Countries qualifying for duty-free access to US markets under the Africa Growth and Opportunity Act (Agoa) must adhere to US trade regulations as well as its foreign policy. This is a new rule enacted by the US Congress last year after the renewal of the US–Africa trade partnership for another 10 years. According to EAC Director General of Customs and Trade Peter Kiguta, under the new rule, a country that goes against any of these requirements is suspended from Agoa for a period to be determined by the US government. “The eligibility criteria will worsen with time because US trade representatives are expected to report on the eligibility of individual country every year and if found ineligible, a country’s goods will not have access to the US market,” said Mr Kiguta. Last week, the US and South Africa reached an agreement on importation of American pork shoulder cuts and beef. In November, the two had reached yet another agreement on poultry products. South Africa is the second country to face suspension after Burundi under the new rule. Last year October, President Barack Obama announced that Burundi would be ejected from Agoa in January for its “continuing crackdown on opposition members, which has included assassinations, extra-judicial killings, arbitrary arrests, and torture.” African countries’ agricultural produce enjoy a zero-tariff rate for about 6,800 product line through Agoa without any reciprocity required for US goods. “For African countries to expand their trade partnership with the US market, we need to negotiate a preferential trade agreement...

THE Federal Republic of Germany has signed an inter-governmental agreement with the East African Community (EAC) to support the economic integration, regional health facilities and water resource management. Germany signed a total of 37 million euros in grants to the EAC for 2016-2018, highlighting the strong commitment to support the integration process in East Africa. The EAC Communications Officer, Mr Richard Owora Othieno, revealed here that 10 million euro in financial assistance will be invested in the establishment of a regional network of reference laboratories for communicable diseases. With this project, the German government responds to a request for support from the EAC for the prevention and control of epidemic outbreaks in the region. Another 10 million euros in financial assistance will be used for Integrated Water Resource Management of Lake Victoria aiming at improving water provision and management of water resources. Both projects will be implemented by KfW development bank. On the other hand, the 17 million euros in technical assistance will be made available to further support of the economic integration process, including a contribution to the EAC partnership fund. The programme is focusing on institutional strengthening of the EAC Secretariat and on supporting the implementation of the Customs Union, Common Market Protocols and Monetary Union. This includes the elimination of Non- Tariff Barriers such as tax harmonisation as well as Mutual Recognition Agreements for qualifications. At the same time Germany will support the EAC in promoting private investment especially in the pharmaceutical sector, including the establishment of...

World Trade Organisation Director-General Roberto Azevedo has described last December's ministerial conference in Nairobi as a memorable gathering where significant results were achieved. Mr Azevedo said the meeting delivered some of the biggest reforms in global trade policy ever realised in the past 20 years by the 162-member organisation. Speaking at the University of the West Indies in Jamaica, the WTO boss urged governments to capitalise on the progress in future negotiations that will enable governments and businesses to trade more. “The Nairobi package made a decision on export competition that was truly historic. It is the most important reform in international trade rules on agriculture since the creation of the WTO where we eliminated agricultural export subsidies. “This has significantly improved the global trading environment, especially in developing countries who suffered enormous trade-distorting potential from the subsidies. "In fact, this task has been outstanding since export subsidies were banned for industrial goods more than 50 years ago. So this decision corrected an historic imbalance,” he said. He said a level playing field in agricultural markets had been created, with direct benefits to farmers and exporters in developing and least-developed countries. Mr Azevedo said the move would also correct anomalies where export credits and state trading enterprises wrongly benefitted from the subsidies-driven export trade. “The smaller and the poorer the country, the more likely it is to need trade as a means to attract investments and to boost economic and social development. We simply cannot lose sight of this reality,”...

