When the Africa Continental Free Trade Area is implemented this year, it will create a single market for goods and services for the first time in the continent’s history. The agreement will cover a geographic area with a combined GDP of $3.2-trillion and a population of 1.2 billion people. It has the potential to drastically accelerate economic growth and exceed the African Development Bank’s current estimates for GDP growth from $1.7-trillion in 2010 to more than $15-trillion by 2060. This has the potential to shift Africa from being an aid-dependent continent to becoming an investment-dependent continent. According to the Brookings Institute, African foreign direct investment (FDI) inflows accounted for only 2.9% of total global FDI inflows in 2017, compared to the 49.8% share for developed economies, and 10.6% for Latin America and the Caribbean. A continental super bloc has the potential of creating an attractive value proposition for investors who are dealing with the fallout from Brexit, a US-China tariff war and a global economy that is falling short of projected growth targets. For African governments, businesses and citizens, the prospect of the Africa Continental Free Trade Area (AfCFTA) has prompted widespread excitement and optimism, especially among some of Africa’s leading business and political figures. Rwanda’s President Paul Kagame said: “Speaking with one voice as a continent will emerge as perhaps the most important provision of all for the success of the African Continental Free Trade Agreement.” South Africa’s President Cyril Ramaphosa publicly stated that “this is a free trade...

The African Continental Free Trade Area Agreement (AfCFTA) could soon gather the minimum required ratifications to put it into effect. So far, 19 countries have ratified the agreement with three more expected to ratify by mid this year, effectively gathering the 22 ratifications that are needed to make the agreement operational. While this will not pave way for its immediate implementation, it will usher in another phase of negotiations among signatories on aspects of the agreement. The negotiations will involve multiple and complex issues which could take months and will cover aspects such as rules of origin, procurement processes, services protocols and tariff negotiations among others. Experts say that once the ratifications meet the required minimum, the AfCFTA secretariat will among other things have to prioritise negotiations to make way for implementation. The target for the implementation is mid-2020. Andrew Mold, the Acting Director of United Nations Economic Commission for Africa- Eastern Africa Sub-regional office said negotiations will lay out key aspects of implementation. “The complexity of the negotiation process is that there is a lot to be discussed; the devil is in the detail. It is not simply merchandised trade, we are talking services protocol, government procurement process, competition. There is a lot to be discussed to make the single market work,” Mold said in an interview. Considering multiple parties (countries) to be involved in the negotiations, there have been concerns about the length of time of the process with most fearing that it could be a major setback...

The Common Market for Eastern and Southern Africa is pushing member states to align their laws with the bloc’s regulations to abolish trade barriers. The bloc says that the Comesa Seed Trade Harmonisation Regulations will lead to increased seed production, supply reliability, enhanced trade and competitiveness of the seed sub-sector. The regulations give seed companies the impetus to invest in testing and trials targeting a bigger market of about half a billion people. Besides, it will eliminate duplication of trials, which often takes years, and enhance collaboration in research. Only seven countries of the 21 Comesa member states have harmonised their national seed regulations with the regional ones. These are Burundi, Kenya, Malawi, Rwanda, Uganda, Zambia and Zimbabwe. This push comes at a time when a new report by Netherlands-based Access to Seeds Foundation, which evaluates 22 leading seed companies, shows that two home-grown African seed companies top the 2019 Access to Seeds Index in the region for playing a key role in raising smallholder farmers’ productivity. The two, Kenya’s East African Seed and South Africa-based Seed Co, topped the index due to their broad portfolio of seeds. “Two African seed companies at the top of the ranking is no surprise, given their deeper understanding of the region and the challenges smallholder farmers face. It shows also that these relatively small seed companies are ahead of larger multinational in integrating smallholder farmers into their business models,” said Sanne Helderman, Access to Seeds Index senior research lead. Other East African companies...

