The East African Community (EAC) will this financial year prioritise harmonisation of air charges and taxes in a bid to reduce the cost of intra-EAC air travel, according to Mr Adan Mohamed, the Council of Ministers chairperson. While reading the EAC 2021/22 budget, Mr Mohamed, who is also Kenya's Minister for EAC, said the civil aviation and airports sub-sector, although there has been some delays, will focus on implementation of the EAC Upper Airspace Seamless Operations earmarked under the 2017-22 project. During this financial year, he said, the region will implement strategies that seek to reduce the cost of intra-EAC air tickets and air operations. This, Mr Mohamed noted, will be achieved through harmonisation of air travel-related charges and tax regimes, which feed into the price of air travel. EAC has one of the most expensive flight routes, with Entebbe-Nairobi taking the lead. However, despite the high cost, air travel within East Africa has been growing, rising by 3.4 per cent in the past decade against a global rate of 5.5 per cent. It is estimated that 43 per cent of air ticket prices in EAC comprise of regulatory charges and taxes, with regulatory fees accounting for up to 24 per cent. According to a research commissioned by the East African Business Council about air liberalisation, it was found that harmonisation could lead to a reduction in air fares by 9 per cent. The reduction, the report noted, would lead to a 41 per cent increase in frequencies, which in...

One prediction at the outbreak of COVID-19 was that Africa could be the epicentre of fatalities from the pandemic. This hasn't happened. The record of rate of infections, fatalities and recoveries shows that Africa is the second least affected region of the world. The fear that Africa would be the epicentre of the pandemic was fuelled by a few factors. One was the presence of overcrowded informal settlements. Another was weak systems in many countries and the inadequate number of medical personnel across the board. In addition, hospitals lack critical equipment such as testing kits, personal protective equipment and oxygen machines. Most countries adopted national strategies, such as closing borders. Others took a more regional approach. In a recent study I looked at what role regionalism played in containing the pandemic. The porous borders between many countries in Africa presented additional challenges – as well as opportunities – for a regional response to COVID-19. I concluded that a regional approach did help in containing the pandemic because of the opportunity it provided for sharing resources, information, training and testing. For example, effective monitoring and deployment of testing equipment at the borders contributed to limiting cross border transmission of the virus. But I also concluded that, for the future, there is a need to build more regional health infrastructure that can help the continent manage new epidemic outbreaks. Reasons for a regional approach Since March 2020, African countries have adopted various measures to manage the COVID-19 pandemic. Beyond the national responses...

At the heart of all that Malawi desires to achieve in agriculture are extension and advisory services. But we can report that extension services in Malawi are suffering badly under the weight of fertiliser subsidy largesse. Funding patterns in the past 17 years Malawi has implemented fertiliser subsidies show that while extension services, like all the pillars in the Ministry of Agriculture, have been starved of funding, fertiliser subsidy programme has been swimming in public money, literally. In that period, government has allocated over K700 billion to fertiliser subsidy alone, with the allocation grabbing between 30 and 59 percent of the total agriculture budget in more than 12 of the 17 years. One study by the International Food Policy Research Institute (IFPRI) found that between 2007 and 2012, Malawi spent 52 percent of the agricultural budget on fertiliser subsidies, but only one percent went to extension services in that period. Over the past two months, we have visited a total of 30 subsistence farmers individually in Lilongwe, Machinga, Zomba, Kasungu and Dowa to appreciate extension services activities on the ground. We have also examined District Social and Economic Profiles (SEPs) and other records covering 20 of the 28 districts of the country, alongside speaking with several district agriculture officers and extension workers. We can report that extension services are underfunded, understaffed and ill-equipped they are standing on fragile legs. All the 20 districts we covered fall way down government’s own recommended ratio of one extension worker to 750 farmers. For...

