Last week, while addressing the United Nations General Assembly in New York, the Secretary General of the United Nations Centre for Trade & Development Dr Mukhisa Kituyi expressed concern at the frequent arrests of petty traders across African borders. As UNCTAD Secretary General Kituyi should know the challenges that face cross border trade. A random 23-year old Tanzanian woman trader has a pretty good idea what it feels like to have 5,000 day old chicks razed to ashes when she not so long ago borrowed money and invested in what she thought was a life changing, one-time, opportunity. She lost all her investments and was the subject of an intended prosecution for conducting illegal business against known Tanzanian Laws. Welcome to how Africa operates. It’s a jungle out here where proximity does not mean the same thing as closeness. Where Marwa Chacha who lives in Suba-Kuria district in Migori County in Kenya is not expected to share milk let alone trade it with Chacha Marwa whose residence is 500 metres away in Sirari in Mara Province. Government functionaries will read a riot-act of operational rules that are intended to protect the interests of local trade from cross border “greed” and interests. The rules are great in as far as intent is concerned. The trouble with these rules is that they are a coinage of the colonial era of cold-war divisions that were meant to achieve economic enclaves through blockades. These economic enclaves were by definition meant to be sources of...

The African continent contains some of the fastest growing economies in the world. Collectively, growth in Sub-Saharan Africa alone is projected to climb to an average 3.6% in 2019–20, up from 3.1% in 2018, according to the World Bank. Yet it is also home to many of the poorest countries, with the lowest GDP per capita. With its fast-growing population, rapid urbanization, and expanding middle class, the potential for further economic growth in Africa is enormous. But there remain many barriers to realizing anything near the continent’s full potential. In this supplement, we explore some of the most significant and promising forces breaking the old barriers to free trade and communication.  Prominent among these is the recently concluded African Continental Free Trade Agreement (AfCFTA), whose implementation by all 55 members of the African Union would create a new $3 trillion trade bloc that has the potential to transform historically low levels of intra-African trade. Larger and more integrated markets mean greater specialization and scaling up of production, boosting value-adds and helping to integrate African producers into global supply chains. Greater scale and larger markets should in turn make African hubs more attractive to international investors. But for intra-African trade to grow substantially, civil infrastructure, and particularly overland transportation links, need to improve. We examine the role of Chinese banks and companies in building new railways and other transport infrastructure and refurbishing older facilities, which has had a particularly large impact in East Africa. This could provide a model for other...

Sorena Sattari, Iran's Vice President for Science and Technology, has traveled to the East African region to explore business opportunities there and boost bilateral trade ties. Heading a delegating comprised of heads of 45 knowledge-based firms, Sattari will sit down with senior officials and investors from Kenya and Uganda, IRNA news agency reported on October 2. Boosting exports and strengthening business and trades ties in various fields, including health, medicine, chemistry, electronics, mines and engineering have been set as the main objectives of the visit. In each of the two African countries, the Iranian delegation will attend meetings where ways of boosting commerce with their counterparts will be surveyed. The unique geography and apparent suitability for farming made East Africa a target for European exploration, exploitation and colonization in the 19th century. Today, tourism is an important part of the economies of Kenya, Tanzania, Seychelles and Uganda. Source Trend News Agency

- SGR cargo from the port of Mombasa to Nairobi is now being ferried on double-stacked trains - The 2.7 kilometre bridge linking the port to the Mombasa SGR terminus has also started operations - An imported car will now be able to reach Nairobi without being driven for a single kilometre The transportation of cargo on the Nairobi-Mombasa Standard Gauge Railway line has received a massive double boost. In a move that will excite importers, exporters and consumers, the Kenya Ports Authority (KPA) started ferrying cargo on double-stacked trains from the port of Mombasa to the Inland Container Depot in Nairobi on Sunday, September 30. Under the new form of freight transport, trains on the line will now carry two layers of cargo containers. In yet another development that will further boost business at the port, the 2.7 kilometre bridge linking the port to the Mombasa SGR terminus has also started operations, becoming the first SGR bridge that crosses the Indian Ocean. The activation of the line will now ease movement of bulky and heavy goods such as coils, steel cars and iron to the train station. This essentially means that KPA will no longer use road trucks to feed goods from ships to the rail, a move that is expected to lower transport cost and accelerate the movement of goods. Imported cars destined for regions other than Mombasa, and which used to be ferried out of the port via trucks, will now be ferried via the SGR wagons...