Djibouti has signed a series of trade agreements with China including the setting up banking and free trade zones, according to a statement from the strategic Horn of Africa nation’s president. China last month said it would build a naval base in Djibouti, the latest sign of China’s growing international security presence. The “important economic agreements” include banking deals and a proposed 48 square kilometre (18.5 square mile) free trade zone, with the first section “to be operational before the end of 2016”, President Ismail Omar Guelleh said in the statement released this week after the deal was inked on Monday. Djibouti, which lies at the entrance to the Red Sea and Suez Canal, will operate as a “trans-shipment and redistribution” hub for Beijing’s trade, the statement added. On Wednesday, the United Nations World Food Programme (WFP) opened a “humanitarian logistics base” in Djibouti’s port. Regional WFP chief Valerie Guarnieri said the site will help aid to be transported more “quickly, efficiently and cost-effectively” in a region that includes neighbouring drought-hit Ethiopia, as well as war-torn Yemen, Somalia and South Sudan. WFP last year moved 500,000 tonnes of food through Djibouti and the new base will enable larger amounts. Floods and failed rains caused by the El Nino phenomenon have sparked a dramatic rise in the number of people going hungry in east Africa. WFP said aid for a quarter of all those they support worldwide will be funnelled through the new base. “We are opening this facility at a...

For several years, experts from the three largest trading blocs in Africa — the Southern African Development Community (SADC), the East African Community (EAC) and the Common Market for Eastern and Southern Africa (COMESA) — were locked in intense negotiations over a free trade agreement whose aim is to bring about a unified and liberalized single market. The talks finally bore fruit on 10 June 2015 when 26 African countries signed the Tripartite Free Trade Area (TFTA) agreement in Cairo, Egypt. Under this agreement, all the 26 countries, with a combined gross domestic product (GDP) of about $1.3 trillion and a population of 565 million, will merge into a common market and eliminate tariff lines and trade barriers. The participating countries will benefit from liberalized intra-regional trade, which is expected to boost the flow of goods and services. When implemented, the free trade area will constitute about half of Africa’s GDP, half of its population and will cover a combined landmass of 17 million square kilometres, about the size of Russia. At the moment, however, only three of Africa’s eight regional economic communities are participating in the TFTA. Non-participating economic blocs include the Arab Maghreb Union, the Economic Community of West African States, the Intergovernmental Authority on Development, the Economic Community of Central African States and the Community of Sahel-Saharan States. For now, these blocs are not participating in this new initiative for political and economic reasons. The Abuja Treaty of 1995 signed by 51 African countries mandates all regional...

CHINA plans to develop a free trade area with African countries - to increase the continent’s exports to the far-east nation and offset the huge trade imbalance, a top official has said. Prof Hu Hailiang, the Vice-Chairman of the Social Sciences of the Ministry of Education in China, told reporters in Dar es Salaam yesterday that the envisaged free trade area falls under its new fiveyear development plan slated to begin this year. The free trade area agreement is expected to increase exports of goods from Africa to offset huge trade imbalance between the continent and China, he said “China will negotiate with individual African countries and regional blocks to develop free trade area agreement to promote exchange of goods and services and investments,” he said at a press conference organised after a seminar on new China. China’s policymakers are compiling the 13th Five-Year Plan (2016-2020), whose proposal was adopted at the Fifth Session of the 18th Communist Party of China (CPC) Central Committee in October last year. The new five-year national socio-economic development will charter an explicit blueprint for the country’s development over the next five years - and provide more opportunities for the development of other countries. China is Africa’s largest trading partner, surpassing the United States in 2009. According to Brookings Education Institution, in 2012, China’s trade with Africa reached $198.5 billion, while U.S.-African trade in 2012 was $99.8 billion. China’s trade with Africa is only 5 per cent of its global trade total. More than 80...

KAMPALA, UGANDA - Most of us dread sitting for examination papers. The East African Community (EAC) at Summit level of Heads of State should be no exception. There is a big problem in the neighbourhood. This year the EAC will have to sit the paper on ‘relevance of good governance in the integration process’, because the Burundi situation is getting out of hand. Failure will be a huge setback in the aspirations for a Common Market. Success however, will make the EAC that much stronger and more competitive as a investment destination. Burundi is tittering at the edge of an abyss. Foreign investor confidence is being tested. Uncertainity does not attract money. It simply scares it away, but the Burundi opposing parties remain stuck in their uncompromising positions. This has put the rest of the EAC in a muddle. Worse still, all efforts at peace-making have been soundly rebuffed, including the manhandling of EAC Secretary General, Amb. Richard Sezibera last October. The African Union has fared no better. The Burundi government was scalding in December when the AU mooted a force of 5000. There is nothing as frustrating as being caught up in a situation that is not of your own making. Both Rwanda and Tanzania have had to take in refugess, which  puts an added strain on their national budgets. A quick response came from Germany, who offered $18 million in appreciation of Tanzania’s efforts to handle the influx. Other help is hard to come by. The United Nations High...