WTO members had a first exchange on 11 June on how to monitor Aid for Trade ahead of next year’s Global Review. The discussions at the Committee on Trade and Development were informed by a 10 June workshop on the circular economy. The committee also received updates from donors, international organizations and South-South partners on their Aid for Trade activities, including on “green” projects that promote economic recovery from the COVID-19 pandemic. Committee on Trade and Development Aid for Trade Session The Monitoring and Evaluation (M&E) exercise that will underpin the Aid for Trade Global Review, due to take place in mid-2022, was one item discussed by members at the meeting. Ambassador Mujtaba Piracha of Pakistan, the chair of the committee, outlined the process that he envisaged would lead to the Aid for Trade Global Review based on the theme “Empowering connected, sustainable trade”. The need to facilitate economic recovery from the COVID-19 pandemic was highlighted by some members as a theme to be explored. Members noted that the Aid for Trade Stocktaking event last March was a first attempt to survey the trade impact of the COVID-19 pandemic. Another theme that several delegations highlighted as a topic for consideration was the gender dimension to Aid for Trade and how it can contribute to the work in the Informal Working Group on Trade and Gender. Several WTO members provided overviews of their Aid for Trade activities. The European Union updated members on the European Green Deal and the Third Gender...

Global Britain should look towards supporting the development of Africa’s digital landscape, argue Pauline Girma and Oona Palmer (LSE). In this post, they explain that given that seven of the ten fastest-growing internet populations are located in Africa, and that it is home to what is the youngest population in the world, the future growth of the global e-commerce market depends upon unlocking the continent’s potential. The British Prime Minister has invited President Ramaphosa of South Africa to join the G7 summit in Cornwall, England in early June. The summit will discuss among other things trade and the digital economy. A number of African states are taking part in the WTO negotiations on digital trade, but South Africa has opposed the whole idea of the current WTO negotiations on the topic. Africa presents both significant opportunities and challenges for those looking to expand e-commerce. Despite changing demographics and improving business environments, which have contributed to rising household consumption, infrastructural and technical constraints continue to undermine efforts to scale e-commerce, and hinder Africa’s integration in the global digital economy. Fewer than a quarter of Africa’s roads are paved according to the World Bank, and even the relatively large markets of Nigeria and Kenya struggle with access to electricity. Moreover, the lack of widespread internet connectivity remains a fundamental barrier to the uptake of e-commerce in Africa, with less than one-third of Africans able to access the Internet. Yet the potential for the widespread adoption of e-commerce to facilitate technological ‘leapfrogging’ has...

Malawi and South Sudan on Thursday signed a trade agreement that will see Lilongwe exporting its surplus food to Juba to help ease a widening deficit of cereals in Africa’s youngest nation. The two countries officially signed a memorandum of understanding (MoU) in Juba that allows Malawi  to export to South Sudan products such as maize, maize flour, sugar, rice, groundnuts and beans. The deal also allows South Sudan to export refined petroleum products to Malawi, a move which is expected to cut costs of importing from the Arab world, according to Minister of Trade Sosten Gwengwe. The minister signed the pact on behalf of Malawi Government while South Sudan Minister of Trade Kuol Athian Mawien signed on behalf of South Sudan. In an interview with The Nation from Juba on Thursday, the minister said: “This market is untraditional for us. It is outside Southern Africa Development Community and Common Market for Eastern and Central Africa and we want to make the Africa Continental Free Trade Area [AfCFTA] agreement a reality. “We want more exports and more foreign exchange in Malawi. We want more young people to be motivated to do farming because access to market is now guaranteed.” Gwengwe said that Malawi is looking forward to exporting food from this year’s cereals surplus estimated at 1.2 million metric tonnes (MT). The minister said Malawi’s exports to South Sudan in 2020 were estimated at $3million (about K2.4 billion) while imports were estimated at only $15 585 (about K12.5 million). This means that...

Country Financing Roadmap aims to increase private investments Nation first in Africa to launch Country Financing Roadmap To benefit $431.6bn financing gap to meet SDGs Once again, Nigeria was left in the lurch by the World Economic Forum (WEF) to pick its West African neighbour Ghana, as the launch area of the first Country Financing Roadmap (CFR) for the Sustainable Development Goals (SDGs) in Africa. Ghana is the first country in which the CFR was released. It is piloting the initiative which will serve as a blueprint for other countries. The effort is funded and supported by the European Commission (EC) and the Danish International Development Agency (DIDA). The Country Financing Roadmap is a new country-led approach developed with the WEF to improve long-term competitiveness and bring the Sustainable Development Goals (SDGs) to life. The CFR presents a set of country-led plans to encourage greater financing at scale, especially private-sector participation, to meet the SDGs by 2030. The CFR has focused on financing sustainable infrastructure, a key indicator and driver of economic growth and development, which often hampers the ability of a country to attract sizeable investment if left behind, according to the World Bank. The CFR also focuses on the Micro, Small and Medium Enterprise (MSME) sector as it represents about 85 per cent of business within the private sector and contributes to 70 per cent of GDP, according to the report. According to WEF, the Country Financing Roadmap aims to increase private investments to help close the $431.6...

