In Summary It is expected that up to 90 per cent of goods and services traded within the continent will benefit from preferential trade terms. This includes elimination of tariff barriers. The Africa Continental Free Trade Area (AfCFTA), billed as a catalyst for intra-African trade, officially commenced operations on January 1, 2021, six months later than initially anticipated. Through the AfCFTA, tariff and non-tariff barriers that have historically posed as an impediment to intra-African trade will be conclusively dealt with. Specifically, it is expected that up to 90 per cent of goods and services traded within the continent will benefit from preferential trade terms, inclusive of the elimination of tariff barriers. To date, all African states, save for Eritrea, have signed up to the AfCFTA, while all but twenty African states have ratified the AfCFTA. Within the East African region, only Tanzania, Burundi and South Sudan are yet to ratify the agreement. In a bid to ensure that the East African Community (EAC) is not left behind in taking advantage of the agreement, Tanzania, Burundi and South Sudan have been urged to complete the ratification process of the AfCFTA before 01 June 2021. It is anticipated that the successful implementation of the AfCFTA will have tangible benefits on the African continent, inclusive of accelerated industrial development, expanded economic diversification and enhanced job creation. Indeed, where AfCFTA is successfully implemented, intra-African trade stands to increase by 33 per cent in the medium term, from the current 16 per cent. This will...

Thrust five years into the future by Covid-19, as management firm McKinsey puts it, most of what we expected to see in 2030 will soon be upon us. A disruption in the workplace in 2020 changed the fortunes of millions, either throwing them out of their jobs or elevating their profiles. Most of those who had an upturn in fortunes were in technology and automation. The World Economic Forum (WEF) late last year released a list of jobs that, it said, will be marketable in the future - which we might already be in - and those that will be obsolete because of automation. It is not surprising from the data that technology will be taking over a significant number of jobs. It was certain the world was always inching closer to this by the day. The world is welcoming artificial intelligence (AI) and robotics on an unprecedented scale and the Internet of Things (IoT) is now common talk. The need to cut overheads and reduce office population amid the pandemic prompted industry leaders to find ways of using automated systems to deliver, with many people losing their jobs. “The past two years have seen a clear acceleration in the adoption of new technologies among the companies surveyed,” said WEF. “Cloud computing, big data and e-commerce remain high priorities, following a trend established in previous years.” Job loss Sectors such as the arts, entertainment and recreation, hospitality, retail, mining, real estate, rental and leasing saw many employees lose their jobs....

In Summary Freight charges from Mombasa to Kampala increased from $2,200 (Sh238,150) to $2,500 (Sh 270,625 ) per container. This is pegged mainly on the delays along the corridor and especially at the ports of loading and the exit borders. Transport cost along the Northern Corridor has jumped 48 per cent in the wake of the Covid-19 pandemic, mainly on measures to contain the virus by regional states. A report by the Shippers Council of Eastern Africa (SCEA) indicates road freight rates increased in the key trading route which runs from the Port of Mombasa, across the country, into Uganda, Rwanda, DR Congo, Burindi and South Sudan. Freight charges from Mombasa to Kampala increased from $2,200 (Sh238,150) in the pre-pandemic period to $2,500 (Sh 270,625 ) per container (both 20 and 40 foot), which extended into the first half of this year. The cost of moving containerised goods to Kigali from Mombasa also increased from $3,400 (Sh 368,050) to $3800 (Sh 411,350), pegged mainly on the delays along the corridor and especially at the ports of loading and the exit borders. Uganda is the biggest destination for transit cargo along the corridor, accounting for about 83.2 per cent of total transit volumes. That of transporting a container from Mombasa to South Sudan increased to $4,500 (Sh487,125 ) from $3,600 (Sh 389,700) while moving a container to DRC went up to $6,000( Sh649,500 ) between March and June this year, from $5,000 (Sh 541,250). In terms of border crossing times, it...

