The U.S. ditched the Trans-Pacific Partnership, while across the Atlantic, the U.K. is trying to extract itself from the European Union and its single market. But while free trade is under threat in much of the world, African countries are heading in the other direction: the continent is on track to create the largest free trade agreement by population that the world has seen since the 1995 creation of the World Trade Organization. That organization has 164 member countries. On May 30, the African Continental Free Trade Area (AfCFTA) will become a reality. All but three of Africa’s 55 countries have signed up, creating a free trade area that covers more than a billion people and a collective GDP of over $2 trillion, and includes most of Africa’s largest economies, including South Africa and Egypt. If hold-outs Benin, Eritrea and Nigeria—Africa’s largest economy—join in, that’s a total of 1.2 billion people and $2.3 trillion in GDP. By way of comparison, NAFTA and the EU-Japan free trade agreement each cover a collective GDP of around $22 trillion. But even when added together, they don’t cover as many people as the AfCFTA will if every African nation joins. Here’s what you need to know about the deal that could transform Africa’s business landscape. WHAT’S THE GOAL? Trade within Africa is in a dire state. A mere 17% of African countries’ exports go to other African countries—compare that with intra-regional trade levels of 59% in Asia and 69% in Europe. That means Africa doesn’t feature much in the way of cross-border value chains. Why? There’s currently a...

The Ugandan and Kenyan government with the mediation of the United Nations-UN have agreed on joint collaboration to promote peace at the different border points especially in places with Normads and Pastoralists. The agreement comes following week long discussions between different stakeholders including the Karamoja Affairs Minister, John Byabagambi, Eugene Kijana Wamalwa, Kenya’s Devolution, Arid and Semi-Arid Lands Cabinet Secretary, the Aterker community in Karamoja, Members of the local development groups in Kenya and Uganda and the local leaders from districts around the Uganda-Kenya border. Groups of people speaking the same language including the Turkana in Kenya, Nyangatong of South Ethiopia, Topoth of South Sudan, Karamojong and Iteso in Uganda used to live in harmony more than 100 years ago  since they had the same cultural origin, the Nilo Hermites. However, the groups started fighting each other after the partition of Africa in 1930. The fights fueled cattle rustling leading to cross border killings. Whereas several leaders called for harmony and an end to cattle rustling and infighting among these people, the killings continued prompting the intervention of UN. Now, Rosa Malango the UN Resident Coordinator, says both Uganda and Kenya have agreed on the Joint Cross-Border Program to promote peace amongst the pastoral communities in the region. “We need to work with the governments of Uganda and Kenya to bring the region together because in nomadic communities there is an issue of competition for resources like water and pasture. We need to find a way we can work with the...

The Kenya Revenue Authority (KRA), The Kenya Ports Authority (KPA) and the Kenya Shipping Agents Association (KSSA) have signed a charter to enhance cargo clearance efficiency and boost regional trade. The Transhipment Standard Operating Procedures (SOPs) charter is part of a commitment to boost port operations and clear bottlenecks affecting efficient cargo movement. The charter will ensure clear performance targets and processes for the agencies operating at the Mombasa port. Each party will be given clear timelines while emphasis will be placed on the provision of adequate resources to clear transhipment cargo expeditiously. At the signing ceremony, which was held at the KPA headquarters in Mombasa last week, the KRA Customs and Border Control Commissioner, Kevin Safari described the formulation of SOPs as a key milestone for the shipping stakeholders. Mr Safari was accompanied by KPA general manager (operations) Captain William Ruto, and the Kenya Shipping Agents Association CEO Juma Ali Tellah. Source: Business Daily