Africa is regarded as the new business frontier of global trade and investment. This despite numerous challenges such as lack of proper infrastructure and access to capital. In it’s most recent report for 2020, Deloitte and Touche outlines countries with most ideal environment for investment. Herein is a snapshot of most appealing countries: Mauritius The modest Indian Ocean island, which is best known for its exquisite white beaches and lush lifestyle, is fast becoming one of the hottest investment destinations and foremost business hubs on the African continent. Being likened to one of the leading real estate and business hubs in Asia is no small achievement. The fact that Mauritius is on a mission to make itself more attractive as an investment environment is clear from its progressive and highly favourable tax regime. Mauritian tax planning advantages include no capital gains tax; no inheritance, wealth or gift tax; a standard 15per cent individual tax rate; and no exchange control. Corporate tax is set at a rate of 15per cent or lower, while the country also boasts a strong tax treaty network. Cote D’ivoire Côte d’Ivoire has enjoyed a vibrant, robust, and stable economic growth since 2012, but experienced a slowdown in 2020 owing to the Covid-19 crisis. Prior to the global shock triggered by the pandemic, Côte D’ivoire had one of the most robust economies in Africa and in the world and had grown at an annual average rate of 8 per cent since 2012. The country remains Francophone West...

Lusaka MALAWI will have access to immense opportunities in the post-COVID-19 environment despite the accompanying challenges the period will pose, says Stephen Karingi, Director of the Regional Integration and Trade Division of the Economic Commission for Africa (ECA). Mr Karingi was speaking on Friday at the end of a series of workshops to review and validate Malawi’s African Continental Free Trade Area (AfCFTA) implementation strategy. “In trying to address the challenges caused by the pandemic, there are significant trade and business opportunities. These opportunities are available to Malawi too,” he said in a statement released after the workshop. The workshop followed two similar exercises in Blantyre and Lilongwe earlier in the week which gave stakeholders in the country an avenue to dialogue and secure ownership of the strategy. Mr Karingi also told Malawians worried that their country would become a dumping ground for goods from other countries, that the agreement had provisions that protect the Malawian market from unfair trade practices, including anti-dumping, countervailing and safeguard measures. “Should Malawi face critical balance of payments difficulties and there is need to safeguard its external financial position, the agreement allows the country to adopt appropriate restrictive measures to protect its position,” he said. For its part, the European Union (EU), a partner of the ECA in the process, says Malawi should take advantage of the exemption clauses in the AfCFTA agreement by promoting industrialization and value added sectors. “The key will be to attract, protect and nurture foreign direct investment and industrialization...

This year has welcomed AfCFTA, the pan-African free trade agreement. As of 1st January 2021, AfCFTA has brought in new business standards for 41 countries and 1.2 billion people to increase economic growth across the continent. Alongside that has been an acceleration of digital transformation in the region, heralding a new era of technological advancement. AfCFTA introduces updated trading rules that lower import-export taxes, make commerce more affordable, and increase transaction volume. It means banks in the continent will be primed for pan-African service, a priority that will adjust the importance of ease of payment. Since we began operating in South Africa in 2006, there’s been steady progress toward digital adoption and seen remarkable changes over the past decade. We’ve also been instrumental in implementing change. For example, we were behind the first contactless payment ever made in Ghana. Yet, the explosive growth that has unfolded at lightning speed over the past two years has not been comparable to anything that has come before. There are examples everywhere you look. TymeBank South Africa acquired 3.2 million bank customers in 17 months of operation, making it the world’s fastest-growing independent digital bank. Over 50% of its customer base are active each month, and its deposits have been rising at around 10% per month, with the fastest growth among women clients representing 50% of their customer base. TymeBank has close partnerships with retailers for cash in and out and tends to go where their customers shop for essential items. This has been...