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 Irish Minister for Business, Enterprise and Innovation, Ms. Heather Humphreys will lead Enterprise Ireland’s trade mission to Kenya as the nation seeks opportunities in Kenya’s agriculture, education and construction sectors. The two-day trade mission will take place between November 14 and 15, where Irish companies and government officials will have opportunities to discuss areas of mutual co-operation with their Kenyan counterparts. The trade mission aims to raise awareness of Ireland as a source of world-class products, services, and technologies. As Europe’s fastest-growing economy with the fastest growing tech population in Europe, Irish businesses are making a global impact, delivering innovative solutions to business partners across the globe. Coupled with a thriving startup ecosystem and having one of the world’s most resilient supply chains, Ireland is delivering a big impact on many industries globally. Several Irish companies are additionally expected to announce deals they have secured in various sectors over the two-day period. Latest data from Enterprise Ireland indicates that Ireland exported goods and services worth €29.405 million (Ksh3.35 billion) to Kenya in 2018 comprising of food, industrial, life sciences, and consumer products. “With Kenya currently pursuing the ‘Big Four’ agenda, part of which includes widening Universal Healthcare (UHC), there are aligned opportunities for Kenyan and Irish companies. This is a promising market for Irish companies that have excelled in the delivery of quality and affordable medical devices. As a world leader in agri-technology and agri-engineering Irish companies have also excelled in the dairy industry which is an important sector for Kenya. We...

A team of experts is traversing the Northern Corridor trade route, surveying the road network as they look to promote trade within the Great Lakes region. According to the traffic Boss Stephen Kasiima, while poor road construction is a factor for the many road accidents along on Uganda’s roads, the situation is made worse by the poor behaviour of road users. Source: NTV

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...

Kenya’s main port of Mombasa handled 9% more cargo in the first nine months of this year compared with the same period in 2018, due to greater handling capacity and more cargo headed to its neighbouring countries, its operator said. Mombasa, a gateway to east and central Africa, handles imports and exports for Kenya and other countries including Uganda, Rwanda, Democratic Republic of Congo, South Sudan and Burundi. The port handled 25.45 million tonnes of cargo between January and September compared to 23.36 million tonnes registered during a similar period in 2018, an increase of 2.09 million tons. Container traffic increased by 10.7% to 1.06 million Twenty feet equivalent units (TEUS) over the nine-month period while cargo destined for other countries was up 136.8% to 1.87 million tons from 791,257 tonnes realised during a similar period in 2018. Mombasa port was expanded in 2012 in work that included construction of a new container terminal and dredging to allow bigger vessels access to the port. The first phase of the expansion project partially-financed by Japan was inaugurated in 2016. This new container terminal alone “handled 381,288 TEUs in the period January – September 2018/2019, which is equivalent to 36.0 percent of the total container traffic handled in the Port”, Daniel Manduku, the port’s managing director, said in a report seen by Reuters on Tuesday. Kenya is also building a second port in Lamu, north of Mombasa, with a capacity of 23 million tonnes per year. Source: Reuters

$3tn GDP growth opportunity if the African Continental Free Trade Area (AfCFTA) is fully implemented Biggest potential economic gain and business opportunities will be from from growth in trade between African nations Countries with open economies and significant cross-border trade set to benefit most quickly South Africa, Ghana, Côte d'Ivoire, Kenya and Morocco will grow most from AfCFTA Conflicts with older regional free trade agreements a major hurdle Manufacturing among sectors with biggest growth opportunities Success dependent on African countries putting rules, regulations and mechanisms in place around Rules of Origin, digital payments and the elimination of non-tariff barriers. New research from global law firm Baker McKenzie and Oxford Economics – AfCFTA's US$ 3 trillion Opportunity: Weighing Existing Barriers against Potential Economic Gains - shows that if fully implemented, the African Continental Free Trade Area (AfCFTA) will unlock significant but uneven growth opportunities on the continent. The African Union is putting the Africa Continental Free Trade Area (AfCFTA) into operation. It will be the world's largest free trade area by number of countries and is so far in force across 27 countries. Open economy key to success Some countries are currently better placed than others to reap the rewards of intraregional trade and numerous obstacles mean that the tangible benefits of the agreement will likely only be realized from 2030. The report finds countries with good existing trade integration with their neighbours and which have open economies are most likley to benefit economically from lower trade tariffs. For example, South...

