, there is need for concerted efforts to enlarge the group of State parties under the agreement in excess of the current 28 countries that have so far deposited instruments of ratification. Enlarging the group will see the continent creating a much bigger market that will ensure intra-African trade delivers, in particular by contributing to the continent's industrialisation and structural transformation processes thereby creating more job opportunities and reducing poverty along the way. This was said Tuesday by Stephen Karingi, Director of the ECA's Regional Integration and Trade Division, at the ongoing 23rd Meeting of the Intergovernmental Committee of Senior Officials and Experts (ICSOE) for Eastern Africa in Asmara, Eritrea. "To operationalize the AfCFTA, we need to finalize the remaining critical components like goods schedules and rules of origin. We also need to enlarge the group of State parties and to create institutions, establish operative mechanisms, and introduce obligations into law and regulation to effectively implement the AfCFTA," said Mr. Karingi. He said Africa also needs to take complementary measures to maximize benefits, in particular following AfCFTA national strategies; conclude Phase II negotiations, especially competition policy, intellectual property rights, and investment, and use the AfCFTA as a vehicle for achieving the African single market. Mr. Karingi said following the implementation of the AfCFTA, based on the sole reduction of tariffs on goods, Africa's GDP would increase under all scenarios. In preparation for July 2020,...

African Free Trade Can Create 2 Million Jobs, Doubles Growth

The east Africa region, the fastest growing sub region on African continent, needs to implement the African Continental Free Trade Area (AfCFTA) agreement to create jobs for 8.5 million youth in the sub region entering the job markets every year. “The struggles that we see today in terms of achieving growth and creating jobs for our youth could be something of the past if we actually work together to exploits the benefits of the free trade area agreement,” said Vera Songwe, UNECA Executive Director of UNECA. She made the statement this morning in Asmara, Eritrea addressing the 23rd meeting of the Intergovernmental Committee of Senior Officials and Experts (ICSOE). “We know because of the analysis that we do at the UNECA that the African Continental Free Trade agreement stands to deliver about $1.8 billion worth of additional revenue to the continent ad can create about 2 million jobs a year,” she said. The experts are gathered from the 14 countries found in the east Africa sub region namely, Eritrea, Ethiopia, Democratic Republic of Congo (DRC), Kenya, Uganda, South Sudan, Madagascar, Tanzania, Burundi, Comoros, Djibouti, Rwanda, Seychelles and Somalia. The fastest growing The United Nations Economic Commission for Africa (UNECA) predicts that East Africa sub region will grow at 6.5% by 2020. “This is the fastest sub-region on the continent [Africa]. Today this east Africa region is growing at 6.4%. We expect it to grow at 6.5% by 2020. The overall continent is growing at only 3.4%,” she said, in her...

Stakeholders launch Ksh.95B project to boost Africa’s coffee industry

The Inter African Coffee Organisation (IACO) has joined forces with the Centre for Agriculture and Biosciences International (CABI) and the International Coffee Organization (ICO) to launch the Ksh.95 billion ($950 million) ‘Africa Coffee Facility’ (ACF) to boost Africa’s coffee industry and achieve a 40 percent increase in high-quality exports worth $5 billion a year. The ACF is projected to transform Africa’s coffee production – currently 10 percent of the global coffee market – into a vibrant and resilient industry again. Coffee is a primary source of income for more than 12 million households in Africa and contributes a significant proportion of tax income in a number of these countries. The largest annual export value of African countries is recorded by Ethiopia at $762.8m annually, followed by Uganda ($468.4m), Kenya ($229.5m) and Tanzania ($129.2m). Speaking at the event, Agriculture Cabinet Secretary Mwangi Kiunjuri said, “We need to build the capacity of our smallholder producers as well as revamp our producer organizations, empower women and the youth through entrepreneurship development. This includes a value chain transformation from a subsistence to an entrepreneurial orientation among our farmers.” This year the Government of Kenya allocated 3 billion Kenya Shillings (equivalent to USD 30 million) towards supporting coffee producers. Dr. Fred Kawuma, Secretary General of the IACO, said, “Africa produces some of the highest-quality and much-loved coffee in the world but its contribution to the global coffee trade has declined significantly since the 1970s when nearly a third of all coffee was produced on the continent.”...