The tectonic plates of the global political economy are shifting, and with an accelerating pace: “Trade wars”; “Brexit”; “fake news” and election manipulation; “populism”; the appointment of a “geopolitical commission” in Brussels; unprecedented protests in Hong Kong; South China sea military confrontations; an increasingly assertive Chinese Communist Party—the list goes on. Facing these dramatic changes, smaller, relatively fragile, states, particularly those in Africa, need to build new reference points to anchor their future development or risk being swallowed in the emerging crevasses. Rather than focus on current events Africans need to discern their underlying drivers and how they frame opportunities, as well as responses. The modern world economy is now characterized by a rapidly shifting technological frontier within which several previously distinct realms are now converging. Sub-Saharan Africa could benefit from the increasingly interconnected global economy. At the same time, the United States’ tough response to China’s growing economic heft, as well as increased worldwide backlash to globalization, is incentivizing some economies to look inward. Trade policy and strategy is back in focus with a vengeance, and increasingly contested. How might an Africa caught in the middle of these opposing forces navigate this new global trade environment while maintaining its growth momentum of the last two decades? Trade integration is creating opportunities for growth Under the “Fourth Industrial Revolution” the world of work is transforming, placing ever-higher premiums on skills, curtailing the significance of geographic distance as a main shaper of production patterns, and promoting structural transformation. This new, more...

Africa, despite being a rich continent endowed with vast natural resources, is still lagging behind other regions of the world when it comes to industrialisation. Member countries still export commodities in their raw form and get next to nothing for these commodities and at the same time spend billions in scarce foreign currency to import finished goods for consumption by their people. African countries are failing to trade among themselves due to ineffective manufacturing industry, even in the wake of the coming on board of the African Continental Free Trade Area (AfCFTA) earlier this year. It is against this background that senior journalists, business writers, and experts from across the continent, as well as experts and representatives from partner organisations this week, met in the Ethiopian capital Addis Ababa, to interrogate how the continent can move forward and industrialise. Organised by the Industry Division in the Department of Trade and Industry of the African Union Commission, the meeting sought to build media awareness on the Accelerated Industrial Development of Africa (AIDA)’s framework and related strategies. As we have previously mentioned, Africa continues to part way with its raw minerals and buying them back as finished products for a high fee from international markets. Exports from the continent remain dominated by unprocessed or minimally processed products, mainly from the agricultural and mineral sectors, resulting in very low-value returns. It should be noted that Africa’s Regional Economic Communities namely the Southern Africa Development Community (SADC), East African Community (EAC), the Economic Community...

NAIROBI, Sept. 27 (Xinhua) -- South Sudan is likely to seek an extension to become compliant with the requirements of the East African Community (EAC) customs union, an official said on Friday. Aggrey Tisa Sabuni, presidential advisor on economic affairs of South Sudan told Xinhua in Nairobi that the period of three-year that his country was granted to ready itself to assume its role and responsibilities is not sufficient. "The likely course of action is that we will require an additional period of not less than one year to implement the EAC customs union protocol due to challenges of legal frameworks and capacity issues," Sabuni said on the sidelines of the high-level conference on EAC trade integration. The three-day event brought together policymakers and academia from the six partner states to review the level of trade in the economic bloc. In 2016, South Sudan became a member of the six-country trading bloc but is yet to fully implement the customs union and common market protocol. Sabuni noted that for his country to implement the customs union it will require to undertake reforms of its immigration, customs, taxation and labor laws. The custom union requires member states to remove internal tariffs for goods produced within the region and maintain a common external tariff for goods imported into the economic bloc. Sabuni noted that South Sudan is likely to experience loss of revenue of import duty that is currently charged on goods from the EAC partner states once it fully operationalizes the...

A report of the recently concluded high-level conference on trade integration notes that there is a downward trend on the profile of the East African Community (EAC) as an attractive investment destination. The report calls for the EAC Partner States to market EAC jointly, further consolidate free trade by eliminating individual State exemption lists, liberalize and allow free movement of trade and services, eradicate non-tariff barriers (NTBs), fully harmonize the Common External Tariff (CET) and domestic taxes and make business immune from politics. To enhance competitiveness, the reports say EAC needs to reduce the cost of production, and stop relying on duty exemption arrangements like AGOA. Cost of production can be lowered by managing labour, energy, logistics and cost of inputs, like raw material. “Partner states should play complementary roles in ensuring that the region does not continue being the market of finished goods from other regions, but also a producer of goods for export,” it says. However, delegates at the conference noted that there has been remarkable progress made on the EAC regional integration pillars namely the Customs Union, the Common Market, the Monetary Union and the Political Federation. Among them, the Customs Union is regarded as most successful notably with the implementation of common legal instruments and trade facilitation programmes across the region including the Single Customs Territory, One Stop Border Posts, Authorized Economic Operator Programme and the Customs Business systems interconnectivity. The conference that was held in Nairobi, Kenya from September 25-27, 2019 was held to commemorate...

