LUSAKA Africa remains the second-fastest growing economic region after East Asia, says a report. It, however, notes there is need for a higher expansion rate, if the continent is to make a meaningful dent in poverty levels. The report by the African Development Bank (AfDB) said the continent’s average growth is projected at 3.7 per cent in 2016 and will pick up to 4.5 per cent in 2017, provided the world economy strengthens and commodity prices gradually recover. Titled African Economic Outlook 2016, the survey says Africa’s economic performance held firm in 2015 amid global headwinds and regional shocks. Last year, it said, net financial flows to the continent were estimated at $208 billion, 1.8 per cent lower than in 2014, due to a contraction in investment. The report was released on Monday during opening of the lender’s annual meeting in Lusaka, Zambia. The forum brings together several delegates from around the world. MAKE REAL IMPACT While launching it, AfDB acting director development research department, Mr Abebe Shimeles, said to make any real impact at reducing poverty, Africa needs to grow at a rate of 7 per cent per year. And during a panel discussion on sustainable cities and structural transformation in Africa, UNDP assistant administrator and regional director, Mr Abdoulaye Mar Dieye, said Africa had made some gains in human development, especially in education. Mr Dieye said one of the major challenges facing cities on the continent was governance as local administration was neglected by national governments. UN Habitat...

After a decade of strong economic growth at the start of the millennium, Africa now faces a less favourable external economic environment — which has led to a slowdown in the economy at home. The planned Continental Free Trade Area (CFTA) has the potential to reinvigorate Africa’s development at this watershed moment. It could prove crucial for the creation of well-paying jobs, especially for Africa’s youth, but political leadership focused on African integration will be decisive. Weaker commodity prices and slowing demand in emerging economies have dampened the outlook for Africa’s commodity export revenues. Western donor attention has substantially shifted to the refugee and migrant crisis in Europe, and tighter external financial conditions for Africa’s frontier markets have led to sizeable capital outflows. At the same time, we’re still seeing illicit financial flows, in part down to weak taxation regimes and a race to the bottom for investment incentives. Severe drought in parts of Southern and Eastern Africa is also putting millions of people at risk of famine. There is also a strong chance that Africa could be left behind on the technological front — as we have seen before. Manufacturing value chains in Africa are often depicted as the next logical place for foreign investment to flow, as the price of labour gets more expensive in China and the country is moving its focus away from exports to domestic consumption. But with innovation rapidly making a robot workforce a real possibility in countries like the US, China, Germany and Japan, and low-cost energy...

It is now official. Kenya will no longer be the gateway to Africa’s Great Lakes Region. Rwanda announced last week that it would join Uganda to develop a new gateway to Tanzanian ports. This announcement follows hot on the heels of an earlier announcement by Uganda that its oil pipeline to the sea would go through Tanzania, contrary to the expectation that it would pass through Kenya. Some pundits may see this turn of events as a strategy to isolate Kenya in the region, but it may herald a new competitive environment that would benefit the entire region. For more than half a century, Uganda, Rwanda, Burundi and the Democratic Republic of Congo relied on the port of Mombasa, the East African Railways, and the relatively better road network in Kenya to import and export goods to and from these countries. Kenya took this opportunity for granted.  Unofficial, non-tariff barriers frustrated desperate landlocked countries. Due to the huge delays, perishable goods often got damaged on the way. Corruption added injury to an already-increasing pain on Kenyan roads. Tanzania, which has massive resources on the Indian Ocean, slept on the goldmine of the Dar and Tanga ports. Then came Magufuli, and he is turning out to be Tanzania’s knight in shining armour. The man is seen as a believable, reassuring, no-nonsense fixer. In one fell swoop, he has demolished the “coalition of the willing,” which threatened to isolate Tanzania as the unwilling partner in East African integration. Consequently, Tanzania may be on...

Africa's economy is likely to grow 3.7 percent this year as resilient private consumption and investment offsets the effect of a slump in commodity prices and global headwinds, the African Development Bank (AfDB) said on Monday. Launching its latest regional economic outlook in the Zambian capital, the AfDB also said growth could accelerate to 4.5 percent next year if commodity prices recovered and the global economy strengthened. Source: CNBC Africa

Worldwide the future of manufacturing is uncertain. Thanks to emerging technologies such as mobile connectivity, artificial intelligence, next-generation robotics, and 3D printing, supply chains and factory floors face transformations as significant as any since the last industrial revolution. This “Fourth Industrial Revolution” will feature new forms of collaboration that drive innovative value chains and business models that could leave traditional industrial patterns in the dust. Influenced by these global manufacturing trends, Africa has its own challenges. In order to develop its economic infrastructure and to improve its balance of payments, local beneficiation of the continent’s natural resources and agricultural products is essential.  The United Nations expects that Africa’s population will double to 2.5 billion people by 2050. The middle class is rising, indicating an increase in consumption. Moreover, the population growth indicates a dramatic need for employment. Africa has no alternative to developing a strong value-added manufacturing base. The continent, however, has a way to go: in 2014, 30 per cent of China’s GDP came from manufacturing, according to the World Bank. By comparison, Nigeria’s share stood at just 9 per cent, Kenya 12 per cent, Zambia 8 per cent. Africa has ample opportunities to grow its manufacturing base in a broad range of industries. Local beneficiation of resources in for example oil and gas is one example. Moreover, the growth of the population will spur growth in direct consumer industries such as food/agriculture and beverage, home and personal care, apparel, and even automotive. Other likely target sectors include secondary industries...

