Nairobi, 6 March 2010 (ECA)- The implementation of the African Continental Free Trade Area (AfCFTA) in Eastern Africa could result in welfare gains amounting to USD 1.8 billion for East Africa, boosting intra-African exports by more than USD 1.1 billion and creating more than 2 million new jobs, says a new report. This report, entitled: “Creating a Unified Regional Market - Towards the Implementation of The African Continental Free Trade Area in East Africa” jointly published by the UN Economic Commission for Africa (ECA) and Trademark East Africa, was launched yesterday in Nairobi, Kenya. The launch event was attended by more than 130 experts, including Ministers, ambassadors, government officials, trade economists, university lecturers, development partners and youth and women’s representatives from Kenya, Burundi, South Sudan, Somaliland, Tanzania, Rwanda and Ethiopia. Betty Maina, Kenya’s minister for trade and industrialisation, explained that her country pursues growth in trade by identifying different markets to its products. She stressed that to maximise benefits from the AfCFTA, greater attention must be geared towards supply chains in agricultural commodities and processed food products to scale it up to the continental level. “We need to up our game and I am glad that large numbers of young people enter the food processing industry, which provides a lot of jobs for our youth”, she said. Stephen Karingi, Director Regional Integration and Trade Division at the ECA, who also attended the event, said that by 2040 the AfCFTA has the potential to increase the value of agricultural and food...

Kenya could be one of the major beneficiaries of Africa’s free trade area once the treaty starts rolling out in July. The Africa Continental Free Trade Area (AfCFTA) is expected to create 2 million jobs for East Africans, with the bulk expected to go to Kenyans because of the quality of human resource talent.Implementation of the AfCFTA is expected to ease movement of goods and people across Africa, meaning Kenyans will be able to easily access better jobs in other countries that currently have restrictions on foreign labour.A new report also notes that the free trade area will increase the exports from East Africa to the rest of the continent by $1 billion (Sh100 billion).“It is the citizens of East Africa that will be the principal beneficiaries of the AfCFTA,” said the report by the United Nations Economic Commission for Africa and TradeMark Africa.“East Africa has a lot of talented young people – often university graduates – who are un- or under-employed in their home countries. A more open continental labour market will go a long way towards addressing skill-shortages… and provide the freedom for individuals to live and work where their talents are best rewarded.”The region is also expected to receive a further Sh180 billion ($1.8 billion) in welfare gains. The flip side is that local firms might find it hard to penetrate other markets as well as protect their local turf, as products from other regions find their way freely into the Kenyan shelves.While the increased competition could...

Trading in Africa’s free trade area is scheduled to begin on July 1. [caption id="attachment_52480" align="aligncenter" width="656"] The African Heads of States and Governments pose during African Union (AU) Summit for the agreement to establish the African Continental Free Trade Area in Kigali, Rwanda, on March 21, 2018. AFP PHOTO[/caption] This ambitious initiative creates a single market for goods and services and a customs union with free movement of capital and business travellers–the world’s largest given Africa’s 1.2 billon population and combined GDP of over $2.5 trillion. A recent article by Landry Signé in Foreign Affairs titled “How Africa Is Bucking the Isolationist Trend,” noted that if the continental trade agreement is successfully implemented, Africa will have a combined consumer and business spending of $6.7 trillion by 2030. The stakes are high. The newly-appointed African Continental Free Trade Area (AfCFTA) Secretary General, Wamkele Mene, and his team must, by necessity, prioritise communication and advocacy. In recent months, decisions have been made at an unprecedented rate, meaning that many member states are yet to fully appreciate the implications of this mammoth project. Hence the need to inform and educate on what it entails. It is imperative that before July 1, 2020, there be strategic engagement with all Ministries of Finance, Trade/Industry and Immigration on the continent to arrive at a common understanding of what lies ahead. Africa has made tremendous strides in information and communication technologies (ICTs) having heavily invested in fibre optics that would be instrumental in developing an effective communications strategy....