The African Heads of States and Governments pose during African Union (AU) Summit for the agreement to establish the African Continental Free Trade Area in Kigali, Rwanda, on March 21, 2018. The focus now is on how to bring on board all signatories and push for ratification by all. PHOTO | FILE | NATION MEDIA GROUP With the July 1, 2020 launch of the African Continental Free Trade Area (AfCFTA) fast approaching, 90 percent of outstanding issues on the rules of origin and tariff guidelines have been resolved. A meeting of director-generals of Customs, revenue authority officials and trade experts from member states, held last week in Kampala Uganda, focused on how to bring on board all signatories and push for ratification by all. The AfCFTA agreement came into force in May 2019 after ratification from 27 countries. Of the 55 African countries, 54 have signed the agreement, with only Eritrea holding out. A gathering of AU heads of state is scheduled to endorse the rollout plan for the AfCFTA agreement following their endorsement in January 2020. While African customs officials say AU officials are working on persuading Eritrea to sign the agreement, chances of realising a breakthrough remain low. Eritrean government officials could not be reached for comment by press time. Source: The East African

Africa is expected to commence trading under the African Continental Free Trade Agreement (AfCFTA) in July 2020. This gives the continent’s top diplomats, technocrats and negotiators less than a year to agree on the modalities that will govern the world’s largest free trade area since the establishment of the World Trade Organisation in 1995. Having attended the Source21 Common Market for Eastern and Southern Africa (Comesa) High–Level Business Summit held in Nairobi this past July, it was clear that the key issues that African governments need to agree on before trading begins under AfCFTA are duties, levies and Rules of Origin, which will determine the eligibility of goods and services to be traded in the free trade area. According to the Washington-based research group, Brookings Institution, intra-African exports accounted for 18 percent of the continent’s total exports in 2016, compared with 59 percent for intra-Asian exports and 69 percent for intra-European exports. AfCFTA is expected to fundamentally transform the current state of intra-regional trade in Africa by, first, phasing out tariffs on 90 percent of goods traded on the continent by 2022 and, later, helping countries build larger and more sophisticated regional value chains. To achieve these goals, a much broader and inclusive discussion that incorporates the interests and recommendations of key private sector players in Africa is needed. This is because businesses are able to channel investments into sectors where governments lacks the experience or technical expertise to succeed. Source: The East African

NAMANGA, Kenya/Tanzania (Reuters) - The speed limit is 110 km per hour on the new highway that Abadalla Chande uses to haul his truckload of animal feed from Tanzania to Kenya, two nations that share a common market often hailed as a model for the continent. But Chande is parked on the tarmac, caught up in a snarl of red tape. He is in a long line of trucks waiting for cargo to be scanned or for documents to be checked by officials. Kenya and Tanzania are the two largest economies in the East African Community (EAC) common market. It was set up in 2010 to allow people and goods to move freely among members, which also include Uganda, Rwanda, Burundi, and South Sudan. One of the most successful of Africa’s many trade blocs, it should be superseded by a continent-wide free trade area that will begin trading in July next year. But businessmen say the delays plaguing the East African union bode ill for the future of the unified market. “Sometimes we get to the border crossing and spend five, six days or even a week,” said Chande, who said he’d been waiting there more than a day. Behind him, police pried apart shouting drivers as hundreds of trucks slowly belched and groaned towards the Kenya-Tanzania border in Namanga town. Kenyan and Tanzanian officials say that even in a free trade area, goods crossing borders must be checked by multiple agencies including the tax authorities, plant health inspectorate, departments...

Trade among the interstate EAC members is still very low despite the various protocols that allow free movement of people and goods in the region. The East African Business Council says the volumes in trade among member states are as low 2%. Peter Mathuki, the CEO East African Business Council spoke at a meeting with private sector players at Busia border. Source: NTV

President Paul Kagame on Tuesday said that Africa is ready to play her role in addressing global challenges such as global inequality and others which affect the continent directly, which can only be addressed by working together. President Kagame made the remarks while addressing the United Nations General Assembly (UNGA) as global leaders gather in New York to galvanize multilateral efforts for poverty eradication, quality education, climate action, and inclusion. In his speech, President said the international community stands at a crossroads because the next decade could be remembered in history as a turning point, or as the moment when multilateralism lost its way, highlighting some of the key milestones that will set the momentum ahead. “Fortunately, the path forward is clear. Never before have we had such well-defined road-maps for joint action on development, climate change, and global health,” President Kagame said, citing the Universal Health Care and Climate Action declarations adopted this week as key steps. “The transformational potential of Universal Health Coverage is now at the top of the global health agenda. This is thanks to the outstanding leadership of the World Health Organisation and many other stakeholders,” “In Rwanda, more than 90 percent of the population has insurance coverage. This has contributed to significant improvement in health outcomes. It shows that it is possible for countries at every income level to make health care affordable and accessible for all,” President Kagame said. The Head of State called on global leaders to commit to replenishing the Global...

For many African economies, promoting trade is a priority. Rightfully so, considering its potential snowball effect. When trade flourishes, it sets off a virtuous circle, a country’s goods enjoy ready market, producers and the entire value chain benefit and growth spreads out. However, turning this vision into a reality is a challenge. Trade remains depressed below optimum levels despite sustained investment in smoothening movement of goods. Over the years, billions of dollars have gone into interconnecting the continent by expanding existing roads, railways, air and waterways while building new ones. The rollout of infrastructure has been backed by sustained diplomatic efforts under the auspices of regional trade blocs to ease movement of goods and people, as well as free trade protocols, such as the East African Community common market. These recently climaxed with the proposed African Continental Free Trade Area (ACFTA) that is being ratified and is expected to be a game-changer in unlocking intra-African trade. All these notwithstanding, the higher cost of goods made in Africa has rendered them uncompetitive on the global market. Source: Business Daily