In May 2021, the bridge across the Zambezi River linking Botswana and Zambia was opened by the presidents of the two countries. The construction of the bridge, which replaces the longstanding, slow ferry service across the river, means trucks on regional routes can now cross the river in a few hours, or less, rather than the previous three days to a week. It also means they can avoid using the biggest crossing between the ports and factories of South Africa and the rest of Southern Africa – Beit Bridge, which is also one of the most congested borders in Africa. A one-stop border post at the bridge will allow easier thoroughfare. This project embodies the benefits that good infrastructure and joined-up bureaucracy offer regional trade, both of them generally in short supply. More than 250 trucks a day should be able to cross the Zambezi instead of the handful that were able to cross before, bringing down costs, increasing the security of cargo and providing an alternative route for trade to the sea for inland markets. It is not without potential pitfalls. One is the congestion that is likely to develop at Martin’s Drift border post, currently an alternative to the main border post at Gaborone into Botswana, as demand increases. And sections of the roads along this main trade route, an integral part of the North South Corridor, are in urgent need of repair, for example several hundred kilometres of a two-lane highway through Botswana to Kazungula, with eroded...

Ian Lessem, Managing Partner at HAVAÍC, investors in early-stage, high-growth technology businesses, notes a significant increase in investment demand for African technology startups. Startups on the continent are at a distinct advantage because they compete out of necessity. As a result, they can, and very often do stand toe to toe with startups in more the established tech hubs of Palo Alto, Singapore, London and Tel Aviv. African innovators face local challenges so pervasive; they simply have no choice but to tackle them head on and become subject matter experts in finding solutions for real world problems like food security, health, education, safety, financial services and logistics. African technology driven solutions borne out of necessity create efficiencies, new products and opportunities, and most importantly solve local challenges that resonate globally. Because of this they have the inherent ability to leap across national boundaries and sidestep the usual rules of cultural friction. With the world having quickly adjusted to the realities of the ongoing global social and economic crisis as a result of the Covid-19 pandemic, solutions that solve real world challenges are without a doubt the best opportunities for growth. People and businesses are craving solutions that make their day to day lives easier, better and less frictional, and the pace at which they are adopting technology to do this continues to accelerate. Not only does HAVAÍC support promising startups, it also understands the power of unlocking the potential of Venture Capital (VC) as an investment class in Africa. Investing...

With all the challenges that the Covid-19 pandemic has presented to Africa, there are many exciting changes afoot, and few are potentially more impactful than the African Continental Free Trade Agreement (AfCFTA). The AfCFTA is an exciting game changer agreement for the countries who are signatories. Currently, Africa accounts for just 2% of global trade. And only 17% of African exports are intra-continental, compared with 59% in Asia and 68% in Europe. The pact is designed to create the largest free trade area in the world measured by the number of countries participating. Connecting 1.3 billion people across 55 countries with a combined gross domestic product (GDP) valued at $3.4trn. It will boost regional income by 7% or $450bn, and lift 30 million people out of extreme poverty by 2035. Wages for both skilled and unskilled workers will also be boosted by 10.3% for unskilled workers, and 9.8% for skilled workers. While the Covid-19 pandemic has thrown a harsh spotlight on the vulnerabilities of global supply chains, the putting in place of the AfCFTA agreement couldn’t be more timely for Africa. AfCFTA is a catalyst for new ways of doing business, producing, working and trading within Africa and with the rest of the world. It highlights the significant and increasing commitment of the African Union to reducing poverty through trade. As Ngozi Okonjo-Iweala, newly appointed as the WTO director general, recently stated, “Trade is a force for good, and properly harnessed can help lift millions out of poverty and bring...

“Without doubt, AfCFTA could be considered as the game changer for the post COVID-19 economic recovery and transformation of Ghana, if we as a country can harness the numerous benefits of the agreement,” the minister said. To harness the benefits of AfCFTA, he said the government complemented the ongoing industrial transformation agenda by launching the National Export Development Strategy in 2020 to increase non-traditional export revenue to $25.3 billion by 2027. Inauguration Mr Kyerematen was speaking at the inauguration of 36 council members of the Ghana National Chamber of Commerce and Industry (GNCCI), in a speech read on his behalf by the Technical Advisor to the Minister, Mr Anthony Nyame-Baafi, on Wednesday, April 28 in Accra. The council members are expected to provide the needed support and guidance through their technical expertise and wealth of social capital to promote activities of the chamber. Private sector’s role The minister called on the private sector to spearhead the economic transformation of the country by taking full advantage of the African single continental market. He said the initiative would boost Ghanaian exports, stimulate investments and innovation, foster structural transformation, improve food security, enhance economic growth, and export diversification, and provide fresh impetus and dynamism to the economic integration of Ghana into the African market. “There are many benefits that Ghana will derive from effective implementation of the AfCFTA, including better harmonisation and coordination of trade between Ghana and other African countries,” he added. He said the government had developed a National AfCFTA Policy...

