The domino effect of the coronavirus pandemic will plunge many economies into recession and means the African Continental Free Trade Agreement (AfCFTA) is now needed more than ever to ensure that member states are trading with each other and supporting one another at this time, according to Banji Fehintola, senior director and head of treasury at the Africa Finance Corporation (AFC). He says South Africa has a very important part to play. It is the most industrialised and diversified economy on the continent and is one of the only financial markets that is sound enough to be tapped for infrastructure projects. “Trade finance and infrastructure finance are incredibly important in the creation of growth across Africa. However, since the global financial crisis of 2008/2009, some global banks have retreated from emerging markets, including Africa. These means credit capacity from global banks for African Financial Institutions (FI) has reduced considerably, constraining their ability to serve clients’ needs,” he tells Fin24. No amount of policy change or cuts in taxes will truly make Africa competitive when the physical hinderances are ignored, according to Fehintola. He says the AfCFTA is not just a dream, but there is a long way still go before it becomes a tangible reality. The next phase comprises a new set of challenges as the ratifying countries commence implementing the AfCFTA with the goal of truly unlocking Africa’s potential through the free movement of goods, services and people. He points out that the elimination of tariff and nontariff barriers...

The newly launched service will be implemented in partnership with the Tanzania Freight Forwarders Association (TAFFA) and the Federation of East African Freight Forwarders Association (FEAFFA). The solution, which has been rolled out since November 2019 with a major global shipping line looks to expand to cover all carriers using the port of Dar es Salaam. Firm’s managing director, John Mathenge said: “We provide a business-friendly alternative to container deposit which is accessible to customs agents, freight forwarders and shippers”. The solution, according to Mathenge entails the issuance of guarantee by Viaservice upon payment of a service fee to authorized customs agents, freight forwarders and shippers, waiving the need for container deposit. He said company has explored a sustainable solution that addresses the concerns of both, carriers and container users. He said the service is heralded as a sustainable solution that protects the interest of all stakeholders. “You no longer need to put up hefty cash deposits to secure release of local or transit containers. Yet the shipping lines are guaranteed of prompt settlement of all dues related to delay in return, damage, and total loss of containers”, he said, adding Viaservice will in turn recover advances made to shipping line from subscribers. Elisha Tengeni, Viaservice Commercial Manager said: “We are confident that the solution will sustainably improve users’ cash flow, boost their competitiveness, improve their relationship with shipping lines, and enhance their respective administrative and operational efficiencies”. He said during this time when the transport logistics industry is impacted...

THE recent 25 per cent duty introduced on imported glass by Kenya contravenes the provisions of the Treaty and the Customs Union Protocol of East African Community, Tanzanian glass manufacturer has claimed. The Kenyan government introduced the duty on im- ported glasses through the Business Law (Amendment) Act, 2 02 0, citing it was away for the government protecting the local industry. In a statement issued yes- terday in Dar es Salaam, the local glass container manufacturer, KIOO Limited expressed its concern over 2 5 percent exercise duty introduced by the East African nation, saying it was unfriendly for regional business growth. In its statement availed to this paper yesterday, Kioo Limited which is a proud Tanzanian manufacturing success story, said they are addressing this issue with the relevant ministries in Tanzania and also approaching the East African Court Justice to intervene in this matter urgently. Kenya recently enacted the Business Laws (Amend- ment) Act, 2 02 0 which amended the Excise Duty Act, 2 015 (Excise duty Act) by imposing excise duty on imported glass bottles (excluding glass bottles for packaging pharmaceutical products) at a rate of 2 5 per cent with effect from 18 th March 2020. Under the Excise Duty Act, there are no exemptions granted to goods imported into Kenya from East African Community Partner States and the new excise duty rate of 2 5 per cent will therefore apply to glass bottles import- ed in to Kenya from Tanzania. In its statement, Kioo Limited said...

The closure of the border between Tanzania and Kenya hit Dar’s horticulture sector due to long delays at the crossing for fresh produce truckers, risking a disruption of the supply chain. Horticulture is one of Tanzania’s economic pillars. This past week, Tanzania Horticulture Association (Taha) Chief Executive Jacqueline Mkindi asked the governments of Tanzania and Kenya to resolve the border issue for the sake of the already struggling exports industry. Most of Tanzania’s horticulture produce is exported through Kenya's Jomo Kenyatta International Airport (JKIA). “If this tug of war continues, we’ll be the first to suffer as we still rely on JKIA and the port in Mombasa to export crops whose routes are not open from Tanzania,” Dr Mkindi said. “Our government has all along been considerate to horticulture. We advise it to embark on economic negotiations with Kenya to allow cargo to continue crossing borders smoothly.” CO-OPERATION “We’re ready to co-operate with the governments to ensure operations go smoothly at border points in the wake of the pandemic,” she added. After the halt of international aviation, the Taha signed a deal with Ethiopian Airlines. Despite the deal with Ethiopian Airlines to ferry fresh vegetables, fruits, herbs and flowers to global markets from Kilimanjaro International Airport, the airline has still not been granted long-term landing permits. “Unless the government resolves the hiccups, the future of the deal with the Ethiopian Airlines is hanging in the balance,” said Dr Mkindi, as she asked the government to consider issuing between three to...

