The Extraordinary Summit on the African Continental Free Trade Area (AfCTFA) that took place in Kigali, Rwanda last year brought together African leaders during which the agreement for establishing the free trade area was presented for signatures. The agreement was signed by 44 of the 55 African Union (AU) member states adding another 5 during the AU summit in Mauritania in June bringing the total number of committed countries to 49 by the end of July 2018. The Continental Free Trade Area (CTFA), will unleash Africa’s potential assembling a population of 1.2 billion people, with a GDP of $3.4 trillion as the world’s largest free trade area since the inception of the World Trade Organisation (WTO). To leverage on the CFTA cross border opportunities, Africa will require strategic infrastructure; both physical and financial. Physical infrastructure includes transportation networks such as rail, road and power that underpin the economic growth potential and financial infrastructure comprising of institutions that will enable effective operations and empower Africa to unlock and tap into the opportunities underlined by the agreement. Tanzania is known as the trade gateway for the neighbouring land locked countries through the port in Dar es Salaam. According to the Ministry of Trade, the port handles 60% of Rwanda’s exports and imports. Zambia, Malawi, Uganda, Burundi and the Eastern region of the Democratic Republic of Congo (DRC) all depend on the port of Dar es Salaam. Tanzania has commenced review of its policies to spur cross border trade in anticipation of the CFTA. In a statement issued by the...

Ethiopian Deputy Prime Minister Demeke Mekonnen addresses a joint press conference after signing memorandums of understanding (MoUs) in Khartoum, Sudan, on Feb. 28, 2019. Sudan and Ethiopia on Thursday signed memorandums of understanding (MoUs) on economy and trade in the meetings of the higher Sudanese-Ethiopian economic committee in Khartoum. (Xinhua/Mohamed Khidir) Source: Xinhau

Over the past three decades regional integration schemes have mushroomed across Africa, Asia, Europe and the Americas. Regional integration promotes global advantage for businesses of the regional bloc members by creating common markets which open up borders and eliminate import/export tariffs. This increases the bloc’s global competiveness by marshalling the individual States’ potentials and presents their case in unison. African countries have been working towards integrating at continental level as well as sub-regions. The quest for the East African region to integrate has seen coming together of six states: Burundi, Kenya, Rwanda, South Sudan, Tanzania and Uganda which arguably is a good move. The East African Community (EAC) integration is anchored on four pillars: Customs Union, Common Market, Monetary Union and Political Federation with significant strides already made on the former three. Imperatively, the Political Federation pillar whereby the region envisages a Superstate with a single government makes EAC integration unique. Successful integration needs a ‘forward-looking’ strategy. The European Union is lauded to be the most successful integration scheme and from which lessons are drawn but the on-going Brexit negotiations have apparently cast a shadow on it. The EU has also been through a number of crises that threatened to tear down the Union. These included: the Eurozone Crisis (2009), the Ukrainian Crisis (2014), and the European Migration Crisis (2015). However, the EU has weathered these storms and forged forward albeit at a slower pace. This can be attributed to the firm political will from EU member States and the...

Johannesburg, Jan 11 (Forbes): One of Africa’s long reigning leaders and President to East African country Rwanda says Africa should start engaging in continental trade and maximising export to the world to reduce African dependency on foreign funding. In a recent interview with Forbes Africa Kagame emphasised the importance of localising production and maximising export to the rest of the world, saying that will encourage African economies to be self dependent  and increasing players in the global economy made in the continent. Paul Kagame is the current Chairman of the African Union preceding the role from former Chad Prime Minister and Diplomat, Moussa Faki Mahamat. Kagame assumed his role in the AU from Jan 2018 and has been championing African Economic Development since. The Rwandan president is best known for his diversity in parliament by having a majority parliamentary cabinet represented by women. His made in Rwanda strategy qualified him as African of the year at the 2018 All Africa Business Leaders Awards (AABLA) which is an annual event that honors business excellence and leaders who have played a significant role in the business industry and communities. Kagame has spent the previous year improving economic climate and conditions in his home country Rwanda. His most important highlights include securing a contract with Alibaba and improving the ease of doing business in Rwanda which was attested by the world bank. Whilst overcoming the milestones of a painful past that has Rwanda stills in scars, where more than 1 million people lost...

