Asmara. Economy in the Eastern Africa, which is one of the fastest growing regions, is projected to grow by 6.4 per cent this year, despite facing some major risks. The 14-member region, which has been growing by 6.6 per cent since 2014, faces domestic and global economic risks, but the United Nations Economic Commission for Africa (UNECA) says the countries have recorded improvements in agricultural production and sustained infrastructure investment which sustained growth and will continue to do so. The resolution of the political conflict between Eritrea and Ethiopia is also expected to provide a boost to growth in the Horn of Africa. Experts at the 23rd meeting of the intergovernmental committee of senior officials say the countries should now focus on regional cooperation to accelerate their economies. One of the challenges reported is weak trade between the countries with the East African Community (EAC) mentioned to have half of its potential. “Cross border problems affecting the region need a cross-border answer. Enhanced regional cooperation is needed to make regional growth more sustainable and inclusive,” said Mr Andrew Mold, the acting director for the ECA in East Africa who presented an analysis of the macroeconomic situation. Ethiopia, Rwanda and Tanzania are top three countries with the fastest growth rate of the Gross Domestic Product (GDP). The region is also said to have a challenge of debts with Kenya and Ethiopia mentioned staying atop the list. Besides, climate change was identified as another major challenge as the eastern Africa still suffers...

The World Customs Organization of East and Southern Africa on Wednesday dispelled fears that the coming into effect of the African Continental Free Trade Area (AfCFTA) agreement was likely to affect revenue collection among countries in the African region. Larry Liza, director of the customs organization in charge of building capacity said countries will need to put in place implementation measures and legal frameworks aimed at protecting revenue collection. He said there was need for countries to look at a broader picture on what benefits were expected to be accrued from the agreement. "The market may seem to affect revenue collection, but the agreement is expected to be more beneficial to society through increased trade facilitation and business opportunities," he is quoted as saying by the state-run news agency, the Zambian News and Information Service (ZANIS). According to him there was no need for stakeholders to be agitated with the impending implementation of the agreement, adding that it will allow the business community to have access to foreign markets. Source: Xinhau

With the African Continental Free Trade Area (AfCFTA) set to officially start operating from July next year, there is need for concerted efforts to enlarge the group of State parties under the agreement in excess of the current 28 countries that have so far deposited instruments of ratification. Enlarging the group will see the continent creating a much bigger market that will ensure intra-African trade delivers, in particular by contributing to the continent's industrialisation and structural transformation processes thereby creating more job opportunities and reducing poverty along the way. This was said Tuesday by Stephen Karingi, Director of the ECA's Regional Integration and Trade Division, at the ongoing 23rd Meeting of the Intergovernmental Committee of Senior Officials and Experts (ICSOE) for Eastern Africa in Asmara, Eritrea. "To operationalize the AfCFTA, we need to finalize the remaining critical components like goods schedules and rules of origin. We also need to enlarge the group of State parties and to create institutions, establish operative mechanisms, and introduce obligations into law and regulation to effectively implement the AfCFTA," said Mr. Karingi. He said Africa also needs to take complementary measures to maximize benefits, in particular following AfCFTA national strategies; conclude Phase II negotiations, especially competition policy, intellectual property rights, and investment, and use the AfCFTA as a vehicle for achieving the African single market. Mr. Karingi said following the implementation of the AfCFTA, based on the sole reduction of tariffs on goods, Africa's GDP would increase under all scenarios. In preparation for July 2020,...

The east Africa region, the fastest growing sub region on African continent, needs to implement the African Continental Free Trade Area (AfCFTA) agreement to create jobs for 8.5 million youth in the sub region entering the job markets every year. “The struggles that we see today in terms of achieving growth and creating jobs for our youth could be something of the past if we actually work together to exploits the benefits of the free trade area agreement,” said Vera Songwe, UNECA Executive Director of UNECA. She made the statement this morning in Asmara, Eritrea addressing the 23rd meeting of the Intergovernmental Committee of Senior Officials and Experts (ICSOE). “We know because of the analysis that we do at the UNECA that the African Continental Free Trade agreement stands to deliver about $1.8 billion worth of additional revenue to the continent ad can create about 2 million jobs a year,” she said. The experts are gathered from the 14 countries found in the east Africa sub region namely, Eritrea, Ethiopia, Democratic Republic of Congo (DRC), Kenya, Uganda, South Sudan, Madagascar, Tanzania, Burundi, Comoros, Djibouti, Rwanda, Seychelles and Somalia. The fastest growing The United Nations Economic Commission for Africa (UNECA) predicts that East Africa sub region will grow at 6.5% by 2020. “This is the fastest sub-region on the continent [Africa]. Today this east Africa region is growing at 6.4%. We expect it to grow at 6.5% by 2020. The overall continent is growing at only 3.4%,” she said, in her...

The Inter African Coffee Organisation (IACO) has joined forces with the Centre for Agriculture and Biosciences International (CABI) and the International Coffee Organization (ICO) to launch the Ksh.95 billion ($950 million) ‘Africa Coffee Facility’ (ACF) to boost Africa’s coffee industry and achieve a 40 percent increase in high-quality exports worth $5 billion a year. The ACF is projected to transform Africa’s coffee production – currently 10 percent of the global coffee market – into a vibrant and resilient industry again. Coffee is a primary source of income for more than 12 million households in Africa and contributes a significant proportion of tax income in a number of these countries. The largest annual export value of African countries is recorded by Ethiopia at $762.8m annually, followed by Uganda ($468.4m), Kenya ($229.5m) and Tanzania ($129.2m). Speaking at the event, Agriculture Cabinet Secretary Mwangi Kiunjuri said, “We need to build the capacity of our smallholder producers as well as revamp our producer organizations, empower women and the youth through entrepreneurship development. This includes a value chain transformation from a subsistence to an entrepreneurial orientation among our farmers.” This year the Government of Kenya allocated 3 billion Kenya Shillings (equivalent to USD 30 million) towards supporting coffee producers. Dr. Fred Kawuma, Secretary General of the IACO, said, “Africa produces some of the highest-quality and much-loved coffee in the world but its contribution to the global coffee trade has declined significantly since the 1970s when nearly a third of all coffee was produced on the continent.”...

