Arusha. The secretariat of the African Continental Free Trade Area (AfCFTA) will be operationalised in March, next year. The agreement came into force on May 30, this year, after it was ratified by the required 22 African Union (AU) countries. This was revealed here on Monday at the start of a symposium on the trade agreement which attracted scholars and experts from across the continent. The secretariat of the intra-African trade body will be established in Accra, Ghana as appointment of the secretary general is underway. “Structure and budget of the secretariat has been approved”, said Dr. David Luke, the coordinator of the African Trade Policy Centre based in Addis Ababa. He said it has been proposed that AfCFTA establish office in each state party; countries which have signed and ratified the agreement. Source: The Citizen

Despite a steady increase in coffee consumption around the world, trade prices have fallen dramatically in the past three years, hitting producers. At the same time, the cost of an espresso or latte remains as full-fat as ever. What's going on? Futures on arabica and robusta, the most widespread varieties of coffee, have fallen 40 percent since the beginning of 2017 and are now at historically low levels. This is largely because of bumper harvests in Brazil, the world's main coffee producer. But at the same time, consumption has grown by an average of 2.1 percent a year for the past decade, according to the International Coffee Organization (ICO). Two billion cups of coffee are drunk every day, according to Fairtrade International, which works to improve the lot of farmers through better pricing and conditions. The crisis in prices is beginning to create "real structural problems" for producers, said Valeria Rodriguez, a manager at fairtrade organisation Max Havelaar France. "The consequences are terrible - they can no longer support themselves, invest in production or prepare for the challenges of climate change," she said. Supplier woes In Central and South America, many smaller producers in Africa and Latin America are giving up in particular those who grow arabica, which is more difficult to produce than the robusta variety favoured in Asia, according to Jack Scoville, a futures markets analyst with Price Group. A similar trend is observable in Africa for reasons ranging from high production costs in Kenya to insecurity in...

Non-tariff barriers have been cited as the most challenging stumbling block in the East African regional block. Youths doing business in the member states decry the barriers that deny them chance to explore and utilize the available market. This took the greater part of the discussion at the YouLead summit 2019 sitting in Arusha Tanzania. Despite the willingness expressed by member states in the integration process some are still adamant and only look at how they benefit as individual states. During the YouLead summit young entrepreneurs raised a number of issues that frustrate them hindering their participation in regional trade hence keeping their products at local markets. They say the available technology in the new media era gives them chance to reach out to many people outside their home countries but sometimes they find it hard when it comes to physical exportation of goods to their clients. Sylvanus Maritim, Member of Parliament Ainamoi in Kericho County, says despite the good policies that are in place, there is a lot that needs to be harmonized for East African states to get on the same page. Access to finance is another challenge the youth cite that hinders their entrepreneurship needs, despite some governments having youth empowerment programs; the youths are not yet fully into business and the unemployment is still high in the region. Lilian Aber, the Chairperson National Youth Council, says youths who are doing business should put in mind the fact that value addition is one of the most important...

A rare breed of men and women has effectively eclipsed out forex bureaus and commercial banks in exchange of regional currencies at the cross-border points. They are the unspoken powers driving money exchange business at land border crossings of the East African Community (EACV) member States, where they are, in many cases, the only option or at least they will try to convince you that they are. Simply known as The Money Changers, this rare breed of men and women who often offer reasonable rates have effectively eclipsed forex bureaux and banks in transacting daily currency exchanges especially, in Kenya – Uganda border towns of Lwakhakha, Malaba, and Busia. The moneychanging business is booming in these towns and the vendors are laughing all the way to the bank as they handle hundreds of thousands of shillings even millions daily while exchanging various East African currencies for thousands of travellers going through the border points. Fully licenced, the money changers, who used to be part of the black market, walk freely on the Ugandan side of the border and offer their services to travellers and traders. They are also present in Namanga, Isebania and Sirare towns on the Kenya – Tanzania border. Kenya, Uganda and Tanzania shillings, Rwandese and Burundian Francs and South Sudan pounds are their tools of trade. An immediate regional Kenya Revenue Authority (KRA) officer James Ogilo said the biggest irony is that their tools of trade are openly displayed in form of huge wads of cash money on mobile...