You won’t have missed the nationalist mood engulfing big economies around the world: the US, Britain, Brazil, France and Germany are all stained by proto-fascists in and around power. Politicians in these countries talk of taking back control of borders; they are keen to identify those who should and should not receive state support.   But the politicians of Africa are headed in a different direction. Far from erecting walls, they want to build “the world’s largest free trade area since the formation of the World Trade Organisation”, according to Sierra Leone’s trade minister Peter Bayuku Konte. The African Continental Free Trade Area, sporting the catchy acronym AfCFTA is an African market that is 1.2 billion people strong and has a gross domestic product of $2.5trn. Sierra Leone signed up to become a member on 7 November. It is a bold step by the continent’s leaders. A “new chapter in African unity”, according to Rwanda’s President Paul Kagame, the energetic chair of the African Union (AU). He has been remarkably successful in whipping into line so many peers. Experts agree. “This level of diplomatic and political support for regional integration and trade has not been seen in Africa for a long time,” says Trudi Hartzenberg, executive director of the Trade Law Centre, which is based in South Africa. The economics certainly appear to stack up. Tiny fragmented African markets cannot hope to compete for global capital. And Africa’s most successful regional economic bloc, the East African Community, has been attracting great...

However, infrastructure deficit may hinder the progress of building AfCFTA Chinese entrepreneur He Liehui boarded a flight to Ghana and visited Africa for the first time 18 years ago. Now his businesses have landed on more than 20 African countries, after knocking on the door of each market one by one "The process was extremely difficult, due to a lack of understanding of the culture and laws of different African countries," said He, founder and president of the Touchroad International Holdings Group, a multinational business engaging in international trade, cultural exchanges, tourism, and special economic zone construction in Africa. To cite a few examples. His T-shirt business failed in Ghana, he lost large amounts of money when he first entered Nigeria, and he also had other experiences, like escaping from an arsenal explosion and stray bullets. African countries all have different rules and regulations, and each market has its unique features. The experience of doing business in one country could hardly be copied in another, said Tang Xiaoyang, a researcher on Africa studies at Tsinghua University in Beijing. "Having many scattered markets has long been an important factor that makes it difficult for traders and investors to expand their business on the African continent, and hinders the economic development of Africa," he said. However, the grand plan of building the African Continental Free Trade Area will definitely bring great economic momentum to the continent when it is completed. The AfCFTA was first signed in March of 2018 by 44 countries...

Last year was a dynamic year for Africa in both positive and challenging ways. The Africa Continental Free Trade Area (AfCTA) was effected; Nigeria showed signs of moving out of recession with risks of going back, South Africa dipped into recession and the growing debt burden of African governments was brought into focus. In terms of economic diplomacy, 2018 saw China announce a $60 billion package for Africa during Forum on China-Africa Cooperation (FOCAC), the US passed the Build Act which saw the creation of the International Development Finance Corporation, an agency that can invest up to $60 billion in the developing world; further the Trump Administration announced new strategy for Africa. The European Union proposed a new Africa-Europe Alliance for Sustainable Investment and Jobs involving a 25 per cent increase in the EU Africa budget for 2021-27 to about €40 billion. Given all these factors, what are the key focus points for Africa in 2019? Firstly, the indebtedness of African governments will be watched. The pace at which African governments are accruing debt is causing concern. The International Monetary Fund (IMF) points out that Sub-Saharan Africa public debt was at 57 per cent of its GDP in 2017, an increase of 20 percentage points in just five years. In other words, Africa as whole, owes more than half the value of its gross domestic product (GDP). In October the IMF raised Kenya’s risk of defaulting on debt repayments from low to moderate, forecasting the country’s total public debt will...