[caption id="attachment_52477" align="aligncenter" width="890"] Kenya-Uganda border at Busia: Kenya loses over Sh70 billion in Customs duty annually due to fraud in cross -border trade. FILE PHOTO | NMG[/caption]   Kenya loses over Sh70 billion in Customs duty annually due to fraud in cross -border trade, a report released by a US-based illicit financial flows think tank says. The Global Financial Integrity (GFI) in its latest report on trade fraud found that some goods valued at Sh286 billion are traded across Kenya’s borders without being accounted for, essentially evading Customs tax amounting to Sh71.5 billion. This is close to 70 percent of what the Kenya Revenue Authority collects in import duty annually. The practice commonly known as misinvoicing is said to be rampant in the trade of footwear, vehicles, medical products, electrical machinery and aircraft with the sub-Saharan Africa countries unable to account for goods worth Sh2.72 trillion traded across their borders. GFI uses data submitted by governments each year to the United Nations Comtrade database and analyses it to identify the gaps from what their partner countries have reported to identify value gaps, or mismatches, in the reported data. “Every year, trade misinvoicing creates a value gap of hundreds of billions of dollars in emerging market and developing economy countries, resulting in massive losses of related duties and value-added taxes. This has a corrosive impact on growing economies and the ability of the international community to achieve the UN Sustainable Development Goals by the 2030 deadline,” GFI wrote in the...

The European Union and the African, Caribbean and Pacific (ACP) countries are extending the Cotonou Agreement to December this year, after failing to reach a consensus on the structure of future relations. When the EU and 79 ACP countries adopted the Cotonou Agreement in 2000, they aimed at reducing/eliminating poverty and integrating ACP countries into the world economy. EU chief negotiator Jutta Urpilainen said the blocs are looking at a post-Cotonou partnership that addresses today’s realities, meets mutual needs and champions a common vision of solidarity and progress. The current agreement that governs trade and political relations between the two blocs was set to expire on February 29. It is based on three pillars: Development co-operation, economic and trade co-operation and political dimension. Formal negotiations between the EU and ACP countries have been ongoing since October 2018 but differences on the issue of migration and trade regimes has made it impossible for the groupings to reach a consensus. Analysts say that following Brexit and with new realities particularly the emergence of China in world trade and geopolitics, ACP countries want to push for a binding agreement that addresses their interests. For Africa, mutually beneficial strategic partnerships akin to those being pursued with individual countries like UK, US, China and Russia are key. Failure to reach agreements on the economic partnership agreements, a key component of the Cotonou Agreement has exposed structural weaknesses in EU’s relationship with ACP countries, leading to prolonged stagnation in trade. “The Cotonou Agreement has benefited Africa in...

Spotted: African company, Trademark East Africa, has created an information network for small businesses in East Africa. The network aims to make their goods more competitive, by reducing trade barriers and improving transparency. Trademark’s Trade Logistics Information Pipeline (TLIP) was created to reduce barriers for trade. Traditionally, there has been no communication between all the actors involved in cross-border trade in East Africa, and this has meant that goods and services are nearly impossible to track. No individual actor along the chain can account for where a product is or how long it will take to ship. The TLIP connects small producers to foreign buyers and provides an easy-to-use information network that facilitates transparent and timely cross-border trade. Small business owners can communicate directly with foreign buyers and both parties can see how the product moves through the trade chain. This system ensures all steps in the process are synchronised, meaning that the products move from the producer to the buyer faster and with more transparency. TLIP uses blockchain technology, so all parties involved in the transaction are looking at the same source information. https://youtu.be/nxhnjUq2jx4

The Personal Representative of the German Chancellor for Africa, Mr. Guenter Nooke who was on a working visit to Tanzania, yesterday held bilateral talks with EAC Secretary General Amb. Liberat Mfumukeko at the EAC Headquarters in Arusha. The two leaders discussed development cooperation between the Federal Republic of Germany and the EAC on matters relating to regional economic integration, with particular focus on Health and Agriculture, as well as Customs and Trade sectors. On his part, Amb Mfumukeko said the EAC and Germany have enjoyed a long standing partnership for the last 20 years, with commitments from the German Government amounting over Euros 470 million. He also requested Germany, through Mr. Nooke, to consider more support in Agriculture, Industrial development especially Agro-processing, and ICT sectors as part of institutional transformation in addition to the areas that the Federal Republic is currently supporting. Amb Mfumukeko reiterated that the EAC was deeply interested in penetrating the German and European market in general, which he described as being large and vibrant, adding that the region also hopes to benefit from technology transfer from Europe’s largest economy. Germany has long supported the EAC, and for the last 20 years spent about US$508 million to the region. The joint cooperation focuses on the areas of economic and social integration as well a health. Some of the Germany supported projects in the EAC include EAC Immunization Programme, EAC Regional Network of Public Health Reference Laboratories for Communicable Diseases Project, EAC Scholarship Programme; the Lake Victoria Basin...