The coming into force of the African Continental Free Trade Area (AfCFTA) Agreement, on May 30, 2019, is a turning point for the African continent, experts and integrationists have said. The development means that AfCFTA is now a binding international legal instrument. “For many who have yearned for an integrated Africa, today is that day where hope of an Africa that trades more with itself than the rest of the world is palpable,” Chijioke Odo, Trade Advisor at international accounting firm Deloitte, tweeted yesterday. He added: “Whilst some would argue that removing tariffs would not necessarily increase intra-Africa trade (with logistics, free movement of persons and territorial protectionism being the notorious impediments to intra-Africa trade), it is my view that AfCFTA will galvanise progress.” Change is coming to Africa and those who have not recalibrated their business for the incoming market would be left behind,” he added. Francis Mangeni, Director for Trade, Customs and Monetary Affairs at the COMESA Secretariat, told The New Times on Thursday that the entry into force of the trade deal is “a turning point in African history.” The development, he said, opens up a “market of over 1.2 billion people”. The region’s consumer and business spending is over US$4 trillion annually and is estimated to hit US$5.6 trillion by 2025. “The private sector is awake to these prospects and is mobilising,” Mangeni said, adding that “125 companies already have a multinational presence across Africa and a number of developed countries.” Some 400 pan-African companies have...

The Head of State spoke at State House, Nairobi, when he received a special message from President Nana Akufo Addo of Ghana delivered by special envoy Joseph Kofi Adda who is also his country’s Minister for Civil Aviation. Kenya and Ghana were the first countries in Africa to ratify the AfCFTA protocol which aims at creating a single continental market for goods and services, with free movement of investment and persons. President Kenyatta said the two countries, which share a common liberation history, are keen to ensure Africa achieves economic integration as envisioned through AfCTA. “We follow the legacy of our forefathers who gave us political liberation to bequeath the continent economic integration,” the President said. President Kenyatta however cautioned that African countries need to be honest with each other if aspirations of full economic integration have to be met. “We must find a way where all of us come out as winners. We want Africa to come together for the mutual benefit of all countries,” he said adding that Kenya looks forward to the final signing of the AfCFTA agreement. Earlier, President Kenyatta held talks with Fiji Prime Minister Josaia Voreqe Bainimarama who is in the country to attend the ongoing UN-Habitat Assembly at Gigiri, Nairobi. The discussion between the two leaders touched on the historical similarities between Fiji and Kenya, the two nations having been British colonies, and opportunities for economic cooperation especially in trade and tourism. Kenya and Fiji are top global tourism destinations.  Source: Capital Business

INTRODUCTION As of April 29, 2019, 22 countries have deposited their instruments of ratification of the African Continental Free Trade Area (AfCFTA) agreement[1] to the African Union (AU), meeting the threshold for the agreement to come into effect. The AfCFTA entered into force on May 30, 2019. The significance of the AfCFTA cannot be overstated: It will be the world’s largest free trade area since the establishment of the World Trade Organization (WTO) in 1994.Landry Signé has estimated that under a successfully implemented AfCFTA, Africa will have a combined consumer and business spending of $6.7 trillion in 2030.He also finds that the AfCFTA will have a significant impact on manufacturing and industrial development,tourism,intra-African cooperation, and economic transformationUNECA has predicted it will raise intra-African trade by 15 to 25 percent, or $50 billion to $70 billion, by 2040, compared to an Africa without the AfCFTA. The International Monetary Fund (IMF) similarly projects that, under the AfCFTA, Africa’s expanded and more efficient goods and labor markets will significantly increase the continent’s overall ranking on the Global Competitiveness Index.Increased market access, in turn, is expected to enhance the competitiveness of industries and enterprises, the exploitation of economies of scale, and the efficacy of resource allocation. While the AfCFTA’s ratification is a cause for celebration, much work remains as critical parts of the agreement have yet to be completed—including countries’ schedules of tariff concessions and services commitments, rules of origin, investment, intellectual property, competition, and a possible protocol on e-commerce. The extent to which the...

Rwanda is looking for $1.3 billion to fund the construction of the proposed Isaka-Kigali standard gauge railway that links Rwanda and Tanzania, a senior Rwandan official said Tuesday. The figure is higher than $1.2 billion revealed during the launch of the 400 km railway line on January 20, 2018 in Dar es Salaam. "The study for Isaka-Kigali SGR is completed," said Jean de Dieu Uwihanganye, Minister of State in charge of Transport, while speaking at a local radio station talk show. "Rwanda is looking for a staggering around $1.3 billion to finance its portion with the aim of reducing logistics costs, boosting trade and easing the movement of people between Rwanda and Tanzania." Investing in transport projects is among the Rwandan government's top priorities as a way to attract investment in productive sectors, improve business environment and increase jobs opportunities, he said. Initial studies had shown that the project that will connect landlocked Rwanda to the Dar es Salaam port was estimated to cost $2.5 billion. Source: Rwanda Today