While attending the 23rd Intergovernmental Committee of Senior Officials and Experts (ICSOE) meeting as a private sector and youth participant, one topic that inspired me was “Faster implementation of AfCFTA (African Continental Free Trade Area) for job creation for the youth”. The theme of the meeting organised by the United Nations Economic Commission for Africa (Uneca) in Asmara, Eritrea, was “Leveraging new opportunities for regional integration in East Africa”. There are many ways African youth and women can benefit from the African Continental Free Trade Area. Besides market linkages and increased intra-African exports, crucially, it is estimated that the bloc will create almost two million jobs. Africa has a very high youth unemployment rate and countries should equip their young people for the jobs. In the white-collar segment, for instance, mismatch between education and the labour market is a leading causes of unemployment. FOOD SECURITY Credentials from African universities should be acceptable all over and outdated education curricula banned. Improved demand for products means increased supply, hence the need to expand the workforce to deliver orders on time and with quality goods and/or services. Africa imports more than $500 billion food annually yet it is favoured in both geographical and demographic factors to be the world’s food basket. Sadly, the average age of an African farmer is 60 years yet the youth can feed the world by ensuring food security and value addition of agricultural produce. Agriculture is the backbone of most African countries. Therefore, agriculture/agribusiness should be the largest...

The government is banking on infrastructure projects in the coastal region to provide jobs and boost regional trade. The Ministry of Transport sees the construction of Dongo Kundu bypass, which will link the Northern Corridor, Port of Mombasa, the Moi International Airport and the newly-refurbished Kipevu Container Terminal, as a game changer. Now on its second phase, the project is being implemented by the Kenya National Highways Authority (KeNHA) in partnership with Japan International Cooperation Agency (Jica). The first phase was built at a cost of Sh11 billion with the second phase projected to cost Sh24 billion. President Uhuru Kenyatta launched construction of the second phase on October 19. It involves building two bridges at Mwache and Mteza, measuring 900 metres and about 1.4 kilometres, respectively. There will be an 8.9km dual carriageway between Mwache junction and Mteza to connect to Kibundani (6.9km) and link the highway with Likoni-Lunga Lunga Road. A sightseeing bay will also be built and 88 hectares of mangroves planted. Transport Cabinet Secretary James Macharia said the Dongo Kundu link will improve the port’s cargo-handling capacity to serve Kenya’s growing economy and position the facility as the port of choice for neighbouring countries. “Through the project, we are also developing the requisite infrastructure to support the upcoming Likoni Special Economic Zones and the Dongo Kundu Free Port. This will ensure economic prosperity for Kenya and the region,” Mr Macharia said in a statement. FOREIGN INVESTMENT It’s designed to be a multi-sectoral facility, comprising industrial parks, free...

Vera Songwe, the Executive Secretary of the UN Economic Commission for Africa (UNECA), on Tuesday last week opened the 23rd meeting of the intergovernmental committee of senior officials and experts from 14 eastern African countries in Asmara, Eritrea insisting on the importance of increasing regional trade and implementing the African Continental Free Trade Agreement (AfCFTA). Leveraging new opportunities for regional integration was the theme of the ECA annual meeting. In the eastern trading Africa bloc, she said, the implementation of the continental free trade agreement could result in $1.8 billion welfare gains and creation of 2 million new jobs. The New Times’ James Karuhanga caught up with Songwe to talk about, among others, why the historic agreement is not just another trade agreement, what the meeting’s host country – which was hosting the meeting for the very first time – has to offer, and the importance of the continent’s aspirations for peace and harmony. Excerpts: In the discussions on leveraging new opportunities for regional integration in eastern Africa, the AfCFTA keeps coming up again and you particularly emphasised that this is not just another trade agreement. Why? Like I said, this is not just another agreement because it actually is, if it is taken right, a stepping stone for huge investment compact for the continent. The Continental Free Trade Area Agreement is, on paper, a policy statement but I think when you translate that policy statement into actuality, it means that we need to create industries, develop infrastructure, build roads, make our airlines...