He said technology is a prime enabler of sustainable competitiveness, with the power to elevate African countries to middle-income level. Ruto noted that countries can embrace modern technology by investing in education and training, beginning by aligning the needs of the private sector “vis-a-vis what our youth are taught”. “A suitably reoriented technology should impart leadership, digital and soft skills in every young person going through the education system,” he said. The Deputy President spoke on Tuesday in Munyonyo, Uganda, during the Africa Now Summit 2019. Leaders attending the two-day conference, whose theme is “Towards a secure, integrated and growing Africa” are Uganda President Yoweri Museveni (Uganda), Somalia President Mohamed Abdullahi Mohamed and Uganda Prime Minister Ruhakana Rugunda. Others are Tanzania Vice President Samia Suluhu, Secretary-General of the United Nations Conference on Trade and Development Mukhisa Kituyi and Chairman of Heirs Holdings and United Bank for Africa Tony Elumelu. Having appreciated the power of technology in furthering growth, Ruto said Kenya was scaling up training and support for innovation by financing and facilitating market access for young people to create, collaborate, test and improve concepts. “This is how vibrant tech hubs arise, survive and drive structural change,” he noted. At the same time, Ruto urged African leaders to refine their education to focus on science, technology and innovation. He said the move would help align training with market needs and to the demands of the Fourth Industrial Revolution. He told the conference that Kenya was already implementing the “most ambitious...

As the Economic Community of West African States (ECOWAS) is still battling with teething problems of its age long pet project of single currency,  the Africa Union (AU) may have seized the initiative to launch common monetary policy and single currency to accelerate economic integration of African countries. According to Ms Naglaa Nozahie, a Special Advisor to the Governor of the Central Bank of Egypt, who represented the Association of African Central Banks (AACB) at the third session of the Specialised Technical Committee of the African Union (AU) on Finance, Monetary Affairs, Economic Planning and Integration in Yaounde, Cameroon last week, the initiative is to culminate in the establishment of the African Central Bank (ACB) by AU in 2045. Late last year, the Africa Export-Import Bank (Afreximbank) said, at the Intra Africa Trade Fair (IATF)in Egypt that it was working on an arrangement that would enable countries trade and settle transactions costs without reference to external currencies. According to its Director of Corporate Communications, Mr Obi Emekekwue, Afreximbank is already working on the scheme that would enable African countries trade among one another without resorting to other convertible currencies like the dollar, pound sterling, euro and the Chinese renminbi. He disclosed that the bank had already commenced a test run of the scheme, which would be launched across the continent soon. The lack of such deal to facilitate urgent settlement of trade mighteventually truncate the dream of a common market under the African Continental Free Trade Agreement (AfCFTA) regime, according to the...

Experts at the aviation summit in Kigali said that African governments will need to depoliticise aviation, shelve sovereignty and support airlines financially to build stronger inter-bloc co-operation. Up to 397 African airlines have gone under since 1960, and more could shut down if they don’t evolve fast. Aviation industry captains and regulators have been pushing for open skies and making air transport affordable in Africa, but these have largely remained pipe dreams even as the number of new flyers grows. For most Africans, it takes about three weeks’ salary on average to travel by air on the continent, whereas it takes only a three-day salary to fly the same distances in other parts of the world like Europe and the US. African airlines incur the highest operational costs globally due to prohibitive fuel costs, taxes and other charges, unfriendly Customs regimes and monopolistic environments. Although up to 28 countries have already signed up to the Single African Air Transport Market (SAATM) treaty, only two have implemented it fully. “It is a form of colonial hangover that many countries still suffer from. It’s just a matter of time and everyone will see the benefits of an open air space and join,” said Ladislaus Matindi, the CEO of Air Tanzania. African airlines were accused of neglecting co-operation with others on the continent in maintenance, training and operational services, opting to work with foreign airlines instead. “Even when requesting additional frequencies or stops, you are blocked in many African countries. There is no...

Kenya is targeting to take over the Sh3.2 billion Pakistani tea imports market from India following a dispute between the two Asian countries that has seen tea from Mumbai blocked from accessing the neighbouring state. The East African Tea Traders Association (Eatta) says Pakistanis will have to fill the gap with tea from elsewhere due to the standoff, with Kenya — whose unsold stocks are growing — standing to benefit. Pakistan is the leading buyer of Kenya’s tea importing 40 per cent of the total produce in the country. “This could be of benefit to Kenya because Pakistani is the leading buyer of our tea and the differences India will see them seek more of the commodity from the country in order to bridge the deficit created by the stalemate,” said Eatta managing director Edward Mudibo. His sentiments were echoed by Kenya Tea Development Agency (KTDA) sales and marketing manager John Bett who said Kenya can benefit from the 16 million kilo gap that would be created by lack of Indian tea. However, Mr Bett noted that Kenya might not benefit much though if Pakistan rupee lose value against the dollar. “Tea is sold in dollars and if the Pakistan rupee sheds its value against the greenback, then it means our tea will be expensive there,” said Mr Bett. There has been tension between the two nuclear powers following the killing of Indian soldiers by suspected Pakistan-based militants. In the last financial year, Pakistan imported 184 million kilogrammes of tea...