Rwandan official shave said that farmers and exporters will greatly benefit from the Electronic World Trade Platform (eWTP), an Alibaba e-commerce platform – the first of its kind in Africa, launched last year in Rwanda. The remarks were made during a 4 day workshop concluded on Friday in Hangzhou China where Rwandan officials were trained on the transformative impact and promise of a new data-driven digital economy and how to drive economic growth by accelerating implementation of digital solutions like e-commerce, e-finance, big data industries and other digital solutions. The eWTP aims at opening doors for small businesses in Africa to take part in cross-border electronic trade. During the workshop, twelve participants from Rwanda met with Alibaba executives for the training that aimed at equipping them with knowledge to continue supporting the development of Rwanda’s digital economy. Participants included the Ambassador of Rwanda to China Charles Kayonga, the CEO of National Agricultural Export Development Board (NAEB) Ambassador George William Kayonga and representatives from the Ministry of ICT and Innovation, the Ministry of Trade and Industry, Higher Education Council (HEC), Rwanda Utility Regulatory Authority (RURA), Rwanda Information Society Authority (RISA), Rwanda Development Board (RDB) and National Agricultural Export Development Board (NAEB). The CEO of NAEB Amb. George William Kayonga who was leading the delegation from Kigali also said that Rwandan farmers and exporters will benefit from eWTP as they will be able to directly export value added products to China, a country with a market of 1.4 billion people. Charles Kayonga, Rwanda’s...

The Chinese government's move to cut taxes will further open the floodgates for cheap imports into Kenya, dealing a blow to local manufacturers. The three-year programme will see corporate-income, value-added and other corporate taxes for small and medium enterprises (SMEs) reduced, with the country's Central Bank cutting the amount of reserve a bank should maintain so as to release more money for lending. The move will enable Chinese factories to produce goods at far much lower costs, giving them an edge in the global marketplace. This comes as latest statistics show that China is Kenya’s largest source of imports for machinery and transport equipment, accounting for Sh291.8 billion. It's followed by India at Sh161.2 billion, Saudi Arabia (Sh138.4 billion) and UAE (Sh126 billion). With a conducive environment back home, Chinese companies could launch a trade offensive against Kenyan companies reeling from high energy costs, punitive licensing regimes, cheap imports and high taxes. In an interview, the Kenya Association of Manufacturers (KAM) Chief Executive Phyllis Wakiaga said the trend is worrying since Kenya’s import bill increased by 20.5 per cent from 2016’s Sh1.4 trillion, to Sh1.7 trillion and Sh25.6 billion in 2017. And the last 10 months of 2018, goods worth Sh997.1 billion came compared to Sh291.8 billion worth of exports, hurting Kenya’s quest of finding a home-grown solution that promotes local manufacturing and hence more exports. KAM said continued importation of goods, even those made locally, makes no sense of the government's plan to promote Kenyan firms. KAM noted that...

As Africa’s ministers of Trade met in Cairo between December 12 and 13, last  year, there was a lot to celebrate. Within nine months of its coming into being on March 21, 2018 in Kigali Rwanda, the African Continental Free Trade Area has been ratified by 13 countries. Only nine more countries are needed to reach the required 22. This will enable the second ratification instrument for the Agreement to come into force, and for the free trade area to be formally launched at the next African Union Summit next month. With this imminent entry into force, priority has now rightly shifted to fast tracking implementation of the agreement so that economic operators can actually utilise the expected trade and investment opportunities. On the shelves The issue is, Africa has been good at adopting agreements and taking numerous decisions, but very bad at implementation. The African Free Trade Area should not join this lot of instruments that remain on the shelves, hardly of any value in the end. Fortunately, some work has been done to publicise the African Free Trade Area around the continent and the world. The communication and visibility strategy mounted by the African Union and its partners has been effective in mobilising and reaching out to political leaders, the media, civil society, the private sector and academia. Though many have heard about the initiative, good knowledge of the rules of the game will be important to facilitate actual utilisation of the trade and investment opportunities. Long term and executive...