African Union Heads of State and Government have underscored the urgent need for member states to kick-start trading activities, under the African Continental Free Trade Area (AfCFTA). The decision was adopted during a virtual meeting of the 13th Extra Ordinary Session of the Assembly of the Union on the AfCFTA, this past Saturday, under the Chairmanship of Cyril Ramaphosa, President of South Africa and Chairperson of the African Union (AU). The summit is taking place just four weeks before the AfCFTA commences trading on January 1, 2021, to consider the adoption of the legal instruments that will facilitate its operation. “Today we stand on the cusp of a new era in the progress of our continent,” said Ramaphosa, adding, “The moment that we have all been working painstakingly towards has finally arrived…We are all filled with a great sense of pride at how far we have come to reach this moment”. All 55 member states of the African Union will be brought together by AfCFTA which allows for market covering of over 1.2 billion people not limiting the growing middle class, and a collective gross domestic product of over US$3.4 trillion. This also makes AfCFTA the world’s biggest free trade area after the establishment of World Trade organisation. AfCFTA has the ability to enhance intra-African trade by 52.3 percent by removing import duties, and also to double this trade if non-tariff barriers are also reduced. AfCFTA seeks to create and achieve unilateral continental market for goods and services, with free...

Addis Ababa, 27 November 2020 (ECA) – Africa’s customs experts have given their support to the adoption of continental guidelines to facilitate free and timely flow of cross-border trade amid the COVID-19 pandemic ahead of the start of trading under the African Continental Free Trade Area (AfCFTA) on 1 January 2021. They made the pledge at a virtual meeting of Directors General of Customs on the continent organized by the African Union Commission (AUC) today, saying that the solutions must be maintained and upgraded following the crisis. The meeting observed that by magnifying Africa’s cross-border inefficiencies, the corona virus pandemic presented an opportunity to reinvigorate efforts at overcoming long-standing trade facilitation challenges. Presenting the guidelines, Mr. Stephen Karingi, ECA’s Director of Regional Integration and Trade, said they were designed to support cross-REC harmonization of Covid-19 guidelines and advance coordination and implementation of common guidelines. He said they would be presented to all relevant AU sub-committees covering customs, transport and infrastructure, among others, for consideration towards their eventual adoption. “The aim is to have the continental guidelines in place early next year to reinforce start of trading under the AfCFTA,” he said. The guidelines cover a number of new sub-sections to respond to specific gaps in existing rules, including the regulation of small-scale cross-border trade and cross-border trade by fishermen, gender considerations, and treatment of essential workers, including transport and humanitarian workers. In his own remarks, AUC’s Acting Director for Trade and Industry Mr. Hussein Hassan said the Commission partnered with...

Trade and environmental policies working in concert are vital for unlocking a sustainable recovery from the COVID-19 crisis and ensuring future resilience to climate change and other environmental disruptions, speakers said at the 16 November online high-level event organized by the WTO and the UN Environment Programme as part of Trade and Environment Week 2020. Policy makers must use the current window of opportunity to build back a greener and more inclusive global economy, they said. “The pandemic has become a stark reminder that nature, human health and the economy are not separate. Rather, they are intimately connected,” WTO Deputy Director-General Alan Wolff said. “The right trade policies would help us not only to get back on track and recover some of the time lost to the crisis from an economic perspective, but also to shift toward a more sustainable and inclusive future,” he said. DDG Wolff highlighted areas where the WTO has acted in support of sustainable trade and where members could redouble efforts to make further progress, highlighting trade opening in environmental goods and services, new initiatives to intensify trade and environment discussions and help combat plastic pollution, Aid for Trade, and further collaboration with the environmental community. His full remarks are available here. UN Environment Programme Executive Director Inger Anderson affirmed the importance of collaboration. “We are very committed to our partnership with WTO, all the more so when we see the shock the pandemic has caused. Having ministers of environment and trade engage together becomes absolutely...