The African Development Bank (AfDB) will use its newly ramped-up capital base to help boost private sector investment on the continent and invest in infrastructure projects that support the African Continental Free Trade Area (AfCFTA). These are some of the plans the bank has for the additional $115bn (R1.7-trillion) recently approved by its shareholders, according to the bank’s vice-president for finance and CFO, Bajabulile “Swazi” Tshabalala. At the end of October, the bank’s shareholders agreed to more than double its capital base, the largest increase in the bank’s history, taking the total to $208bn. “We are looking to do more private sector activities and investments in support of the African continental free trade agreement because you need companies to actually trade with each other,” she said. The bank will also ramp up efforts to support African entrepreneurs, particularly women and young people. Tshabalala was speaking on the sidelines of the Africa Investment Forum, which closed in Johannesburg on Wednesday. The forum is designed as a deal-making platform and marketed 56 transactions from across the continent to international and regional investors. Investment interest was secured for deals worth $40.1bn, up from the previous year’s $38.7bn. The capital boost will provide the bank with “additional risk capacity” to support and crowd in investment by the private sector, particularly in low-income and fragile countries that have been neglected in the past, she said. This will include the use of instruments that help mitigate risks for private investors, including the bank’s co-guarantee platform. The...

East African heads of state are expected in Arusha on November 30 for the 21st Ordinary Summit as the Community marks its 20th anniversary while faced with several unaccomplished goals. The Community is currently witnessing frosty relations between countries coupled with an uncertain economic future saddled by a growing debt burden. Rwanda is at loggerheads with both Burundi and Uganda, while Kenya and Tanzania are still working through occasional trade disputes. On the agenda is the rotational hosting of the summit by member states as opposed to meeting in Arusha, a development seen as important to raising the profile of the bloc. The leaders will also review a report on the integration of a fragile South Sudan and consider progress on the verification exercise for the admission of Somalia into the bloc. The regional leaders are expected to cement their support for Kenya’s pursuit for a non-permanent seat at the United Nations Security Council. Bureaucratic overload Another departure from tradition will involve the heads of state holding a round-table with the private sector to set an economic agenda for the region, driven by goals that are in-sync with the African Continental Free Trade Agreement. “The summit is important in offering political goodwill which we intend to exploit in addressing issues that affect the private sector,” Peter Mathuki, East Africa Business Council’s executive director, told The EastAfrican. The admission of DR Congo into the bloc will also be on the table after its it made a formal application in June. EAC countries...

Damali Ssali. There are several factors that influence the value and volume of trade. However, tariffs on tradeable goods and services are one of the most significant factors. International trade grew dramatically in the second half of the 20th century. As an example, total global trade in 2000 was 22 times greater than it had been 1950. This increase in multilateral international trade occurred when trade barriers, especially tariffs, were significantly reduced or in some cases eliminated across large trade blocks in Asia, America and Europe. Tariffs are taxes levied on imports and exports between states with the aim of generating government revenues and protecting domestic industries. Sometimes, depending on the tax policy of the country, a tariff could be set as high as 60%. This is usually to protect a young industry that is considered as very important to that state. Other times tariffs are imposed by states, against products and services of another state, to settle scores. The current trade war currently going on between the United States and China is one such tariff war waged between states. In 2017, the United Nations Conference on Trade and Development reported that tariffs, on tradeable goods and services, between the developed states averaged at 1.2%. This is low compared to the average tariffs, on tradeable goods and services, between African countries, which stand at 8%.  Moreover, tariffs remain relatively high in important sectors, including agriculture, apparel, textiles and leather products. Unfortunately, these high tariffs make it easier for African countries to...

