As ratification of the new U.S.-Mexico-Canada trade agreement (USMCA) moves forward slowly, a landmark free trade agreement has been signed several thousand miles away on the continent of Africa. While 52 African nations signed the African Continental Free Trade Area (AfCFTA), to date 24 have ratified the agreement (22 were needed to actually bring the agreement into force). The AfCFTA breaks new ground and ushers the continent towards being a more seamless and frictionless trade region. Though it could be argued that these African nations are largely underdeveloped, the collective GDP of all the 55 states in Africa accounts for a staggering $3 trillion, making it the fifth-largest trade front in the world. This is excellent news for the U.S., as the African nations coalescing into a single trade region will greatly help in expediting unified trade deals, rather than developing tailor-made trade agreements with individual countries across the continent. The timing of this development also suits U.S. interests, coming at a time when there is an escalation of trade tariff exchanges between the U.S. and China. Over the last decade, Africa has become the hotspot for investment, with superpowers like Russia and China channeling billions of dollars to gain a strategic foothold on the continent. Beijing has been especially aggressive, investing heavily in Africa to widen its Belt and Road Initiative (BRI) that aims at reviving the ancient Silk Route and also extend much further to account for all major trading partners of China. The U.S. has accused China of using...

Lest we forget, it was on November 30, 1999 at Sheikh Amri Abeid Memorial Stadium in Arusha, Tanzania that three heads of state (of the Republic of Uganda, the Republic of Kenya and the United Republic of Tanzania) put pen to paper and signed the treaty that revived the EAC. Again, to jog our memory, the EAC had earlier been established from 1967 and it collapsed 10 years later in 1977. The current EAC 20-year journey has been remarkable, the inevitable challenges notwithstanding. The framers of the treaty that established the EAC envisaged a community that would be anchored on four pillars. This is aptly captured in Article 5 where the partner states undertook “to establish among themselves, a Customs Union, a Common Market, subsequently a Monetary Union and ultimately a Political Federation.” The partner states have signed and ratified three protocols in line with these pillars. Implementation of these protocols is at various stages with a commendable degree of success. The pillars are very crucial forerunners to the ultimate goal of political federation. Thus, in 2017, the EAC heads of state agreed on political confederation as a transitional model to full East African Political Federation. All the partner states have, accordingly, nominated experts and set up a team that is currently working on the confederation constitution. Uganda’s former Chief Justice Benjamin Odoki and Makerere University’s Prof Murindwa Rutanga are part of this team. When asked to highlight the salient achievements of the 20-year EAC integration, one is spoilt for choice....

The African Continental Free Trade Area’s (AfCFTA) entering into force is a laudable development, building on existing initiatives for regional integration and laying the groundwork for more. The immense support from countries and leaders across the continent is merited. At the same time, however, AfCFTA’s strong political backing and the excitement surrounding its rapid progress has led to some claims of its potential benefits going unchallenged, particularly surrounding intra-African trade gains. Most commentators appear reluctant to interrogate publicly a popular pan-African project, even when this analysis might be constructive. This is a problem because a misleading impression has been created that signatory countries should soon enjoy the benefits of improved trade levels. Specifically, following repeated citations by international organisations and the media, the estimate that AfCFTA will lead to a 52.3% increase in intra-African trade by 2022 is now widely taken as a given. The African Union quotes this figure as if it were fact, while the UN Economic Commission for Africa (UNECA) and the United Nations Conference on Trade and Development (UNCTAD) suggest such an eventuality is “likely”. The statistic has been repeated frequently by dozens of news outlets, from Al Jazeera to Fortune. Though seldom cited, this number comes from a paper presented in 2012 by two UNECA specialists to the 7th African Economic Conference. And, importantly, the report’s authors make clear that their projection of a 52.3% increase by 2022 – compared to a 2010 baseline – is based on several assumptions: a fully-liberalised and continent-wide trade area by 2017; harmonisation of external...

