African development hinges on a maddening paradox: its greatest asset—the sheer size and diversity of its landscape—is also the greatest barrier to its development. Landlocked countries are cut off from ports, and the difficulty of moving goods from country to country weighs down intra-continental trade (only 15% of African trade is within Africa. (African Development Bank, 2017) African consumers bear the brunt of these difficulties. [1]. Costs are driven up by a host of factors: tariffs, border delays, corruption. But the biggest challenge is that no streamlined transport route exists between West and East Africa – only a decaying and underdeveloped road and rail system which pushes up costs and drags down efficiency. Several ambitious schemes have been proposed to link Africa’s east and west coasts, some of which are closer to full realization than others. Most notable in this respect is a plan to expand the existing Trans-African Highway 5 (TAH5) into a true cross-continental road and rail link, the early stages of which China has helped bring to fruition where Western consortiums failed. Likewise, Chinese investment in African infrastructure through Beijing’s ambitious Belt and Road Initiative (BRI) may help create expanded sub-regional linkages, particularly in East Africa, that could help facilitate the emergence of an eventual, true East-West link in the long term. However, in the short-to-mid-term, the obstacles to a truly robust set of East-West transport links are formidable, and it is unlikely that China’s involvement will be a panacea. Long March to the Red Sea Portions...

Some 73 companies are on track for expedited payment of refunds and reduced customs security checks after they enrolled in an East African Community (EAC) programme to promote regulatory compliance, enhance trade and improve border security. The firms will reap other benefits of the programme, named Authorised Economic Operators (AEO), including automatic passing of their declarations and will undergo no physical examination of goods except where risks are high, among others. The incentives apply to multinationals as well as small and medium enterprises (SMEs) that have joined the programme. 73 companies Among private sector organisations to benefit from the AEO programme are Mitchel Cotts Freight, Mzuri Sweets Ltd and Umoja Rubber. “Seventy three companies have so far been enrolled in the programme since it was introduced over three years ago. The EAC targets to enrol over 500 companies in the next five years,” said Duncan Karari, Communications Manager at German international development organisation GIZ which provides technical support for the initiative. GIZ is also supporting the EAC integration process and its development goals. Mr Karari said the programme is headed for roll-out. Regional customs The AEO initiative — launched to reform regional customs services — targets more than 500 companies, indicating that over 400 more are expected to join in due course. Under the scheme, firms involved in international trade are scrutinised and certified as AEO. The programme is open to all players including clearing agents, revenue authorities and standards bodies. The programme is expected to reduce the cost of doing...

Lusaka – Calls for regional integration and boosting of economic growth in Africa will remain unanswered unless all countries strive to fulfil agreements to the letter unlike piece-meal legislation, a leading economist has noted.  In recent years, several African economic blocs – the Common Market for Eastern and Southern Africa (Comesa), East African Community (EAC) and Southern African Development Community (SADC) ‑ have signed and adopted various agreements relating to trade but a few, or none, have been ratified and operationalised. Key among the trade agreements that have been signed and not ratified are the Comesa Free Trade Area (FTA) and the recently signed Continental Free Trade Area (CFTA) in which 44 African countries signed various agreements during the just-ended AU Summit in Rwanda but remain to be ratified. Sindiso Ngwenya, the Comesa Secretary-General, noted that while there has been a zeal to append signatures on various trade treaties, the majority of agreements still remain on the shelves, unratified to make them fully operational and bolster intra-trade growth in the 54 member states. In an interview with The Southern Times in Lusaka, Ngwenya, the outgoing chief administrator of 25-year-old Comesa, noted that while there has been increasing zeal for countries in various groupings to sign agreements and necessitate their operationalisation, many have remained on the drawing board, incomplete because they are not ratified to the letter. Twenty-two countries out of 26 signed the COMESA-EAC-SADC Tripartite Free Trade Area (TFTA) Agreement, Botswana being the latest signatory to the agreement, after signing...