AfCFTA As countries rebuild their economies following the impact of COVID-19, Africa needs to step up productive and infrastructural integration, stakeholders at a regional presentation of the African Regional Integration Index (ARII) have said. The index, a joint publication of the Economic Commission for Africa, the African Development Bank and the African Union Commission, provides up-to-date data on the status of regional integration in Africa and assesses the level of integration for every regional economic community and its member countries. The Index report underlines the need for a renewed commitment to regional integration within Africa, speakers said. They noted that the beginning of trade under the African Continental Free Trade Area in January 2021, amid the Covid-19 pandemic and its disruptive impact on movement and economies, had thrown this into a sharper focus. Director of Trade at the East African Community Secretariat, Rashid Kibowa, said the Index report has great potential to address the three major challenges currently facing the continent: the Covid-19 pandemic, implementation of the AfCFTA, and poverty reduction. “There is a need for more dialogue on the ARII and methodology issues to expand the scope of coverage of the assessed integration areas. The fundamental issues behind the ARII ought to be whether integration exists for Africa and whether it is effective in terms of achieving poverty reduction and socio-economic transformation for the continent,” said Kibowa. The report, released in May of last year, found that overall scores for countries in Southern and Eastern Africa show huge room...

Tourism is among the industries that have been hit hardest by the COVID-19 crisis. Over a year since the onset of the pandemic, the numbers are staggering: Tourism destinations recorded one billion fewer international arrivals in 2020 than in 2019. A deep decline in international travel led to a loss of about USD 1.3 trillion in export revenues, more than 11 times the loss during the last economic crisis in 2009. 100 to 120 million tourism jobs were put at risk, a large portion in small and medium-sized enterprises. This is a grave concern for developing economies as they chart a course towards recovery. Driven by both public and private sectors, not only is tourism a vital source of foreign currency, it has the potential to serve as a development 'tool' to strengthen supply chains, improve local firm productivity, creates one out of ten jobs and provide income for women and young people. As a former minister for tourism myself, I have seen up close, the value tourism creates for local communities and how sustainable tourism creates economic value while preserving culture and natural assets. At a recent panel on tourism resilience and building forward better, during the WTO's Aid for Trade Stocktaking event last month, we discussed the future of tourism given the current challenges. Industry leaders from Costa Rica, Jordan, Kenya and Sri Lanka shared experiences from their own countries in responding and learning from crises, and insights on how they see the way forward for tourism. Three...

Global Britain should look towards supporting the development of Africa’s digital landscape, argue Pauline Girma and Oona Palmer (LSE). In this post, they explain that given that seven of the ten fastest-growing internet populations are located in Africa, and that it is home to what is the youngest population in the world, the future growth of the global e-commerce market depends upon unlocking the continent’s potential. The British Prime Minister has invited President Ramaphosa of South Africa to join the G7 summit in Cornwall, England in early June. The summit will discuss among other things trade and the digital economy. A number of African states are taking part in the WTO negotiations on digital trade, but South Africa has opposed the whole idea of the current WTO negotiations on the topic. Africa presents both significant opportunities and challenges for those looking to expand e-commerce. Despite changing demographics and improving business environments, which have contributed to rising household consumption, infrastructural and technical constraints continue to undermine efforts to scale e-commerce, and hinder Africa’s integration in the global digital economy. Fewer than a quarter of Africa’s roads are paved according to the World Bank, and even the relatively large markets of Nigeria and Kenya struggle with access to electricity. Moreover, the lack of widespread internet connectivity remains a fundamental barrier to the uptake of e-commerce in Africa, with less than one-third of Africans able to access the Internet. Yet the potential for the widespread adoption of e-commerce to facilitate technological ‘leapfrogging’ has led to...