Nairobi. High cost of additional equipment for tracking and tracing goods has hampered smooth implementation of the Single Customs Territory (SCT), according to the business fraternity. The system was rolled out by the East African Community (EAC) last year to enable faster clearance of goods and reduce the cost of doing business in the region. Under SCT, vehicles carrying imported goods from the point of entry to the destination within the region have to be tracked using electronic devices to ensure security and tax compliance. SCT is based on destination model and under it, goods are cleared at the first point of entry into the community and taxes are assessed and paid in the destination country. Business leaders say the system has eased cross border movement of goods in the region and that by December last year, all goods were rolled onto the SCT. However, the business leaders in Tanzania are concerned that drivers carrying goods beyond the country’s borders have to buy other tracking devices. “This is due to the fact that the Tanzania Revenue Authority (TRA) covers for transit goods only within Tanzania,” said Frank Dafa, a trade policy specialist with the Confederation of Tanzania Industries (CTI). He said the drivers taking goods to Kenya, for instance, have to buy new tracking devices from the Kenya Revenue Authority (KRA), which are said to cost up to $1,000 (about Sh2.3 million). He made the remarks in Dar es Salaam last week when briefing journalists from the six East African...

Negotiations between Nairobi and Dar es Salaam seem to have paid off with exports to Tanzania increasing between April and June 2018. Latest figures from the Kenya National Bureau of Statistics (KNBS) indicate that the value of exports to Dar increased by more than a third to Sh7.4 billion in the second quarter of the year compared to exports of Sh5.5 billion in the same period last year. “Tanzania recorded the highest increase in the value of total exports over the period at 35.7 per cent to Sh7.4 billion. This was due to increased exports of medicaments, soap and printed books; and re-exports of tractors and trailers,” said KNBS in a report on Kenya’s Balance of Payments for the second quarter of 2018. Trade relations between the two economies have been frosty, with exports to Tanzania dipping to a nine-year low last year, according to figures by the Central Bank of Kenya. Exports to Dares Salaam declined to Sh28.5 billion in 2017 from a high of Sh46 billion in 2012. However, as the trade spat escalated, representatives from the two countries held a series of meetings aimed at restoring commercial links. In July, trade officials from Kenya and Tanzania announced that they had reached an agreement that would ensure smooth trade and diplomatic engagements, including getting rid of several non-tariff barriers. “The meeting recalled and appreciated that previous bilateral meetings have to date resolved several non-tariff barriers and reiterated on the need to generate lasting solutions,” read a joint communiqué...

In March this year, there was a jubilant mood in the Rwandan capital, Kigali, when African leaders gathered to sign an accord herald as a critical step in the actualisation of free trade from Cape Town to Cairo, signalling a new era in intra-African trade. The Continental Free Trade Agreement (CFTA) is a multilateral agreement whose idea was conceived in 2012 and has finally been endorsed across Africa by 44 countries. The vision of the CFTA is to build an integrated market in Africa connecting more than a billion people and harnessing the enormous potential of the continent. Under a free trade agreement, all the signatory countries will agree to reduce trade tariffs and import quotas amongst each other. Principally, the CFTA as it is currently is the initial stage of closer economic co-operation across the more than fifty countries that make up the African Union. Consequently, this should ease Africa’s transition into a fully-fledged union. The CFTA, it is hoped, will mimic the successes of the now faltering European Union whose underlying ethos was the benefit accruing from free movement of people, a customs union, a common market and even a single currency. Effectively, the CFTA is expected to unlock Africa’s potential by shifting focus from being a harvesting ground for resources including human capital and raw materials that are subsequently exported to the more flourishing economies of the West and East for beneficiation. Additionally, there is a spirit of optimism emanating from the benefits that are expected to...