Tourism may be international or within the traveler's country. The World Tourism Organization defines tourism more generally, in terms which go "beyond the common perception of tourism as being limited to holiday activity only", as people "traveling to and staying in places outside their usual environment for not more than one consecutive year for leisure and not less than 24 hours, business and other purposes". Tourism can be domestic or international, and international tourism has both incoming and outgoing implications on a country's balance of payments. Tourism suffered as a result of a strong economic slowdown of the late-2000s recession, between the second half of 2008 and the end of 2009, and the outbreak of the H1N1 influenza virus, but slowly recovered. International tourism receipts (the travel item in the balance of payments) grew to US$1.03 trillion (€740 billion) in 2005, corresponding to an increase in real terms of 3.8 pc from 2010. International tourist arrivals surpassed the milestone of 1 billion tourists globally for the first time in 2012, emerging markets such as China, Russia, and Brazil had significantly increased their spending over the previous decade. The ITB Berlin is the world's leading tourism trade fair. Global tourism accounts for ca. 8 pc of global greenhouse gas emissions. The word tourist was used in 1772 and tourism in 1811.[12] It is formed from the word tour, which is derived from Old English turian, from Old French torner, from Latin tornare; 'to turn on a lathe,' which is itself from...

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Burundi has joined a group of nine African countries at a high risk of debt distress while Kenya’s risk of default has increased to moderate from low. This has seen the International Monetary Fund raise a red flag over the rate at which East African countries are accumulating debt. The region’s economies have fallen into a financial fix as they attempt to fund persistent budget deficits and implement mega infrastructure projects against a backdrop of declining revenue collection. As a result, the economies have resorted to massive borrowing, both from the domestic and international markets to quench their loan appetite, with fears that the increasing uptake of commercial loans could push most of them into debt distress. “An over-reliance on commercial public debt exposes sovereign balance sheets to greater rollover and exchange rate risks. Also, an increase in debt from domestic creditors could crowd out financing for private sector projects,” said the IMF. So far Kenya, Uganda and Tanzania are among the top 50 countries in the world that are highly indebted to China, according to US-based research firm Brookings Institution. According to Brookings, countries are now shifting away from official multilateral creditors who come with stringent conditions to non-concessional, (commercial) debt with relatively higher interest rates and lower maturities. But this trend is raising concerns around debt sustainability given the possibility of higher refinancing risks and foreign exchange risks. The IMF, in its regional economic outlook report for sub-Saharan Africa released last week, says that surging public debt-to-GDP ratios...

As the world’s economic giant – the United States – continues to wage economic war against China, Mexico, Turkey and, more recently, India in establishing tariff barriers against their products, African countries have opted to spurn protectionism and embrace intraregional trade. A significant and historic step was taken on 30 May, as the African Continental Free Trade Area (AfCFTA) came into effect. What does this all mean, and is it cause for celebration? A market potential for goods and services of 1.2 billion people, an aggregate gross domestic product (GDP) of $2.5trn, the reduction of tariffs and the free movement of labour is not to be sniffed at. I know this, as I come from a country of 2 million people and a GDP of circa $17.5bn. Investors want access to a large consumer base and the benefits of scale cannot be underestimated for attracting foreign direct investment. Yes, the agreement is indeed a cause for cautious celebration. The speed with which it has been brought into effect from June 2015, when the negotiations first commenced to establish the continental free trade area, to May 2019, when 51 of 54 African countries signed up, is nothing short of a miracle. We need to applaud the tenacity of our leaders in getting here.  As a continent, intraregional trade is an economic imperative. Currently only 12% of trade is within Africa, while 75% of our exports to the rest of the world are still mainly minerals (crude oil and copper), according to United Nations...

Sign up for Next China, a weekly email on where the nation stands now and where it’s going next. By many measures, China’s Belt and Road Initiative has been a monumental success. Since 2013, when China launched the effort to expand trade links, more than 130 countries have signed deals or expressed interest. The World Bank estimates some $575 billion worth of energy plants, railways, roads, ports and other projects have been built or are in the works. But President Xi Jinping’s signature effort has also come in for criticism, including accusations that China is luring poor countries into debt traps for its own political and strategic gain. The mixed reviews abroad and worries at home about the cost have led China into something of a reboot as it tries to increase transparency, improve project quality and reduce financial risks. 1. Where are the problems? Several countries have run into trouble with Belt and Road projects or had a rethink, often after a popular backlash, change of government or both. Complaints include corruption, padded contracts, heavy debt loads, environmental damage and a reliance on imported Chinese labor over local hires. Some examples: • Sri Lanka borrowed heavily to build a new port, couldn’t repay the loans, and then gave a state-owned Chinese company a 99-year lease in exchange for debt relief. The port has little business now but provides China a strategic berth along key shipping lanes. • China was set to lend Pakistan $8 billion to upgrade a railroad...