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On July 6-7, 2019 I was in Niamey both for the pre-Summit Business Forum and for the African Union’s Extra-Ordinary Summit to celebrate the first Anniversary of the Signing of the African Continental Free Trade Area (AfCFTA) and launch of its operational phase. What is the outlook for the World’s largest single market? As I write, the AfCFTA process is well on track to be ready for trading in July 2020 as planned and Accra, Ghana has been chosen as a location of the AfCFTA Secretariat. In the 2019 edition of our UNCTAD Economic Development in Africa Report, titled Made in Africa: Rules of Origin for enhanced intra-African trade, we argue that it is Rules of Origin that will make or break the AfCFTA. Essentially, rules of origin are a passport for goods. Rules of Origin are at the cornerstone of what it means for goods to be labelled “Made in Africa”. They are a set of technical requirements that define goods’ eligibility for preferential tariffs on imports in a Free Trade Area. Rules of Origin Rules of origin are situated at the nexus of trade and industrial policy. Make them soft and a Free Trade Zone runs the risk of not spurring the creation of local value. Make them too strong and countries risk being considered too protectionist and firms may find them too difficult to comply with. The complexity and incompatibility of different sets of rules of origin across regional economic communities in Africa is one of the many...

Somaliland is seeking investors to boost trade and ultimately the local economy. The semi-desert territory on the Coast of the Gulf of Aden, declared its independence from Somalia in 1991. It is a main livestock exporter. The World Bank pegs its Gross Domestic Product at $1.9 billion. As at 2017, the population of Somaliland stands at 3.5 million. The country has been working to secure recognition as a sovereign nation by the international community. In recent times, it has opened it doors for investors. Internationally acclaimed logistics company, DP world has pumped over $400 million to support the governments plans for diversification. We hear from my colleague Ronald Kato who spent a few days in Hergeisa and the port of Berbera. Kato speaks to Somaliland’s Finance Minister and Chief Executive of DP World about the company’s ongoing port expansion program. But how does this impact locals? Source: africa news

Free Trade Areas (FTAs) need institutions to oversee, promote and monitor the implementation of obligations by the State Parties. The African Continental Free Trade Agreement (AfCFTA) establishes four key institutions, in addition to various technical bodies that are provided for in the different Protocols. These institutions will be responsible for ensuring that this ambitious undertaking succeeds. The functions of the new AfCFTA institutions include political oversight and policy direction, as well as technical guidance and assistance. This will entail a new challenge for the structures of the African Union (AU); when it moves into the world of international trade regulation and ensuring compliance with multilateral trade rules. (Only five of the 55 AU members do not belong to the World Trade Organization – WTO). The Assembly of the AU is the highest decision-making organ of the AfCFTA and shall provide oversight and strategic guidance on the AfCFTA, including the Action Plan for Boosting Intra-African Trade (BIAT). It also has the exclusive authority to adopt interpretations of this Agreement on the recommendation of the Council of Ministers. The decision to adopt an interpretation shall be taken by consensus.[1] The Council of Ministers (those Ministers of the State Parties responsible for trade) must ensure the effective implementation and enforcement of the Agreement and must take all measures necessary for promoting the AfCFTA objectives. The Council of Ministers shall report to the Assembly through the Executive Council of the AU.[2] The Committee of Senior Trade Officials (consisting of Permanent or Principal Secretaries designated by each State Party) must implement...

Nippon Export and Investment Insurance (Nexi), Japan’s export credit agency, has inked partnership agreements with three international financial institutions to accelerate trade and investment in Africa by Japanese companies. The deals were struck with the Islamic Development Bank (IsDB), Islamic Corporation for the Insurance of Investments and Export Credit (ICIEC) and African Trade Insurance Agency (ATI). These partnerships will lead to the establishment of a “co-operative framework to promote setting up projects” on the continent, Nexi says. Nexi and ATI are also collaborating on the launch of a Japan desk, to be housed by ATI in Nairobi. The desk will provide tailored risk mitigation support to Japanese companies and investors doing business in Africa. A spokesperson for ATI tells GTR that the desk will be headed up by ATI underwriter Annabelle Buzingo, a recent recruit who joined at the start of the year from Export Development Canada. She will be supported in the role by an ATI credit analyst. In a release, Nexi says that it will conduct a trade and investment insurance training programme for staff from each of the three institutions, who will then work as Japan desk officers to create a supportive environment for Japanese companies. “We are very pleased to announce that the Japan desk will be set up in ATI to support African projects so that Japanese companies can obtain easy access to the reliable risk mitigation solution provided by ATI,” says Nexi chairman and CEO Atsuo Kuroda. The African market provides great potential for Japanese companies...

One year ago, at the opening ceremony of the 2018 Beijing Summit of the Forum on China-Africa Cooperation, Chinese President Xi Jinping said Africa's development has great potential and this great continent is full of hope. In the first decade of the 21st century, six of the world's 10 fastest-growing economies were in sub-Saharan Africa. After decades of efforts to catch up, Africa now has a real chance to achieve stable development, accelerate its integration process and raise its international status. STABILIZED POLITICS Between 1896 and 1901, British colonists built a meter gauge railway in Kenya to link the port of Mombasa and Uganda to tighten control of the "British East Africa," a proof of the continent's history of colonial oppression. It was only after the 1960s and 1970s that most African countries emerged from many decades of colonial rule after a long and arduous struggle. Afterwards, however, the dark cloud of colonialism still shadowed the continent with many of these countries plunged into turbulence due to historical issues such as boundary demarcation, tribal and religious conflicts left by Western colonialists. Such factors as the imitation of the western political system, the lack of governance capacity by various African governments, and the intervention and manipulation of foreign forces also fueled the turmoil. Drawing on the bitter history lessons, African countries realized that development could not be achieved without a stable political environment. Since the beginning of the 21st century, African countries have gradually embarked on the road of unity and...

