As ratification of the new U.S.-Mexico-Canada trade agreement (USMCA) moves forward slowly, a landmark free trade agreement has been signed several thousand miles away on the continent of Africa. While 52 African nations signed the African Continental Free Trade Area (AfCFTA), to date 24 have ratified the agreement (22 were needed to actually bring the agreement into force). The AfCFTA breaks new ground and ushers the continent towards being a more seamless and frictionless trade region. Though it could be argued that these African nations are largely underdeveloped, the collective GDP of all the 55 states in Africa accounts for a staggering $3 trillion, making it the fifth-largest trade front in the world. This is excellent news for the U.S., as the African nations coalescing into a single trade region will greatly help in expediting unified trade deals, rather than developing tailor-made trade agreements with individual countries across the continent. The timing of this development also suits U.S. interests, coming at a time when there is an escalation of trade tariff exchanges between the U.S. and China. Over the last decade, Africa has become the hotspot for investment, with superpowers like Russia and China channeling billions of dollars to gain a strategic foothold on the continent. Beijing has been especially aggressive, investing heavily in Africa to widen its Belt and Road Initiative (BRI) that aims at reviving the ancient Silk Route and also extend much further to account for all major trading partners of China. The U.S. has accused China of using...

Lest we forget, it was on November 30, 1999 at Sheikh Amri Abeid Memorial Stadium in Arusha, Tanzania that three heads of state (of the Republic of Uganda, the Republic of Kenya and the United Republic of Tanzania) put pen to paper and signed the treaty that revived the EAC. Again, to jog our memory, the EAC had earlier been established from 1967 and it collapsed 10 years later in 1977. The current EAC 20-year journey has been remarkable, the inevitable challenges notwithstanding. The framers of the treaty that established the EAC envisaged a community that would be anchored on four pillars. This is aptly captured in Article 5 where the partner states undertook “to establish among themselves, a Customs Union, a Common Market, subsequently a Monetary Union and ultimately a Political Federation.” The partner states have signed and ratified three protocols in line with these pillars. Implementation of these protocols is at various stages with a commendable degree of success. The pillars are very crucial forerunners to the ultimate goal of political federation. Thus, in 2017, the EAC heads of state agreed on political confederation as a transitional model to full East African Political Federation. All the partner states have, accordingly, nominated experts and set up a team that is currently working on the confederation constitution. Uganda’s former Chief Justice Benjamin Odoki and Makerere University’s Prof Murindwa Rutanga are part of this team. When asked to highlight the salient achievements of the 20-year EAC integration, one is spoilt for choice....

The African Continental Free Trade Area’s (AfCFTA) entering into force is a laudable development, building on existing initiatives for regional integration and laying the groundwork for more. The immense support from countries and leaders across the continent is merited. At the same time, however, AfCFTA’s strong political backing and the excitement surrounding its rapid progress has led to some claims of its potential benefits going unchallenged, particularly surrounding intra-African trade gains. Most commentators appear reluctant to interrogate publicly a popular pan-African project, even when this analysis might be constructive. This is a problem because a misleading impression has been created that signatory countries should soon enjoy the benefits of improved trade levels. Specifically, following repeated citations by international organisations and the media, the estimate that AfCFTA will lead to a 52.3% increase in intra-African trade by 2022 is now widely taken as a given. The African Union quotes this figure as if it were fact, while the UN Economic Commission for Africa (UNECA) and the United Nations Conference on Trade and Development (UNCTAD) suggest such an eventuality is “likely”. The statistic has been repeated frequently by dozens of news outlets, from Al Jazeera to Fortune. Though seldom cited, this number comes from a paper presented in 2012 by two UNECA specialists to the 7th African Economic Conference. And, importantly, the report’s authors make clear that their projection of a 52.3% increase by 2022 – compared to a 2010 baseline – is based on several assumptions: a fully-liberalised and continent-wide trade area by 2017; harmonisation of external...