n November 15, 15 countries in East Asia and the Pacific signed the Regional Economic Partnership Agreement (RCEP), creating the world’s largest trading bloc. This signing arguably marks one of the most remarkable responses of global leaders to the global protectionist trends witnessed since 2016. RCEP negotiations started in 2012 with 16 countries including the 10 Association of Southeast Asian Nations (ASEAN) countries, China, Japan, India, South Korea, Australia, and New Zealand. Even with India’s eventual withdrawal in 2019, the agreement is still the world’s largest, encompassing 30 percent of global GDP and 27 percent of global merchandise trade (Figure 1). RCEP also comprises over 18 percent of services trade and 19 percent of foreign direct investment (FDI) outflows. Driven by China, the RCEP trade bloc has gained prominence in global trade and investment, and has outstripped the growth of large high-income trade blocs over the past decades. The remarkable growth of China and Southeast Asian economies is reflected in the rising share of the RCEP bloc in global GDP, trade, and FDI over the past two decades (Figure 1). This has also propelled the RCEP to overtake trading blocs, which were much larger at the beginning of the century, including the North America Free Trade Agreement (NAFTA) and the European Union (Figure 2). GOOD NEWS FOR MEMBER COUNTRIES, PARTICULARLY NON-ASEAN RCEP deepens trade and investment relations between member countries mainly through reductions in non-tariff barriers (NTBs) on goods and services trade. The agreement focuses on NTBs as import tariffs were...

In this opinion piece, Prof. Agnes Binagwaho, M.D., MPEd, Ph.D. — vice-chancellor of the University of Global Health Equity in Kigali, Rwanda — and her research associate Kedest Mathewos explain why African countries fared much better than their Western counterparts in the fight against COVID-19. In 2019, the Global Health Security Index ranked countries according to their preparedness for pandemics. The United States was identified as the most prepared country, while most African countries were deemed to be least capable of dealing with any new health threat. Further entrenching this perspective of Africa’s lack of preparedness, Africa as a continent was predicted to have 10 million COVID-19-related deaths. However, this prediction could not have been more wrong, with African countries contributing to only 3.6% of cases and 3.6% of COVID-19 deaths worldwide as of November 13. In the past few months, scientists, global health professionals, and journalists have attempted to explain Africa’s unexpected response to the pandemic. However, these explanations often fail to recognize the reasons behind the prompt response of African countries to the pandemic. Swift response at the continental level Throughout the past 11 months, we have seen that borders do not prevent the spread of this crisis, be it in health or economic sectors. The pandemic, which originated in Wuhan, China, in December 2019, has now spread to more than 217 countries and territories to date. The economic crisis has not spared any country, with the global economy expected to shrink by 5.3% this year. In order to provide a concerted response to this global pandemic, African countries leveraged...

The Inter-Governmental Authority on Development (Igad) has validated a roadmap to implement the protocol on free movement of persons, which is expected to take 10 years. This was arrived at a high-level legal and policy experts meeting of the regional body held in Entebbe, Kampala on November 16-17 and was also endorsed by the Igad committee of ambassadors and ministers in charge of migration and labour. Upon adoption by the region's summit, the roadmap will ease cross-border mobility for its 270 million people, improve regional economic integration and development. The roadmap is awaiting adoption by the Igad Council of Ministers and Assembly. The report also said the roadmap needed to be validated by the experts of member states and then submitted to the Igad Council of Ministers and the Assembly as annex to the Protocol. Currently, nationals of the eight Igad member states require visas to travel around the region, but experts say after the 10-year implementation of the roadmap will do away with this. "We are embarking on a historic journey for our region. This process of implementation will be long but very significant," said Fathia Alwan, the Igad director of social development. Facilitating adoption For Kenya and Uganda, the adjustment will be easy as they already apply visa-free travel under different trading blocs such as the EAC and the Comesa that they are members of. Ms Alwan said implementation of the protocol that paves the way for free movement of the largely youthful population seeking social services but...

An official pact that could prevent trade tensions under the soon to be implemented Africa Continental Free Trade Area (AfCFTA) is almost ready. This strategic initiative is under the auspices of the African Union and the International Trade Centre that seeks to make key recommendations on the various products and services that could be productive to respective African countries. This is expected to provide solutions to countries in an effort to avoid overlapping of export sector priorities as countries could potentially prioritize similar produce ahead of AfCFTA implementation next year January. Indeed, AfCFTA represents a major opportunity for countries to boost growth, reduce poverty, and broaden economic inclusion, this according to a World Bank report released this year. It added that if the agreement is fully implemented, the trade pact could boost regional income by 7 percent or US$450 billion, speed up wage growth for women, and lift 30 million people out of extreme poverty by 2035. Instructively, industry analysts have indicated that the products and services that would be provided by countries under the agreement will be key to boost the expected regional income of US$450 billion. They have suggested that achieving these gains will be particularly important given the economic damage caused by the COVID-19 pandemic, which is expected to cause up to US$79 billion in output losses in Africa by the end of 2020. Already, The pandemic has caused major disruptions to trade across the continent. Early this year, the Acting Executive Director of the ITC, Madam...