The operation lends support to the government’s ‘Big Four’ agenda which prioritises agriculture, affordable housing, universal health coverage and manufacturing. In agriculture, the Kenya inclusive growth and fiscal management development policy financing facility will support critical reforms that will enhance competition and market transparency, reduce corruption opportunities and help Kenyan farmers to achieve higher productivity and to increase their incomes. Reforms supported by the facility include better targeting of subsidies for agricultural inputs to reach the intended beneficiaries (using e-vouchers and biometric digital identification), reducing inefficiencies and leakages in the procurement and marketing of fertiliser and establishing a warehouse receipt system and a commodities exchange to help farmers get easier access to credit and to reduce post-harvest losses. By supporting the advancement of digitisation through the creation of the national digital ID and pushing for access of internet services to all Kenyans, the facility will enhance service delivery by the government to its citizens, and reduce the need for face-to-face interactions and corruption opportunities. In housing, the operation will remove major regulatory constraints that developers face, help them lower construction costs and thereby increase the supply of less-expensive housing units. The reforms supported by the operation are set to unlock the availability of longer-term home loans and catalyse the development of the housing finance market in Kenya, which is expected to triple the proportion of households in Kenya who have access to a mortgage. The operation will also provide support to the government’s medium-term fiscal consolidation plan by supporting measures...

Kenya is deliberating on how to increase trade and counter challenges of a post BREXIT trade cooperation arrangement. Speaking at the Intra-Commonwealth trade summit for SMEs, Trade Cabinet Secretary Peter Munya said the cooperation will help small and medium enterprises grow their production to international standards. “The discussion on growing Intra Commonwealth Trade on options for policy and regulatory cooperation is timely as it will tackle policy options for increasing trade and the advantages, possibilities and challenges of a post BREXIT trade cooperation arrangement,” Munya said. In 2018, Kenya's exports to UK increased to Sh40.19 billion from Sh38.55 billion the previous year. Exports to the EU also rose to Sh131.20 billion from Sh125.61 billion over the period. Imports from the UK and EU increased to Sh31.55 billion and Sh219.60 billion respectively in 2018. However, with the Brexit scenario, Kenya fears losing business with both partners where also the UK is expected to lose trade deals if it withdrawal from EU. UK is part of close to 40 trade agreements which EU has with more than 70 countries. Munya however said that trade between UK will continue. Limited access to finance and beeing slow in incorporation of latest technologies have been highlighted as major challenges hindering the growth of SMEs and dragging the country from competing at the global market level. Others include unawareness to international standards and quality assurance, and lack of research and innovation on new products. The corporation formed by commonwealth secretariat composed of 53 countries is set...

Kenya remains key to Somaliland’s quest for international recognition, the Horn of Africa country’s Ambassador to Kenya Bashe Omar has said . Last week Somaliland leaders met Kenya’s top political leaders and business community to discuss ways of strengthening economic and political partnerships. Somaliland leaders, who met former Prime Minister Raila Odinga in Nairobi, pushed to strengthen trade ties between the two countries. The meeting, which was facilitated by Mr Omar, discussed, among other things, ways of improving trade and security. Mr Odinga noted the importance of Somaliland given its and stability in the Horn of Africa region. RECOGNITION At the same time, Majority Leader in Kenya’s National Assembly Aden Duale invited Somaliland’s two political parties UCID and Kulmiye to the Kenyan Parliament where ways of strengthening best practices between the two countries, was discussed. Kenya has continued to support Somaliland’s push for recognition besides increasing trade opportunities between the two countries. Somaliland remains unrecognised 28 years after separating from Somalia in 1991. However, Ambassador Omar believes Kenya can play a big role in helping his country gain recognition and grow economically. “Kenya is important in our quest for recognition. We know it can play a key role in pushing for our economic stability and international recognition,” Mr Omar said. Source: Wardheer News