The dream of a unified African market took a giant leap towards reality following the signing in Cairo, Egypt, in June 2015 of a Tripartite Free Trade Area (TFTA), bringing together EAC, COMESA & SADC blocs. With South Africa and Egypt, two of Africa's leading economies, driving the 26-country TFTA participants, experts are now advocating for, among others, good governance and prudent macroeconomic policies to reap the full benefits of the agreement. For several years, experts from the three largest trading blocs in Africa — the Southern African Development Community (SADC), the East African Community (EAC) and the Common Market for Eastern and Southern Africa (COMESA) — were locked in intense negotiations over a free trade agreement whose aim is to bring about a unified and liberalised single market. The talks finally bore fruit on 10 June 2015 when 26 African countries signed the Tripartite Free Trade Area (TFTA) agreement in Cairo, Egypt. "The conditions [to form the TFTA] have never been better Under this agreement, all the 26 countries, with a combined gross domestic product (GDP) of about $1.3 trillion and a population of 565 million, will merge into a common market and eliminate tariff lines and trade barriers. The participating countries will benefit from liberalised intra-regional trade, which is expected to boost the flow of goods and services. When implemented, the free trade area will constitute about half of Africa's GDP, half of its population and will cover a combined landmass of 17 million square kilometres, about the...

Arusha — Embattled Burundi President Pierre Nkurunziza may be stopped from assuming the chair of the East African Community (EAC) Heads of State Summit if a petition filed by human rights groups in Africa is given a nod by relevant regional bodies during its hearing which kicks off here today. The Pan African Lawyers Union (Palu) and other petitioners from within and outside the region want the Burundi leader stopped from taking over the rotating chairmanship of EAC until he resolves the political, human rights and humanitarian crisis in his country. The petition was submitted to the East African Legislative Assembly (Eala) and is set for hearing at the EAC headquarters beginning this morning at a time the mediation efforts among the warring parties in Burundi are yet to bear fruit and with the humanitarian crisis there worsening. President Nkurunziza, whose country is one of the EAC partner state, is expected to assume the Chair of the regional Heads of State during the coming Summit, whose date and venue is yet to be announced. He will take over from President John Magufuli. According to the EAC Treaty, the tenure of office of the Chairperson of the Summit is one year and the office of the Chairperson shall be held in rotation among the partner states. Currently there are five the others being Uganda, Rwanda and Kenya. Subject to the provisions of the Treaty, the Summit shall determine its own procedure, including that for convening its meetings for the rotation of...

For a long time, the 54 countries of Africa have been a patchwork of different languages, laws, and currencies, making travel (let alone business) on the continent quite an endeavor. Indeed, for businesses, for a long time being in Africa has required moving from country to country, which too often means more than just navigating a map and changing money—it includes meeting different standards, understanding different laws, and paying different tariffs at every (and there are many) border crossings. At the same time, African countries, many landlocked and small, face unique challenges in being able to scale industries and access markets. How might Rwanda export its coffee if it has no access to the ocean? How might a line of countries best collaborate to create a railroad or road spanning their collective land for the benefit of all? How might countries with different advantages integrate into global value chains? And so, in 1991, 51 heads of state and government signed the Abuja Treaty, which established a roadmap towards an African Economic Community to be completed by 2028. In 2013, the African Union, created Agenda 2063—a vision and action plan—which, among other objectives, sets out to better integrate the continent to circumvent and even knock down these obstacles to trade, investment, and overall economic growth. Thus, the African continent has been creating and fostering “regional economic communities” with the aim of facilitating trade and eliminating economic bottlenecks. Eight of these communities, as seen in Figure 1, are the “building blocks” of...