Digital economy Africa, A report jointly produced by Google and the International Finance Corporation titled e-Conomy Africa 2020  projects that Africa’s internet economy is expected to grow into a $180 billion industry by 2025. This would put the contribution of e-based economic activity on the African continent to 5.2% of GDP by the quarter-turn of the century. The report predicts that Africa’s internet economy will be able to withstand the effects of coronavirus and emerge as a resilient force to drive economic growth on the continent. It notes that opportunities are rife, even with the covid-19 pandemic having affected most economies. This resilience will be based on the rich human resource base in Africa which boasts of polished developers. It anticipates that with the digital revolution in play, governments will catch up and introduce policies to support and foster the growth of internet-based businesses across the continent.   Further, investment in infrastructure that supports technological advancement is expected to be at the fore of African leadership initiatives. The report also envisions an increase in public and private investment into the sector to drive the growth of internet-based products and services in African economies. Several entrepreneurs jumped onto the internet bandwagon thereby unleashing opportunities to fully realize growth in economies, with the effect of creating employment and contributing to providing solutions to the challenges that affect Africa. Digital penetration in SSA growing Source IMF The report acknowledges the rising interest in technology-based startups which increased considerably in 2019 with investments amounting to...

Summary Time is running out for countries to conclude and submit their tariff offers as well as rules of origin, which will govern trade from January 1, 2021. Less than six weeks to the start of trading under the African Continental Free Trade Area (AfCFTA) agreement, time is running out for countries to conclude and submit their tariff offers as well as rules of origin, which will govern trade from January 1, 2021. Only 18 out of the continent’s 55 countries have submitted their tariff offers and rules of origin. The EastAfrican has learnt that a number of countries missed the October 30 deadline to submit their tariff concessions, and have until the December 5 African Union summit to do so, officials said. The Democratic Republic of Congo, Egypt, Madagascar, Malawi, Mauritius, Seychelles and Sao Tome and Principe have submitted their tariff concessions as they are not part of any Customs Unions or single customs territory. Although Nigeria ratified its membership of AfCFTA on Wednesday, it still has to lodge its tariff concessions and rules of origin before the December 5 deadline. The Southern African Customs Union (SACU) and the states under the Central African Economic and Monetary Community (CEMAC) have tabled their offers, according to Prudence Sebahizi, the head of AfCFTA Negotiations Support Unit at the African Union. The East African Community, whose members can’t submit offers individually since they apply a Common External Tariff, is yet to respond with a tariff offer. Although we could not immediately establish...

TRADERS from Tanzania, Uganda, Rwanda and Burundi will benefit from training on trade facilitation that seeks to boost knowledge, skills on the World Trade Organization (WTO)'s Trade Facilitation Agreement (TFA). Tanzania was picked to be the first country in the bloc to benefit from the training that is undertaken by the International Trade Centre (ITC) in partnership with the East African Business Council (EABC) and the Tanzania Private Sector Foundation (TPSF). The workshops that kicked off at Kilimanjaro, Tanzania have been organized as part of the European Union-East African Community Market Access Programme (MARKUP). The East African local business-support associations and traders are being equipped with a comprehensive knowledge of the TFA with a view to identifying obstacles on cross-border and advocate for their removal. The initiative comes in a wake of trade and movement of people's restrictions in some East African Community (EAC) member-states due to Covid-19 pandemic. It saw some countries, excluding Tanzania, undergoing strict lockdowns, closure of businesses that led to paralysis of intra-EAC trade. This initiative has been developed in response to persistent delays and red tape hampering the movement of goods across borders in East Africa. Among the members of the community, inefficient trade procedures and non-tariff barriers represent obstacles to expanding intra-regional trade and deepened regional integration. Trade facilitation - the simplification, modernization and harmonization of export and import processes - has thus become a key issue for the global trade system and regional economic communities, such as the EAC, to create new opportunities...