The Africa Continental Free Trade Area (AfCFTA) signed in March 2018 aims to establish a single market across the continent. This challenge is also an opportunity to extend the provision of regional public goods beyond hard infrastructure. Peace and security, mining, and energy are such examples covered in the Africa Economic Outlook 2019. Until now, evaluation of the progress of integration across Africa has centered on the eight African Union-recognized Regional Economic Communities—and seven other economic organizations—all primarily aimed at deepening intra-regional trade. But regional integration has always been about more than an exchange of market access and cooperation. At the very least, there is always a need for rail, road, and other means of communication. In its assessment of progress and prospects for the recently signed African Continental Free Trade Area (AfCFTA), the Africa Economic Outlook 2019 concentrates on the progress of cooperation to develop regional public goods. A tally of regional organizations dealing with regional public goods shows that five deal with energy, 15 with the management of rivers and lakes, three with peace and security, and one with the environment. The key distinctive feature of regional public goods is that, unlike national public goods, no single body with the authority of a state exists to ensure the supply of the good. Since all Regional Economic Communities have more than two members, some collective action is necessary to provide these regional public goods. Governance (implementing shared standards and policy regimes) is the intermediate public good necessary to generate the desired regional public goods:...

President Uhuru Kenyatta and his host Ethiopian PM Abiy Ahmed during the celebration of the historic defeat of colonial forces byEmperor Menelik II in 1896 near the town of Adwa. /PSCU President Uhuru Kenyatta has asked African leaders to prioritise and fast-track integration processes for the continent to achieve faster development. He said the current crop of leaders need to follow the legacies of the founding fathers of African countries by uniting people. Uhuru spoke last evening at the Presidential Palace in Addis Ababa, Ethiopia, during a state dinner hosted in his honour by Prime Minister of Ethiopia Abiy Ahmed and President Sahle-Work Zewde. President Uhuru called for the removal of all systemic barriers that hinder the blossoming of people-to-people relations in Africa. "We need to build on the warm relations that exist between our governments to include our populations so as to foster people-to-people interactions," the Head of State said. Uhuru also said for Africa to defeat ignorance, disease and poverty, Africans must work together as good neighbours and loving brothers. "Our people should be let to travel throughout their continent freely without any hindrances. We are all brothers and sisters with a common heritage as Africans," he said. The President commended the Ethiopian leadership for the progress being experienced in the country. He said Kenya is keen on participating in the planned regeneration of Addis Ababa into a modern African city. Uhuru said it doesn't make economic sense for Africans to keep spending resources needed to develop the...

On the eve of its ratification in Ethiopia, the African Continental Free Trade Area (AfCTA) has moved closer to its implementation phase with expert’s discussion held in Gabon to review the guidelines for preparing implementations. The AfCFTA, which was adopted by the African Union in Kigali, saw more than 50 member states signing the Kigali Declaration and the Free Movement Protocol exactly a year ago. Now, the number of countries that ratified the CFTA has reached 19, leaving the AU only with 3 countries to launch it. The discussion in Gabon reviews current production and trade within a national and regional context, the identification and prioritization of opportunities for value chain development; a thorough analysis of constraints, including no tariff barriers and competitiveness issues faced by businesses and means to address them and the like. The development of the plans is supported by the African Trade Policy Centre (ATPC) of the United Nations Economic Commission for Africa, UNCTAD and the European Union. According to African Union’s report on the possibilities the CFTA carries, it says that, “The AfCFTA will bring together all 55 member states of the African Union covering a market of more than 1.2 billion people, including a growing middle class, and a combined gross domestic product (GDP) of more than USD 3.4 trillion. In terms of numbers of participating countries, the AfCFTA will be the world’s largest free trade area since the formation of the World Trade Organization.” According to the UNECA, the CFTA is said to...