The African Continental Free Trade Area (AfCFTA) isn’t simply a ‘Free Trade Agreement’; it’s about establishing a unified continental market with 1.2 billion potential customers and where the private sector is a major engine to make it happen. This was the tone from the discussions of the meeting held on 25 April 2019 in Arusha about how the East African Private sector including Small and Medium Enterprises (SMEs) could benefit from the AfCFTA. The one-day meeting, organized jointly between the East African Business Council (EABC) and the UN Economic Commission for Africa (ECA), convened close to 40 key players from the region’s private sector. The office for Eastern Africa of ECA estimates large potential gains from the AfCFTA, including an increase in intra-African exports of Eastern Africa by nearly US$ 1 billion and job creation of 0.5 to 1.9 million. “Together African economies have a collective GDP of 2.5 trillion USD, making it the 8th largest economy in the world. That makes the continent much more attractive to investment, both from within and from outside the continent,” said Andrew Mold, Acting Director of ECA in Eastern Africa. “This should encourage business people to take advantage of AfCFTA and make the investments necessary to sustain economic growth and create employment”. Nick Nesbitt, Chairman of EABC, emphasized the importance of the continent having a clear vision to put an end to the fragmentation of the internal market. “I really applaud everybody who has involved in creating the AfCFTA because their vision is the...

It’s a great privilege to be here and above all a great privilege to have the opportunity for the last hour and a half to meet some of you and to learn from you. I think if there’s one theme that is central to the way that Britain thinks about itself in the world in the future, it’s the theme of humility, the theme of listening to other people, learning from people, working with other people. And I think this is particularly true when we come to probably one of the most difficult intractable and exciting problems in the world, which is the question of unlocking the potential of the African economies. When we talk about economies in Africa – and many of you will have been to these conferences all the time – there is a very strange sense that you lurch from an incredibly optimistic positive vision of where Africa’s going, to suddenly going to the absolute opposite of people being very, very gloomy. And I don’t want to repeat the cycle, but clearly in that tension between these two principles, between the incredible potential of Africa and people’s sense of frustrations, is something there in the centre of this problem which needs to be unlocked. And part of that problem is the question of how you unlock finance and how you unlock money in the centre of those economies. The big picture I don’t want to bore you with because you have heard these ten thousand times...

Kenya on Wednesday called on African countries to embrace mutual recognition agreements for product standards to help spur intra-Africa trade. Betty Maina, principal secretary in the ministry of trade, industry and cooperatives, told an international standards forum in Nairobi that lack of harmonized standards constitute huge non tariff barriers to cross border trade. “Mutually accepted standards for products and services across Africa will reduce the need for duplication of testing when importing and exporting and thus greatly facilitate intra-Africa trade,” Maina said during the 34th International Organization of Standardization (ISO) Committee on Conformity Assessment (CASCO) plenary meeting. She told a two-day event that brought together over 130 delegates representing the ISO member states that mutually accepted standards will help make conformity assessment activities as uniform as possible across industries and the world. Maina noted that conformity assessment plays a vital role in the Kenyan economy because it involves a set of processes that show the product, service or system meets the requirements of a standard. “It provides a tool for managing compliance and providing an objective and defensible means to implement standards thus enforcing national health, safety and environmental legislation,” she added. The Kenyan official noted that on the basis of standards, the East African Community (EAC) has an agreement of mutual recognition of certification marks. Eddy Njoroge, president-elect of ISO, said that the world is getting widely and deeply interconnected making it intimately interdependent, at an alarmingly rapid rate. “As a consequence, standards and conformity assessment have become not...

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...

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....

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...

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...

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....