The World Trade Organisation (WTO) has partnered with the Common Market for Eastern and Southern Africa (Comesa) to harmonise standards with a view to increasing market access of agricultural produce in the region. Kenya is second after Uganda to start implementing the project whose inception meeting and high-level stakeholder dialogue will take place this week in Nairobi. The events bring together experts from the private sector, relevant public sector departments and institutions of government to build consensus on the most critical investments. Trade PS Chris Kiptoo said the variation of standards in the Comesa countries and the continent undermines the region’s capacity to trade with itself. “The diversity of strengths and weaknesses on the continent demands greater collaboration between countries that belong to the same Free Trade Area,” he said. Dr Kiptoo said compliance with standard measures opens export opportunities for producers and exporters, at the intra-regional and international levels. For Kenya, he said, the subject of sanitary and phytosanitary standards is a crucial element of trade policy. The project, which entails mainstreaming of SPS priorities into national policies, is supported by the Standards and Trade Development Facility (STDF), an agency of the WTO. The project covers Uganda, Rwanda, Ethiopia and Malawi. It is being implemented under the Prioritising SPS Investments for Market Access framework, an initiative of the STDF. Intra-Comesa trade remains lower than other regions, at around 11 percent of total Comesa exports with the majority of traded products being of low added value. Comesa director of Agriculture...

Rwanda Development Board (RDB) has revealed plans to revise the current investment code in order to meet set investment targets from both local and foreign companies registering in Rwanda. This year’s target for RDB is to reach at least $2.1 billion compared to $2 billion that was reached in 2018, with 50% of the investments being local. The current investment code is dated back in 2015, when it was first revised from the initial one enacted in 2005, but RDB officials said a lot has changed over the last four years, which calls for a review. “We still have to discuss with stake holders but some of the focus areas will include exports, infrastructure investment and cost elements like logistics and transportation” said Guy Baron, RDB Chief Investment Officer. Baron was speaking to journalists at the 2019 Kigali Investment Forum held in Kigali on Tuesday, which brought together investors and government officials to discuss business and sustainable development opportunities in Kigali. At the forum local investors said that they still face difficulties with high costs of import and export logistics, and high interest bank rates which have resulted to high cost of services especially in construction sector. Baron said that with stakeholders, like Rwanda Revenue Authority and ministries of trade and commerce, reforms in the code will include issues, for example, address the long standing issues of high cost of imported goods as a result of cost of logistics during exports of goods. RDB Chief Investment officer also said that...

The poor trade and economic ties between Kenya and Ethiopia have been blamed on internal politics and poor development record in the neighbouring areas. This emerged on Wednesday at a panel discussion at the University of Nairobi, during the commemoration of 55 years of Kenya-Ethiopia relations. UoN lecturer at the Institute for Development Studies Prof Karuti Kanyinga said the poor development in southern Ethiopia and in northern Kenya had done little to promote cross border trade. “The lessons we draw from this is that politics matters in development and we must be sensitive to it. What is needed to enhance these ties I inclusive politics and political commitment to development policies,” Kanyinga said. But the two countries are banking on the Lamu Port-South Sudan-Ethiopia-Transport Corridor project, and the current reformative administration of Prime Minister Abiy Ahmed to promote trade and economic relations. “If you look at Kenya’s development in the last 50 years, major investments are a few kilometres from the railway line. So Lapsset can play a major role if it is connected to other parts of the country for the purposes of promoting trade and development in those areas. It should not be that Lapsset is an end to itself,” Kanyingi said. He also noted that governors should be sensitised on the opportunities Lapsset offers to the counties. Lapsset is Eastern Africa’s largest and ambitious infrastructure project that brings together Kenya, Ethiopia and South Sudan, and seeks to connect Nairobi to Addis Ababa. Lapsset director general and CEO Silvester...

Tanzania has suspended the construction of the $10-billion Bagamoyo port project. The project, which broke ground in 2015, would have been the largest gateway in East Africa and was a key component in China’s $900-billion Belt and Road Initiative, an ambitious transnational infrastructure building program. President Magufuli assails Chinese “tough conditions that can only be accepted by mad people” Tanzanian President John Magufuli accused the Chinese project backers of presenting “exploitative and awkward” terms in exchange for financing. Chinese financiers set “tough conditions that can only be accepted by mad people,” Magufuli told local media. “They told us once they build the port, there should be no other port to be built all the way from Tanga to Mtwara south,” Magufuli told a delegation of business people at State House in Dar es Salaam on June 14. “They want us to give them a guarantee of 33 years and a lease of 99 years, and we should not question whoever comes to invest there once the port is operational. They want to take the land as their own but we have to compensate them for drilling construction of that port,” he said. Magufuli also argued the construction of Bagamoyo port, whose foundation stone was laid by his predecessor Jakaya Kikwete, would undermine the ongoing $522-million expansion of Dar es Salaam port that would enable it triple its current capacity when complete by the end of 2019. In addition, Magufuli said the $50-million given out to compensate those displaced by the...