The East African region’s competitiveness can only be boosted if more investments are made in infrastructure, healthcare and education, a competitiveness report has shown. The 2015/2016 Africa Competitiveness Report shows that East Africa is the continent’s most competitive region with Rwanda being the most competitive economy in the region followed by Kenya. Overall, Rwanda is in third position in Africa after Mauritius and South Africa and 58th globally. The report findings indicate that East Africa’s favourable ranking largely owes to the diversity of its economies and business efficiency. However, the report findings indicate that a lot is desired in basic aspects such as infrastructure within and connecting the region outwards as well as healthcare and education. Improvements in education and healthcare will serve to improve human capital and market size, the report notes. “Although currently Africa’s fastest growing region, the EAC faces competitiveness challenges including infrastructure, human capital, technological readiness and market size. Life expectancy remains low and infant mortality high. Despite recent progress, secondary and tertiary enrolment rates remain low at 38 per cent and 4.5 per cent respectively which is lower than Ecowas and SADC,” the report reads in part. The report also takes into consideration the disparities within EAC member states, which cause some countries to bring down the overall performance of the region. “The greatest disparities in the EAC region are in the areas of institutions and financial markets development. Rwanda leads in institutions, infrastructure, health and primary education and market efficiencies. Kenya leads in business...

The 2016/2017 annual budget of the cash-strapped EAC will be tabled here on Thursday before the regional Assembly which starts its budget session here today. Mr Mfumukeko warned when the baton was handed over to him by Dr Richard Sezibera, a Rwanda national, of impending stringent measures to salvage the regional organization from the current financial crisis. He stated that EAC, now made of six member states after the recent admission of South Sudan, has never experienced such financial instability and that he as a chief executive of the regional body would propose stern measures geared at cost-cutting and accountability on the part of its officials. During the current 2015/2016 financial year which is coming to an end, the East African Legislative Assembly (Eala) approved a budget of $ 110,660,098 but by last month the Arusha-based Secretariat complained that the development partners, who contribute 70 per cent of the budget, had not disbursed about 30 per cent fo the expected funds. During the fiscal year coming to an end, EAC was compelled to phase out some projects funded by development partners due to declining support from donors. The $ 110.6m that was approved for expenditure was $14 million less than the 2014/2015 financial year budget which totalled $124 million. The next financial year budget will be read by Tanzania’s minister for Foreign Affairs, International and EAC Affairs Dr. Augustine Mahiga, in his capacity as the Chairperson of the EAC Council of Ministers, the policy organ of the Community. The unprecedented...

Uganda has played down any suggestions that the Kenyan government plans to construct its route of the Standard Gauge Railway (SGR) that will be terminated at Kisumu, which is about 139 kilometres from the Kenya-Uganda border town of Malaba. According to The East African newspaper, Kenya’s transport cabinet secretary James Macharia acknowledged that extension of the line to Malaba may no longer be necessary if landlocked states opted out. “The decision has not been reached but we have a number of options at our disposal. We can decide to end the SGR at Naivasha or Kisumu but it will still be a viable venture due to the presence of Lake Victoria,” said Mr Macharia. The SGR Uganda project coordinator, Mr Kasingye Kyamugambi has refuted the claims and said the three countries – Uganda, Kenya, and Rwanda – were still committed to the route. “I think the protocol is clear between the countries and anything that’s outside the protocol must also come through the Northern Corridor Integration Project (NCIP) summit that we use as a fall back arm to know if we are together or not and that is really the presidents’ forum,” he told Daily Monitor during a tour to assess land acquisition in Tororo District on Wednesday. The ping-pong Rwanda last week, announced plans to build a railway through Tanzania to the Indian Ocean noting that the route is cheaper and would take a shorter time to complete. This is according to The East African. The Northern Corridor Infrastructure...

Kampala. The African Development Bank Group (AfDB) is set to unveil strategies of creating 25 million jobs for young people over the 10 years in its member states. The strategies are contained in the group’s new agenda for the continent’s economic transformation that are to be revealed at this year’s annual meetings scheduled to take place from May 23 to 27 in Lusaka, Zambia. Unemployment in sub Saharan/African continent as a whole has an estimated 11 million young Africans expected to join the labour market every year for the next decade (World Bank data). Therefore, creating millions of productive, well-paying jobs will be vital to boost economic growth to significantly cut poverty, and create shared prosperity in Africa. In an annual meetings preview video message, the president AfDB, Dr Akinwumi Adesina, said participants will examine burning issues in Africa and focus on the bank’s five new priority areas, (High 5s), designed to scale up its operations for the continent’s transformation. These High 5s are: Light up and power Africa, Feed Africa, Industrialise Africa, Integrate Africa, and Improve the quality of life for the people of Africa. “Each of those is high on the agenda in Lusaka,” Dr Adesina said, noting that three of them will take a major leap forward as the bank unveils new strategies, and a programme to create 25 million jobs for young people over the next decade. “All of them need to be debated and owned, as much by governments, as by business, as by civil...

There was much excitement in Rwanda’s capital, Kigali, in the week leading up to the convening of the World Economic Forum for Africa recently. As with past meetings of this magnitude, the government of Rwanda left nothing to chance. Its remarkable mobilisation capacity was deployed to get everyone with a role to play during the preparations to do their bit and do it well. Under normal circumstances officials and public servants here work like there is no tomorrow. It gets worse when big events that require special attention are in the offing. Contacts I was running after for bits of information about this and that and who from one to the next pleaded inability to see me, summed up what was going on. The most common response to appointment requests were, “I really can’t do anything this week.” A friend working for a major government agency wasn’t exaggerating when he said it was no use trying to set up a coffee appointment before the WEF was over, “because I am not able to think about anything else right now”. It mattered not whether I was talking to a public servant, a politician, or a member of the local business community. They were all “busy with WEF.” What on earth were they doing, I wondered. In public, there was not much activity in evidence. And there were no reports in the media about this or that critically important aspect of the preparations lagging hopelessly behind schedule. Everything seemed to be in...