Africa’s textile industry may be caught in the crosshairs of US president Donald Trump’s global trade war. In reaction to Rwanda raising tariffs on used clothing and footwear from the US, the Trump administration says it will suspend duty-free privileges on eligible Rwandan clothing—a benefit of the African Growth and Opportunity Act (AGOA)— within 60 days. US Trade Representative’s office says a suspension rather than a termination of the benefits will “allow for continued engagement with the aim of restoring market access.” Other East African countries, including Tanzania and Uganda, have been spared a similar fate as, according to the trade office, both countries have “committed not to phase in a ban” for second-hand products. Last year, Kenya also backtracked on the 2016 decision from the East Africa community nations to ban used clothing by 2019. The move is an extension of Trump’s “America First” stance seen in the ongoing tariff battle between the US and China. But the Trump administration is being lobbied by the Secondary Materials and Recycled Textiles Association, which says a ban will lead to the loss of 40,000 US jobs and negatively impact the environment with pounds of textile waste ending up in landfills. For its part, Rwanda says the withdrawal of its AGOA benefits are “at the discretion of the United States” and has given no indication of reversing the tariff hike on used clothes from the US. The looming threat of a withdrawal of AGOA benefits is fueling pending conversations about the second-hand...

Twenty years ago, I hoped for an Africa that would draw closer and forge forward boldly, despite a bag of mixed fortunes. Rwanda had just been blighted by genocide; the ubiquitous coup d’état still reared its ugly head in West Africa; although a tentative calm prevailed in Central Africa, political tensions simmered below the surface; Zaïre was in the throes of the ‘first Congo war’; the civil war in Somalia grew in magnitude and intensity; Ethiopia began an experiment in state-led macroeconomic planning; a democratic South Africa rose from the ashes of Apartheid, a veritable validation of the OAU’s ultimate goal of political liberation for Africa. An interim period of positive change ensued, a growth fuelled by new media including the Internet, greater multiculturalism and a stronger attachment to democratic principles. In March 2018, 44 of the 55 African Union Heads of State and Government enacted the African Continental Free Trade Area agreement (CFTA) in Kigali, Rwanda at its 10th Extraordinary Session, under the able leadership of H.E. President Mahamadou Issoufou of Niger, with H.E. President Paul Kagame of Rwanda as current AU Chairperson and H.E. Moussa Faki Mahamat, Chairperson of the AU Commission. Once in force CFTA will be the largest trade zone in the world, increase intra-African trade by 52% by the year 2022, remove tariffs on 90% of goods, liberalise services and tackle other barriers to intra-African trade, such as long delays at border posts. The end of colonialism in the early 1960s created 55 African countries...

NAIROBI, April 4 (Xinhua) -- East Africa's bloc on Wednesday lauded Kenya for being one of the first countries to approve the framework establishing the African Continental Free Trade Area (AfCFTA) which will create a single market for goods and services in the continent. The Inter-Governmental Authority on Development (IGAD) said the quick approval of the bill to ratify the AfCFTA demonstrates the strong political will of the Kenyan government to strengthen inter-African linkages on trade through the elimination of trade barriers to foster a liberalized single continental market. "The IGAD Secretariat also welcomes the signature of the African Continental Free Trade Area by all Member States of IGAD - Djibouti, Ethiopia, Somalia, South Sudan, Sudan and Uganda - and will endeavor together with the African Union to work alongside its Members States to facilitate efforts to enhance free trade within its respective region and across the continent," the bloc said in a statement. All the East African countries except Burundi which did not attend the Summit on March 21 in Rwanda signed all the three protocols. Only 22 member countries were required to sign the agreement to make the AfCFTA treaty operational. According to the Africa Union, AfCFTA aims to establish a single liberalized market that will spur industrialization, infrastructural development, economic diversification and trade across the continent that is home to some 1.2 billion people. IGAD said the trade pact which requires ratification by 22 countries before entering into force seeks to increase intra-African trade by 52 percent,...

The African Union recently announced the creation of a Continental Free Trade Area in Kigali, in what has been termed a historic event. The heads of 44 African nations signed the bill establishing the Free Trade Area, immediately fast-tracking Africa’s economy by 50 years. However, there is still some more work to be done for the African trade area to be ‘modern’. Other than the fact that intra-African trade is the lowest among its ilk in the world at 11 percent (which was a reason for the creation of the Free Trade Area),  the Continental Free trade area also needs to be digitized. In a world of high-speed internet, emerging technologies and economies, digital networks and data flows, and the traditional boundaries regarding trade will no longer suffice. Ventures Africa spoke to Microsoft’s Director for Corporate Affairs in Africa Mr. Louis Otieno last week on the sidelines of the Africa CEO Forum in Abidjan, Ivory Coast. He says Africa needs to digitize its Free Trade Area to enable it to incorporate at scale. “Digital data flows is what defines the economic area as opposed to traditional boundaries,” he said. “For Africa to complete globally with the likes of China, we have to incorporate at scale. We have a billion people, which makes us a viable market today, with the youngest billion people, which makes us a viable market tomorrow.” His solution to digitizing the CFTA is for African governments to initiate policies that would make it easier for data flows...

