44 African economies signed in March an ambitious treaty in order to form the African Continental Free Trade Area (AfCFTA). The goal is to eliminate tariffs on 90% of goods. The rationale behind more regional integration is to trade between equals and limit the share of vertical trade (exports of commodities and imports of capital). It should help ascend the value chain and increase the share of manufactured goods in African exports, since manufactured goods represent 43% of intra-African exports and less than 20% of African exports to other regions (75% is driven by commodities). The current predominance of commodity exports makes growth procyclical to commodity prices. Sizeable output volatility deters economic development. More trade openness should imply some economies of scale, through the relocation of production activities in regional hubs, although with some limitations explained by remaining capital controls. One may easily infer some welfare gains for the consumer. However, such economies of scale will also imply some losers. The recent period of low commodity prices was abruptly felt by countries with fixed exchange rates, as they lost competitiveness after other currencies depreciated (like the Nigerian Naira or the Ghanaian Cedi). In economies with low labor productivity, the likely impact of lower import tariffs is worrying trade unions. It explains why Nigeria and South Africa did not sign the free trade agreement yet, since these organizations are directly involved in political parties in these countries. A free trade area will increase intra-African exports We expect African exports to increase...

“The best is the enemy of the good” is an expression associated with Voltaire. It just might have critical relevance for the relation between the African Continental Free Trade Area (ACFTA), the COMESA-EAC-SADC Tripartite Free Trade Area (TFTA) and the regional economic communities (RECs) in Africa. But on 8 June 2018, Kenya deposited with COMESA Secretariat in Lusaka, the instrument of ratification of the TFTA, having ratified ACFTA as well and deposited the instrument with the African Union Commission. Both South Africa and Uganda were also taking the same approach of ratifying both. Just a year ago, it all looked impossible to many around the world that Africa could have a Continental Free Trade Area. But for some, this was de ja vu, for it was the same trepidation in 2015 just before the TFTA was launched on 10 June in Egypt. The TFTA was an African revelation, for it demonstrated the palpable possibility of and spurred strategists towards a continental equivalent. Having missed the deadline of December 2017, ACFTA was duly launched a mere three months later on 21 March 2018 in Kigali, with 44 out of the 55 African countries signing the Agreement on the spot. World history was made, despite entrenched scepticism rooted in pessimistic narratives about Africa but delighting and vindicating optimists around the world. There was some pending work though. Precise time frames were duly set. Annexes (with detailed regulations) to the Protocol on Trade in Goods were to be cleaned up by lawyers (scrubbed)...

Last week, the United Nations Conference on Trade and Development (UNCTAD) released its annual Economic Development in Africa report. This year’s report, “Migration for Structural Transformation,” documents African migration trends and highlights the economic impact of migrants and their potential for augmenting growth. Recently, the African Development Bank also released its Annual Development Effectiveness Reviews, which included a section on African migration. A key takeaway from both reports is that the majority of African migration is within Africa—and usually to neighboring countries. As Figure 1 from the Annual Development Effectiveness Reviews 2018 shows, in 2017, the largest migrant flows in Central, East, and West Africa were to other countries in their respective regions. Interestingly, there was very little migration between East Africa and West Africa in 2017. Two other notable findings from the report are that the middle class in Africa migrates to the region’s richer countries, and the need for jobs is a major driver of migration in poorer countries. Looking further into intra-African migration, Figure 2, from UNCTAD’s Economic Development in Africa report, highlights the 15 top corridors for intra-African migration in 2017 by migrant stock. International migrant stock is an estimate of the total number of foreign-born people in a country at any given point in time. In 2017, the Burkina Faso to Côte d’Ivoire migration corridor had the largest stock of migrants at 1.3 million. Migration in the other direction, from Côte d’Ivoire to Burkina Faso, was also in the top five. According to the report,...