In March this year, more than 40 African leaders signed a free trade pact that aims to make it easier for countries across the continent to produce, sell and do business across borders. Intra-African trade is key to sustainable development and long-term economic security – there’s little debate about that. Yet, the latest figures suggest the recent efforts by African leaders to remove trade barriers isn’t having enough of an impact with internal trade across the continent remaining low. While the African Continental Free Trade Area (AfCFTA) signed in March proves African leaders acknowledge the importance of internal trade, they now need to prove their willingness to remove the existing barriers standing in the way of it – something that will take more than signatures and handshakes. Existing barriers to intra-African trade Despite the signing of trade agreements between a majority of African nations, the free movement of goods and business is still being held back by non-tariffs barriers, red tape, insufficient infrastructure and political conflicts. This has been evident in the East African Community (EAC), which has its own regional trade agreements to boost local business. However, poor relations between neighbouring countries has been an ongoing problem for regional trade, as outlined by TradeMark Africa. Reports of Rwandans with dual Ugandan citizenship being stopped at the border by immigration officials aren’t uncommon. Friction between Rwanda President Paul Kagame and Uganda’s Yoweri Museveni appear to be hindering the progress of trade between the neighbouring countries. Cases like this are still common. East African traders also complain that new...

The global trading regime is in great need of change to avert real and potentially destabilising losses resulting from the escalating trade frictions between the United States and China and elsewhere, experts said. The Trump administration has leaned heavily towards unilateralism in addressing what it sees as unacceptable status quo in which the United States has long been taken advantage of by countries around the world, including its allies, in terms of trade and others, defence included. Trump has fired the first shot in this global trade battle by failing to adequately negotiate. Furthermore, China is increasingly singled out as the source of the world’s trade woes. Caught in the cross fire, many U.S. soybean farmers are feeling uneasy about their coming harvest and have contemplated planting other crops for the next season, even though the Trump administration has said it will offer a package of 12 billion U.S. dollars to compensate for their losses. “I do not want government compensation, I want the Chinese market,” said Don Lutz, a farmer in Scandinavia in the state of Wisconsin. In Brazil, the farmers there seem to have benefited from the U.S.-China trade friction, with the price of Brazilian soy beans rising by over 15 percent year on year on expectations of higher demand from China. “In the past season 2017-2018, we extended the sowing for 4 per cent more and we had a good income. For the new cycle, we tried to expand more, up to 7,100 hectares, and getting an increase...

Kenya is betting on bigger shipments of processed food, tea and coffee to help double its export earnings from the US free-trade deal in five years’ time — marking a shift from its long dependence on apparels. Several Kenyan products, notably apparel and agricultural produce, are big beneficiaries of the preferential African Growth and Opportunity Act (Agoa) arrangement, which has lifted import duty on all eligible products and granted preferential market access upon compliance with Rules of Origin. Apparels have long dominated as Kenya’s biggest export earner in the US with most other product lines unexploited. “While the apparel sector is considered the leader, it will be necessary to equally improve the performance of the other identified sectors to avoid the over reliance on the apparel sector in the US market,” Industry, Trade and Co-operatives secretary Peter Munya says in Kenya’s 2018-2023 strategic plan on Agoa. The country’s export earnings under the Agoa are expected to hit Sh110.5 billion by 2023, representing an 82 per cent leap from the estimated Sh60.2billion realised in 2016. Earnings from processed food exports to the US are expected to grow fastest at an average 28 per cent per annum to fetch the country about Sh3billion by 2023. Coffee exports are expected to post the second fastest growth over five years and realise Sh11.4 billion. Tea earnings are forecast at Sh6.7 billion by the same year. Kenya’s top exports to the US comprise woven apparel, knit apparel, coffee, tea and macadamia nuts. The apparel sector...