Cross-border traders are blaming Customs officials for harassment, high taxes, and inspection of their products by the customs authorities at the border points. According to the traders, the officials lack information on the Customs Union and the Common Market Protocol. The traders were speaking at the recently concluded 20-year anniversary celebrations of the East African Business Council in Nairobi. “Most of these officers do not understand what the Common Market Protocol entails. You will be charged taxes at the border on every product even when you try to explain that you are East African and it is not right,” said Charity Githinji, the managing director of Tandaza Tanzania Ltd. She said that although the one stop border posts have helped ease the cost and time of doing business, not all the Customs officers understand how they work. “If, for example, I am crossing the border from Tanzania to Kenya, I am subjected to checks on both sides instead of just one side,” said Ms Githinji. She cited the single tourist visa as one of the boosts for business in the region, even though only Kenya, Uganda and Rwanda have signed it. Hajjat Nakasujja, the chief executive of Aloesha Organic Natural Health Products, said there was a need to sensitise Customs officials on what free trade under the EAC entails. “New rules, regulations and agreements are passed but the information does not reach the border officials. This is where the challenge is,” said Ms Nakasujja. EABC chairman, Jim Kabeho recommended implementation of...

March 21 in Kigali, Rwanda, saw African leaders launch the biggest free trade agreement since the establishment of the Geneva-based World Trade Organization 23 years ago. The African Continental Free Trade Area is a culmination of an agreement reached in 2012 and the intense negotiations of African heads of government that started in earnest in 2015. Initially the accord was to be signed by 55 member states. Only 44 signed the document after Nigeria, Africa's biggest economy, absconded. Whichever way you look at it, Rwanda's President Paul Kagame, also the African Union chairman, rightly put it: "Some horses decided to drink the water. Others have excuses and they end up dying of thirst." The new free trade area brings together an estimated 1.2 billion people with a combined gross domestic product of more than $2 trillion. The draft agreement commits countries to removing tariffs on 90 percent of goods, with 10 percent of what they referred to as "sensitive items" to be phased in later. Crucially, the covenant liberalizes services and aims to address the perpetual problem of non-tariff barriers, which have become the biggest headache in intra-African trade. Such barriers come in the form of government laws, regulations, policies, conditions, restrictions or specific requirements or prohibitions that protect domestic industries from foreign competition. Once the bottlenecks are done away with, African states look forward to a situation where there will be free movement of labor and the establishment of a single currency like the eurozone monetary union of 19...

Delta Air Lines has said it added a second non-stop route from Lagos to the United States (U.S.), with the aim of boosting trade and commerce between both nations put at $9 billion as at 2016. The airline also affirmed that the move came as Nigeria opens up greater investment opportunities, as well as to provide business travellers more opportunities to reunite with families and friends.Records have shown that the U.S. is Nigeria’s largest foreign investor and the airline carried more than 89,000 passengers between Lagos and the country in 2017, while the new strategy is expected to increase the indices. Unveiling the new commercial schedules to newsmen last week, in Lagos, alongside the Commercial Director, West and East Africa, Bobby Bryan, the company’s Senior Vice President, Europe, Middle East, Africa and India, Corneel Koster, said the Lagos to New York-JFK route is planned to connect both financial headquarters. Launched on March 25, 2018, as the first ever direct operations on the route, he disclosed that the flights depart Lagos at 11.30p.m (23:30hrs) on Tuesday, Thursday and Sunday to arrive New York-JFK at 5.30a.m (05:30hrs), while in-bound flights arrive Lagos Monday, Wednesday and Saturday. According to Koster, the new arrangement will afford customers flying to Delta’s New York-JFK hub the benefit of over 20 connections across the U.S. to destinations including Washington D.C., Baltimore and Chicago, while also complementing the existing Lagos-Atlanta route with more travel options to and from the U.S. “With the U.S. the largest foreign investor in...