With the giants of Africa, Nigeria and South Africa, faced with a crisis at home, East African countries are increasingly becoming a suitable alternative for foreign investors and large consumer companies. Both of Africa’s largest economies have experienced growth at below 2%, hit hard by fall in global commodity prices in 2016. While East African countries’ led by Ethiopia, Kenya, Tanzania and Rwanda have been enjoying growth rates not less than 5% since then. Coca-Cola Beverages Africa (CCBA), the continent’s largest soft drinks bottler, recently announced it would invest $100 million in Kenya over the next five years to improve infrastructure and launch new products. Earlier in May, the company had also launched a $69 million new juice line at its Nairobi plant, one of its four bottling plants in Kenya. The South-African based company made its strategic move into Kenya, and the East African market when it bought Equator Bottlers, the third largest Coca-Cola bottler in Kenya in 2017. “With a population of over 45 million and a rapidly urbanising population, 72% of whom are under 30, Kenya offers opportunities for growth and investment,” Daryl Wilson, country Managing Director for Equator Bottlers, said after it was acquired by CCBA last year. Within sub-Saharan Africa, East African countries—especially Ethiopia and Kenya, and to a lesser extent Uganda and Tanzania — have seen an increase in investments from consumer goods’ companies. The region’s positive economic growth, political stability, an improved regulatory environment and a big market of over 120 million people...

South Sudan said on Thursday it had agreed with its northern neighbour Sudan repair oil infrastructure facilities destroyed by conflict within three months to boost production in Africa's youngest country. Michael Makuei Lueth, South Sudan's information minister, told Reuters officials agreed with their visiting Sudanese counterparts to "evaluate and assess the damage" to South Sudan's oilfields in the Heglig area in the country's north. "There is an agreement between the two oil ministries of the two countries. They agreed to cooperate and work together in order to repair (the damage)," he said. South Sudan depends virtually entirely on oil sales for its revenue but production has declined since war broke out in the country in 2013. The oil is shipped to international markets via a pipeline through Sudan. Fighting was triggered by a political disagreement between President Salva Kiir and his former deputy Riek Machar and a regionally brokered peace pact failed to end the war after violations by both parties. Officials from the two countries "agreed that within the period of three months they will repair all the oil blocks and resume oil production in the region," he said referring to the infrastructure in the oil blocks. The war has uprooted a quarter of South Sudan's population of 12 million, ruined the country's agriculture and battered the economy. A joint force would also be established by both countries to protect the oilfields from attacks by both rebels forces in South Sudan and Sudan. Source: Devdiscourse

Food safety and plant health inspectorates from 19 African countries are in Nairobi to discuss ways to streamline regulations ahead of Africa-wide free market access. The meeting sponsored by United States Aid for International Development (USAid) heard that Africa must uphold high standards in food and crop health to generate inter-country trade as well as boost confidence with processed agro-products heading to foreign markets. Council of Governors Agriculture Committee vice chairman Jackson Mandago said Africa must invest in research as well as share knowledge on technological innovations with farmers to boost food production and collaborative research. Mr Mandago, also the Uasin Gishu governor, said Kenya must heavily invest in public research that will enable free roll-out of all innovations realised during research. “Private companies conducting research have an obligation to commercialise their findings and profit from their work, but public agricultural research agencies have a national duty to benefit the public,” he said. Kenya Plant Health and Inspectorate Services (Kephis) managing director Esther Kimani said it had requested for Sh1.4 billion to enable them equip their research stations as well as prepare staff for prompt response measures in case of an outbreak. Source: Business Daily

Globally, women’s contribute to agricultural development in various capacities as producers, labourers and marketers. They have an important role to play in agricultural development and food security through entrepreneurship. In developing countries women’s role as agriculture entrepreneurs is not fully explored and well recognized. Women entrepreneurs in agriculture are facing real challenges like access to financial resources, assets and training. As per FAO estimates, women worldwide are responsible for more than half of all the food produced. This includes up to 80% of food production in African countries, 60% in Asia and between 30 and 40% in South America. This shows that main activity in which rural women’s are engaged is farming. Again rural women’s are suffering from poverty due to small land holdings and subsistence farming. Gender bias and women’s low social standing due to the patriarchal nature of societies women’s are rarely legally or socially recognized as head of the farm. They are seldom granted land tenure rights and often have less access to essential production inputs such as: land; financial services; access to markets; storage; and technical support. Agripreneurs in Rwanda Rwanda is one of countries encouraging and supporting women entrepreneurs in Africa. According to the Global Gender Gap Report, Rwanda is ranked 6th globally in terms of closing gender gaps. The Government of Rwanda has made a strong political commitment to enhance gender equity and equality and is determined to implement in government policies at all levels. Rwanda is a signatory to international and regional legal...