Globally, seaports are critical components in an inter-connected system due to their ability to handle the logistics involved in managing and transporting cargo destined for the hinterland through various means of transport. In Africa, ports form a basis on which economies compete for a piece of the regional import and export cake as they are a vital part of the supply chain, with each port having an expansive hinterland, often spanning many countries.The Port of Mombasa remains an important part of our national economy and intermodal transportation system. More than 80 per cent of the cargo entering Kenya and East Africa at large arrives by ship and is then transported by road to over 200 destinations across the region.Economic growth has opened up our ports to more imports from markets across the globe, while the growing inbound volume of goods has come with its own share of challenges, consequently leading to tremendous heightened congestion in our ports. Projections for the next decade indicate that some ports will triple their container capacity and freight throughput. To accommodate the rise in global imports, the industry is shifting more to an “inland port” model, where inbound goods are quickly off-loaded from ships and moved to inland distribution centres for subsequent handling and re-distribution within the hinterland.Apart from supporting the burgeoning container ship capacity, the inland ports also play a significant role in easing access to diverse hinterland-bound transport infrastructure.The recently launched Naivasha Inland Container Depot is one of Kenya Ports Authority’s strategies to...

The real impact of commerce under a Pan-African deal to establish the world’s largest free-trade area will probably only be seen in three years, according an architect of the pact. While the first trade under the African Continental Free-Trade Area, which could cover a market of 1.2 billion people with a combined gross domestic product of $2.5 trillion is set to start July 1, it will be “very modest,” Carlos Lopes, the former executive secretary of the United Nations Economic Commission for Africa, said in an emailed response to questions. That’s because a road map, laws and support mechanisms to facilitate continent-wide trade has to be finalized, he said. Lopes led the unit that provided technical support to the African Union, which is spearheading efforts to establish the continent-wide deal. Africa lags behind other regions in terms of internal trade, with intra-continental commerce accounting for only 15% of the total, compared with 58% in Asia and more than 70% in Europe. The African Export-Import Bank estimates intra-African trade could increase by 52% within a year of the pact’s implementation and more than double during the first decade. The agreement requires member states to work toward eliminating or lowering tariffs on 90% of goods to facilitate the movement of capital and people, and create a liberalized market for services. Tariff concessions, rules of origin and protocols governing services are still to be agreed on An agreement on tariffs could take time because countries are expected to offer concessions on an individual basis...

Kenyan importers and exporters will soon be compelled to identify the individuals or companies sending or receiving packages from around the world. More than 19 government agencies are involved in the drafting of a Bill aimed at cutting illegal transactions and bringing transparency into the shipping industry and which will also require banks and other financial institutions to identify who is sending and receiving money and to assess the risk that the transaction might be used for illegal purposes. The draft is expected to be presented to Parliament for enactment before the end of this year. The law, commonly known as "Know Your Customer," once adopted, will be aligned with the East Africa Protocol on the Prevention and Combating Corruption and Illegal Trade. The government agencies involved are led by the Ministry of Interior, with Treasury and Judiciary having endorsed its proposal, saying it will help in the fight against money laundering and shipments of fake drugs, narcotics, weapons and wildlife parts to, from or through the country. Last week, Interior Cabinet Secretary Fred Matiang’i, Central Bank of Kenya Governor Patrick Njoroge and the director of Public Prosecutions Noordin Haji led other agencies in high level conference of senior government officials in Mombasa where they endorsed the proposed law. "The criminal activities we experience in our financial institution linked to illegal freight trade has damaged and endangered Kenya's economy. In future, banks will have to adopt the ‘‘’Know Your Customer,’ scheme before any transaction is completed but at the same...