Africa's tripartite free trade area (TFTA) will be operational in early 2020, an official said on Tuesday. Francis Mangeni, director of trade and customs with the Common Market for Eastern and Southern Africa (COMESA) told Xinhua in Nairobi that so far five countries have ratified the TFTA that brings together COMESA, East African Community (EAC) and the Southern African Development Community (SADC) trading blocs. "We expect another 11 countries to ratify the agreement before the end of the year so that the TFTA could be operationalized," Mangeni said on the sidelines of the sixth COMESA annual research forum. The five-day event will bring together policymakers, academia, think tanks, and the private sector from the 21 member states to discuss emerging topical issues in regional integration. Mangeni said that the TFTA will also be a building bloc for the African Continental Free Trade Area. The COMESA official added that East African Customs Union and Southern African Customs Union have already completed negotiations on tariff reductions. He noted that countries that are not members of either EAC or SADC will use the current trade liberalization trade regime of COMESA. Mangeni revealed that the ultimate aim of the TFTA is to reduce gradually the tariffs for all goods traded in the bloc to zero percent. "In the first year of operations countries (are) to fully liberalize trade on 66 percent of all goods and achieve 100 percent in five years," he said. Source: Xinhau

While the African Union (AU) has developed ambitious plans for continental free trade it is becoming clear that free movement of people lags behind. This blog identifies six obstacles that impede progress on free movement for people in Africa and considers the prospects for future development. The AU Summit held in Niger on July 7 2019 witnessed the rapid ratification of the African Continental Free Trade Area (AfCFTA). One of the most rapidly ratified and fastest treaties to enter into effect (it took little more than a year from inception), AfCFTA has now been ratified by 27 African countries, including Egypt, Ethiopia, Kenya, South Africa and Ghana, although Nigeria, Algeria, Tanzania and some others have not yet ratified the agreement. Remarkably, at that Summit the Protocol for a Free Movement of Persons was once again missing from the agenda. Intertwined as they must be if they are to operate effectively, the free trade treaty should have been ratified and implemented hand in hand with arrangements for the free movement of people under the Protocol on Free Movement for Africa, adopted by the AU in January 2018. Unfortunately, only four countries (Madagascar, Niger, Rwanda and Sao Tome & Principe) have signed up to the latter arrangement; none of the bigger countries, such as Algeria, Egypt, Nigeria, South Africa and Ethiopia, have ratified it. According to the African Development Bank’s Africa Visa Openness Report 2018, African citizens need a visa to travel to 51% of other African countries, 24% demand a visa on arrival and only 25% operate...

He urged Japan to learn from the example of the Tony Elumelu Foundation, which champions empowering African entrepreneurs, as the most sustainable means of accelerating the development of Africa. “At TICAD 2016 in Kenya, Japan pledged $30b (sh110.5 trillion) for Africa. This year you have generously increased this to $50b (sh184.2 trillion),” Elumelu said. “If we invested just 5% in Africa’s new generation of entrepreneurs, following my Foundation’s robust, proven model of getting capital directly to those best placed to catalyze growth and create real impact, we could touch 500,000 lives, across the 54 African countries, broadening markets, facilitating job creation, improving income per capita, and laying the key foundation for political and economic stability”, he added. Elumelu’s statement captured his vision of a relationship between Japan and Africa, which prioritises economic and shared prosperity. He outlined the three key pillars of a bold and transformative structure: investment in infrastructure, partnership with the African private sector, and investment in Africa’s youth. He urged Japan to learn from the example of the Tony Elumelu Foundation, which champions empowering African entrepreneurs, as the most sustainable means of accelerating the development of Africa. The Tony Elumelu Foundation, in just five years has assisted over 7,500 African entrepreneurs across every Africa, with seed capital, capacity building, mentorship and networking opportunities through its $100 million Entrepreneurship Programme. Elumelu’s advice carried the weight of his track record of business success, founding Africa’s global bank, United Bank for Africa (UBA), which has grown its presence to 20...

Globalisation, which has driven economic growth but has also been criticised for leading to unacceptable levels of inequality, will be high on the agenda at the 28th World Economic Forum (WEF) on Africa tomorrow. The WEF said in a statement yesterday that it would also discuss government policies and responsible business practices to provide a foundation for a more inclusive society. It said tackling corruption, universal healthcare provision and the protection of workers in the gig economy had a role to play in building more equitable societies. This year’s WEF on Africa will convene 1100 leaders from 100 countries, representing business, government, academia, civil society, media and the arts under the theme “Shaping inclusive growth and shared futures in the 4th Industrial Revolution (4IR)”. Elsie Kanza, the head of Africa at the forum, said top leaders would come together to create the conditions for socio-economic investment to take place. “Africa, like all regions of the world, faces great challenges. "For the region to prosper in an increasingly globalised world, it needs transparent governance, competitive economies and peaceful societies.” Heads of state or governments participating in the meeting include President Cyril Ramaphosa; Mok- gweetsi Masisi, President of Bo- tswana; Azali Assoumani, President of the Union of the Comoros; Ma- ndulo Ambrose Dlamini, Prime Minister of eSwatini; Sahle-Work Zewde, President of Ethiopia; Peter Mutharika, President of Malawi; Hage Geingob, President of Namibia; Yemi Osi- nbajo, Vice-President of Nigeria; Yo- weri Museveni, President of Uganda; Danny Faure, President of Seychelles; and Emmerson Mnangagwa,...