The World Trade Organisation (WTO) has partnered with the Common Market for Eastern and Southern Africa (Comesa) to harmonise standards with a view to increasing market access of agricultural produce in the region. Kenya is second after Uganda to start implementing the project whose inception meeting and high-level stakeholder dialogue will take place this week in Nairobi. The events bring together experts from the private sector, relevant public sector departments and institutions of government to build consensus on the most critical investments. Trade PS Chris Kiptoo said the variation of standards in the Comesa countries and the continent undermines the region’s capacity to trade with itself. “The diversity of strengths and weaknesses on the continent demands greater collaboration between countries that belong to the same Free Trade Area,” he said. Dr Kiptoo said compliance with standard measures opens export opportunities for producers and exporters, at the intra-regional and international levels. For Kenya, he said, the subject of sanitary and phytosanitary standards is a crucial element of trade policy. The project, which entails mainstreaming of SPS priorities into national policies, is supported by the Standards and Trade Development Facility (STDF), an agency of the WTO. The project covers Uganda, Rwanda, Ethiopia and Malawi. It is being implemented under the Prioritising SPS Investments for Market Access framework, an initiative of the STDF. Intra-Comesa trade remains lower than other regions, at around 11 percent of total Comesa exports with the majority of traded products being of low added value. Comesa director of Agriculture...

A team photo taken at VCC’s booth. (From left to right) Mr Sivam K., Business Development Director of VCC, Mr George Chan, General Manager (Africa) of VCC and Mr Viboon Chaojirapant, Product Development Director of VCC Facilitating Cross-border Trade with CamelONE™ The three-day World Customs Organisation IT/TI Conference and Exhibition was held at the capital of Azerbaijan, Baku. Around 900 delegates from 90 countries attended this event. The theme for this year is “New technologies for SMART borders – New opportunities for Trade, Travel and Transport”. Delegates were encouraged to explore different ways to achieve seamless and secured cross-borders trades. During the Tech Talk session, our Product Development Director, Mr Viboon Chaojirapant, shared about the importance of cross-border transit trade. VCC is also actively involved in the Single Customs Territory (SCT) Project which is funded by TradeMark Africa. One of the key objectives of this project is to provide a seamless flow of goods to enhance East Africa Community (EAC) trade. Lastly, Mr Viboon Chaojirapant also shared about the CAREC Advanced Transit System (CATS) and Customs Information Common Exchange (ICE) trade facilitation projects. CATS and ICE are two of the five priority areas identified by the CAREC Customs Cooperation Committee. CATS helps remove regional transit impediments while ICE establishes a data exchange mechanism. The Tech Talk session gave the delegates a better understanding of VCC, our solutions and also insights about cross-border trade. Many delegates went over to VCC’s booth after the session, to speak to Mr Viboon Chaojirapant to...

Kenya will host the Source 21 Common Market for Eastern and Southern Africa (COMESA) International Trade Fair and high-level business summit from July 17 to 21, organizers said on Thursday. Sandra Uwera, CEO of COMESA Business Council, told journalists in Nairobi that the forum will bring together the policymakers and the private sector from the 21 COMESA member states who are the drivers of trade and economic development "It will include a presidential dialogue where heads of states will interact with business leaders on key strategies to enhance industry competitiveness and formulate strategies to enhance local sourcing and intra-regional trade," Uwera said. She added that the sectoral roundtables will also provide a platform for engagement on sector-specific issues. "The topics will be centered on manufacturing competitiveness, digitalization and trade facilitation, digital financial services and regional payment systems, standards and quality issues, smart and sustainable cities and the continental free trade area," the CEO. According to the organizers, the platform will also be a forum to address some of the key impediments affecting businesses in cross-border trade as well as promote industrial growth and competitiveness. Source: Xinhaunet

Trade experts from the Common Market for Eastern and Southern Africa (COMESA) are meeting in Nairobi this week to discuss ways to address industrial disparities in the region. The experts said the implementation of the COMESA Industrial Policy, which was adopted by COMESA Council of Ministers in 2015, is expected to provide the pathway towards addressing the growth gaps that exist on the supply-side such as low-value addition, low employment rates and weak cross-border trade volumes. Betty Maina, Principal Secretary in charge of industry at Kenya's Ministry of Industry, Trade and Cooperatives who opened the meeting late on Tuesday said a robust GDP growth of near 6.5 percent in the region has not led to economic transformation. Maina said this disparity has resulted from preoccupation with low value-added products and trading in primary products and natural resources. "Despite regional integration being of special importance in Africa, COMESA member states still trade more than 90 percent with other parts of the world due to lack of industrial diversification and products' complementarity among themselves," said Maina. Maina said the affected products are mainly those with few forward and backward linkages to the rest of the economy. The three-day meeting will thus discuss the draft action plan of the implementation on the COMESA Industrial Policy and review the COMESA regional guidelines on the local content policy. "The low level of intra-COMESA trade, which has not broken the 10 percent threshold of total exports over the years, is a reflection of a low level...