That’s the main conclusion from a new report Africa’s Development Dynamics  Achieving Productive Transformation, published by the African Union (AU) and the OECD on November 5. As it stands, productive transformation is not taking off, especially in the employment-intensive sectors where it is most needed, the report finds. Far from catching up, Africa is falling further behind emerging markets in Asia. The Africa-to-Asia labour productivity ratio has decreased from 67% in 2000 to 50% today, the report finds. African exports of consumption goods to African markets decreased between 2009 and 2016, both in dollar terms and relative to the continent’s GDP. “Without a strong and co-ordinated policy push,” the report says, “African firms risk losing out to new global competitors.” About 42% of Africa’s working youth live on less than $1.90 a day and only 12% of Africa’s working-age women were in waged employment in 2016, according to the report. The number of people on that income level increased by 31 million between 1999 and 2015 to 407 million. In some countries, almost 91% of the non-agricultural labour force remain in informal employment. The annual total of 29 million new entrants to Africa’s labour markets risks becoming a cumulative addition to the jobless total. If jobs for them are not found in one year, they will need to be created the next year. Clusters key Many entrepreneurs lack basic capabilities, the report finds. Most youth entrepreneurs in Côte d’Ivoire and Madagascar lack skills in areas such as bookkeeping, multi-year planning and human resources. The AU and...

THE East African Community (EAC) integration process is on course, and a significant number of achievements have been registered in all four pillars of the unification. The pillars are Customs Union, Common Market, Monetary Union and Political Federation. Under Customs Union, harmonisation of cross-border rules and procedures have catapulted intra-regional trade from 2.7 billion US Dollars in 2016 to 2.9 billion US Dollars in 2017 and to 3.2 billion last year. The second East African Community Development Partner Group (DPG) Thematic Groups (TGs) meeting on Infrastructure and Economic Integration that was convened at the EAC Headquarters in Arushheard further that on the free movement of persons, there is no visa fee requirements for East Africans travelling across the region. The EAC Deputy Secretary General (DSG) in-charge of Productive and Social Sector, Mr Christophe Bazivamo, informed the members that some partner states allow use of national identity cards as travelling documents and that the countries were issuing the International East African e-Passport that facilitates travel within the region and beyond. On infrastructure development, the DSG informed the delegates that the EAC partner states were jointly implementing regional infrastructure projects that had been agreed upon by the biennial infrastructure development retreats by the Summit of EAC Heads of State. Mr Bazivamo disclosed to the development partners that on the EAC Political Federation, that EAC will launch the national stakeholders' consultations on the Draft Constitution for the EAC Political Confederation before the end of the month. "EAC partner states have nominated two constitution...

A STANDARD gauge railway (SGR) project that will link Rwanda, Burundi and DR Congo with the Dar es Salaam port is one among major projects that will feature in the Africa Investment Forum that begun in Johannesburg yesterday. The President of African Development Bank, the organiser of the forum, Dr Akinwumi Adesina said the SGR project currently being undertaken by the Tanzania’s government using local resources would be on the table in the forum that has brought together global multilateral development and finance institutions and investors to tackle the continent’s infrastructure investment challenges and advance Africa’s economic transformation agenda. The three-day Africa Investment Forum billed a game-changer to tilt capital flow into the continent has been organised by the African Development Bank and partners in Sandton Convention Centre to advance projects, raise capital and close financial deals. Around 2000 delegates were expected to attend the innovative investment marketplace which has brought together heads of state, project sponsors, pension funds, sovereign wealth funds, institutional investors in 60 boardroom sessions to move projects from commitment to action. And the organisers of the forum are adamant that it will not be a talk shop but a unique platform to close financial deals for major projects that will boost economic growth and development in the continent. Africa Investment Forum is not a talk show. We deliver,” said Dr Adesina at the opening ceremony. “We promised (during the inaugural forum last year) and we delivered. We’re changing the investment narrative of Africa.” “When we laid...