For many Americans, coffee is less of a luxury drink and more of a daily necessity. As of 2018, 64 percent of Americans consume at least one cup of coffee daily. East Africa, one of the world’s largest coffee producers, is a historically poor region that has seen recent growth in trade due to the growing demand for coffee and support given to its farmers from U.S. foreign aid. These factors are supporting the East African coffee market. An Expanding Global Market East African coffee market expansion is the result of a few recent developments. First, the global market for coffee has been expanding as more people are escaping poverty and gaining the means to afford coffee. For example, some of the fastest-growing markets for coffee include Asian countries on the rise such as Vietnam, Indonesia and India. Due to the expanding coffee market, East African coffee producers can expand their business and look to the future with optimism.  Ugandan coffee producers are explicitly targeting these new markets. In 2017, the country reported a 36 percent growth in production and a 15 percent growth in exports. This fivefold increase in their share of the global coffee market is a direct result of new regions of the world being able to buy their product. In this way, reducing global poverty has a ripple effect that expands the global market and benefits everyone. The Benefits of U.S. Foreign Aid On top of the growing market, U.S. foreign aid has been helping to...

The 2018/19 budget is a step-down from the $110,130,184 presented to the House in the previous financial year. The EAC has presented for consideration budget estimates for the financial year 2018/19, totalling $99,770,716 (about sh379b) to the East African Legislative Assembly (EALA). The chairperson of the EAC council of ministers, and Uganda’s 2nd Deputy Prime Minister, Ali Kirunda Kivenjija, presented the budget to the assembly in Arusha Tanzania. The 2018/19 budget is a step-down from the $110,130,184 presented to the House in the previous financial year, a statement issued yesterday said. According to Kivejinja, priority Interventions for 2018/19 will focus on enhanced free movement of goods in the region and further liberalization of free movement of labour and services; improved cross-border infrastructure to ease cost of doing business in the region; and enhanced regional agricultural productivity. Other priority interventions include enhanced industrial development through investment in key priority sectors including leather and textile; skills development, technological advancement and innovation to stimulate economic development. The implementation of the roadmap for the attainment of the EAC Monetary Union; strengthened Peace, Security and Good Governance and Institutional Framework for EAC Political Confederation are also set for consideration. The 2018/2019 Budget is allocated to the Organs and Institutions of the EAC as follows; East African Community Secretariat ($46,693,056), East African Legislative Assembly ($17,885,852) and the East African Court of Justice ($3,982,446). The Inter-University Council for East Africa shall receive ($6,847,969), Lake Victoria Basin Commission ($13,357,673) while $ 2, 518,137 is earmarked for the Lake...

The Building and Construction Industry in East Africa is witnessing a continuous growth and as a result driving up numbers in employment and productivity, experts have said. According to East Africa BUILD, the growth and getting more international exposure as the Governments and Trade Associations have boosted the confidence of international investors in the region which is a significant driver of economic activity and development. "East Africa's growth in the building & construction sector drives employment and productivity, which in turn encourages government investment in quality infrastructure projects. As East Africa's population continues to grow, now more than ever, it needs quality infrastructure." A statement from the firm adds. The African Construction report by Deloitte, states that the number of construction projects in East Africa have gone up by 65.1% between 2016 and 2017 while the increase in the total value of projects has been much lower, but still considerable at 20.7%. A brand new industry-owned trade show for the building & construction industry has been announced by a team of individuals with over 15 years of experience and it will be held for the first time in September 2018 in Tanzania. The event, which will be held from 20 - 23 September this year, at the Mlimani City Conference Centre, Dar es Salaam, Tanzania is expected to have over 200 foreign and local exhibitors from over 19 countries which include Turkey, China, India, U.A.E, Germany to name a few. East Africa BUILD will be the ideal platform for local...