East Africa remains a top destination for foreign direct investment, with new data for 2018 showing that the region attracted inflows of $4 billion. The latest World Investment Report 2019 by the United Nations Conference on Trade and Development shows that despite flat growth in FDI in the larger East Africa, which remained largely unchanged at $9 billion due to contractions in Ethiopia, the East African Community partner states recorded impressive growth. In Uganda, inflows reached a historic high, increasing by 67 per cent to $1.3 billion, while Kenya posted a 27 per cent growth to $1.6 billion. In Tanzania, inflows grew by 18 per cent to $1.1 billion. During the year, investment flows were channelled to diverse industries, with manufacturing, chemicals, hospitality and oil and gas being the main attraction for foreign investors. Inflows to Ethiopia contracted by 18 per cent to $3.3 billion, although the country remains the biggest FDI recipient in the region, with investments in petroleum refining, mineral extraction, real estate, manufacturing and renewable energy. “Prospects in Ethiopia remain positive due to economic liberalisation, investment facilitation measures and the presence of investment ready special economic zones,” says the report. The report shows that Africa escaped the global decline in FDIs as flows to the continent cumulatively rose to $46 billion in 2018, an increase of 11 per cent. Flows to sub-Saharan Africa increased by 13 per cent to $32 billion. GROWTH The growth in Africa was attributed to rising demand for commodities that saw commodity prices surge. Africa...

President Paul Kagame has expressed his confidence that Africa will soon expand the horizon of opportunities through the recently established African Continental Free Trade Area (AfCTA). AfCTA will be formally launched next month at the African Union Summit in Niger. While attending the opening ceremony of this year’s European Development Days (EDD) under the theme “Inequalities: trends and challenges in the context of globalization, Kagame said that Africa is still lagging behind in the Sustainable Development Goals (SDGs) implementation. In this Kagame said that there is more work ahead but all in all Africa is ready to kick start the deal but with a call for external collaborative help. “It is more imperative than ever that developing countries take more effective lead of their general development agenda, as well as raising the level of prosperity. It is not something that can be done by external actors alone,” Kagame said. This was not the first time the president attends EDD. Kagame participated in the 2017 and 2018 sessions with various leaders including the Belgian PM Charles Michel, and Jean-Claude Juncker, President of the European Union Commission. In the previous meets, Kagame also reminded global leaders of the need for Africa and Europe to see each other as partners and friends rather than foes. This year, Kagame acknowledged that there has been an increasing understanding and acceptance by development partners of the need for those on the receiving end of assistance to drive their own development agenda. Using the Rwandan example, Kagame...

Somalia has joined DR Congo in seeking to join the fast-growing East African Community. The community currently consists of six nations namely; Kenya, Tanzania, Uganda, Rwanda, Burundi, and South Sudan. Somalia has been pushing to join the bloc since 2013 when it presented its application to the EAC secretariat. In July 2018, the Horn of Africa nation secured a place in the Common Market for Eastern and Southern Africa (COMESA), a free trade zone comprising of 21 African nations. Since joining COMESA, Somalia’s standing on the continent has improved. The move has taken it a step closer to gaining membership in the East African Community. DR Congo submitted their official request to join EAC on 8th June through a letter addressed to the leader of the community President Paul Kagame. The country has a wealth of natural resources such as cobalt, gold, diamond, copper, and oil which could drive economic growth in the region. DR Congo already shares strong trade ties with most East African countries like Kenya, Uganda, Rwanda, and Tanzania. By allowing the two countries into the East African bloc, the region will benefit from a large consumer market comprising of over 235 million residents up from roughly 150 million people currently found in the EAC. Additionally, intra-regional trade is set to increase with the addition of new members into the community. Somalia’s long coastline along the Indian Ocean is also likely to contribute to the economic expansion of the East African region. Even with the huge economic potential in...