Completion of Phase 2B of the standard gauge railway — from Naivasha to Kisumu — is still on course despite the government rehabilitating the metre gauge line, Transport Cabinet Secretary James Macharia has said. Speaking to the Nation Tuesday on the sidelines of the Forum for China Africa Cooperation (Focac) in Beijing, Mr Macharia said that since the SGR is a regional project, Kenya is aligning it with what its neighbour Uganda is doing. He said that the time for completing the whole project might have changed but plans to extend it to Malaba have not, adding that China was in the final stages of realising funds. “Kenya is the entry gate of the SGR, which runs from Lamu-Mombasa-Naivasha-Kisumu-Lake Victoria all the way to the Atlantic Ocean in West Africa. However, Kenya cannot develop it on its own because it will not be viable due to the fact that 30 percent of cargo from Mombasa is on transit, of which 85 percent goes to Uganda. There is need to harmonise the SGR with what countries in the region are doing,” said Mr Macharia. “On the future of the SGR and its status, Kenyans need to know that Phase 2A is 98 percent complete and will be operationalised in September. Eventually, the SGR will reach Kisumu and finally Malaba, only timing has changed,” he said. He downplayed fears that upgrading of the old railway could see an end to the SGR, arguing that the venture is an intervention as the country awaits funding...

Lord Popat addressing business and government officials Lord Popat, the British premier’s trade envoy to Uganda, is in the country to strengthen trade ties between the two countries. Yesterday, he addressed the local business community and government officials during the Agri-connect conference at Serena Hotel. Lord Popat said government should help exporters add value to their exports if they are to get reasonable profits from the bilateral trade. “Value addition means I eat a fresh fruit here in Kampala and also eat it in the UK, I don’t need the whole of it, but I need it properly packaged,” he said. He also noted with disappointment that currently, Uganda’s exports to the UK account for just £2m (about Shs 9.3bn) annually hence the aim of his visit is to see that the figures go up. Uganda’s major exports to the European Union include coffee, tea, fish, flowers and cocoa powder. For this to happen, he said government needs to take the lead in giving direction to the exporters. “Regional markets are very convenient, and it is becoming easier to trade across borders thanks to initiatives like Trade Mark East Africa for which the UK funds 70 per cent; by bringing UK companies to Uganda...” The Agri-connect conference is hosted by the UK’s Department for International Trade in collaboration with Uganda Export Promotion Board and seeks to expand the UK’s investment in developing new supply chains in the agricultural sector in Uganda. “We want to sustain an increase in exports to the...

TradeMark Africa (TMA) and Tanzania Private Sector Foundation (TPSF) have signed a grant agreement to support Public Private Dialogue (PPD) in Tanzania. The three years grant amounting $1,19million (equivalent to TZS 2.7 billion) is expected to end in June 2022. The grant is expected to improve sectoral dialogues amongst the private sector, and between public and private sectors through with a specific focus on trade, logistics and transports, taxes, customs, standards, and Sanitary and Phytosanitary (SPS) with the aim of improving the business environment and attract investments in the country. In his remarks Mr. John Ulanga TMA’s Country Director said “We are glad today to sign this agreement which is going to help the private sector to dialogue with the government in a more constructive way backed up with data. TradeMark Africa strongly believes in the importance of collaboration between the Government and Private Sector, and that can only be achieved through effective dialogues. When the two work together collaboratively, a lot more can be achieved, and the cost of doing business will reduce hence making our country more competitive” Mr. Ulanga added:“Tanzania has the biggest advantage in the East and Central Africa Region due to its geographical location.  Bordered by six countries, Tanzania deserves to be the Trade and Logistics Hub of the region.  Therefore, this grant will help in the conversations amongst private sector, and between public and public sector on how to ensure Tanzania can take advantage of its position economically”” In his remarks the TPSF’s Executive...