The Economic Commission for Africa (ECA), the African Development Bank (AfDB) and the African Union Commission (AUC) launched the second Africa Regional Integration Index (ARII 2019). The Index includes a call to action to African economies to deepen their integration. The Africa Regional Integration Index 2019, which builds on the first edition published in 2016, provides up-to-date data on the status and progress of regional integration in Africa. It also helps to assess the level of integration for every Regional Economic Community (REC) and their member countries. The report observed that although 20 countries score above average, no African country can be considered well integrated into its region. Even the most integrated country, South Africa, scores 0.625 out of 1, less than two-thirds of its potential on the scale. The report found that much more needs to be done to integrate regional economies to make them more resilient to shocks such as the current COVID-19 pandemic. Overall, the Index shows that levels of integration on the continent are relatively low with an average score of 0.327 out of 1. “Whereas the Index edition we are releasing today has data cut off points in 2019, the present COVID-19 pandemic has reopened the question of whether enough is being done in advancing regional integration as a means to help Africa withstand systematic shocks such as the one being experienced today,” said Stephen Karingi, Regional Integration Division Director at the ECA. “This index is both a measurement exercise and a call to action;...

DAR ES SALAAM, May 27 (Xinhua) -- The Southern African Development Community (SADC) senior officials on Wednesday urged members of the regional bloc to remove trade barriers to boost economy in the region. Wilbert Ibuge, Tanzania's Permanent Secretary in the Ministry of Foreign Affairs and East African Cooperation, said the appeal to remove trade barriers among SADC members was made by SADC Council of Ministers permanent secretaries at the start of their three-day video conference meeting. Ibuge, who chaired the meeting, told a news conference in the business capital Dar es Salaam that the officials agreed that SADC member states should open their borders wide to ease trade amongst them with a combined population of about 345 million. "The permanent secretaries from the SADC felt that it was high time the member states enhanced their trade cooperation in order to improve economic and trade growth in the region," said Ibuge. He said the three-day meeting that ends on Friday will, among others, review the implementation of SADC's theme for 2019/2020 "A Conducive Environment for Inclusive and Sustainable Industrial Development, Increased Intra-Regional Trade and Job Creation". Tanzania is the current chair of the SADC, an inter-governmental organization established in 1992 to further socio-economic cooperation and integration as well as political and security cooperation among 16 southern African countries. Enditem Source: Xihuanet

Are we now in a “new Cold War,” as headlines in recent months suggest? As the covid-19 pandemic rages on, relations between the United States and China have reached new lows, and President Trump threatened to “cut off the whole relationship.” This leaves economists and policymakers considering a question that once seemed unthinkable: What would happen to global supply chains if this decoupling should occur? Which countries can step into the vacuum created by this superpower conflict? Our recent study gives some answers. We show the building blocks are already emerging for a new international trade order — with a rapidly increasing number of poorer countries navigating this system. This has happened largely without the direction of global superpowers like the United States and China. Here is what you need to know. The ‘China shock’ has hit poor countries Like the United States, many poor countries have struggled with the economic and political effects of a “China shock” since the 1990s. As China’s export dominance in manufactured goods satisfied much of the demand from wealthier nations, developing countries saw a sharp decline in trade with the global north, as the figure below indicates. These countries have also been shut out of lucrative trade agreements with Europe and the United States, which concentrated primarily on deals with the larger “BRICS” (Brazil, Russia, India, China, South Africa). 5 ways the coronavirus is making the world’s most vulnerable a lot more vulnerable Our study explores what this shock has meant for poor countries...

Economies in sub-Saharan Africa (SSA) continued to improve business climates with best performance seen in the area of getting credit. Some 25 per cent of the reforms recorded by Doing Business 2020 were in the economies of SSA. Economies of the region enacted 73 reforms in the 12 months leading to May 1, 2020. Mauritius (13), ranked the highest in the region overall, followed by Rwanda (38) and Kenya (56). Compared with the previous year, SSA economies increased their average doing-business score by 0.9 points. Notably, most reforms in the region were in the areas of starting a business, dealing with construction permits and getting credit. Be that as it may, despite the advancements, there's still a long road ahead. Seventeen economies had no reforms in the 12 months through May 2019; three economies (Eritrea, Somalia, South Sudan) have never implemented any reforms in the past five years and two (Somali and South Sudan) have never implemented reforms in the areas. Regional score at 51.8 (out of 100) is way below OECD high-income average of 78.4 and the global average of 63. Only two SSA economies rank in the top 50 on the ease-of-doing-business rankings while most of the bottom 20 economies in the global rankings are from the region. Within the context of the much-hyped African Continental Free Trade Area (AfCFTA), one indicator — trading across borders — shows the region lagging. For instance, time to clear exporting goods at the border takes 97 hours compared to eight and...

Notwithstanding calls for the implementation of a continental trade deal, the latest Africa Regional Integration Index (ARII 2019) has shown that regional integration remains very poor and vital to building resilient economies that will survive the effect of the pandemic. According to the report, much more needs to be done to integrate regional economies to make them more resilient to shocks such as the current COVID-19 pandemic. Overall, the Index shows that levels of integration on the continent are relatively low with an average score of 0.327 out of 1. The second Africa Regional Integration Index (ARII 2019) was unveiled recently by the Economic Commission for Africa (ECA), the African Development Bank and the African Union Commission (AUC), with a call to action to African economies to deepen their integration. The 2019 Index, which builds on the first edition published in 2016, provides up-to-date data on the status and progress of regional integration in Africa. It also helps to assess the level of integration for every Regional Economic Community (REC) and their member countries. The report observed that although 20 countries score above average, no African country can be considered well integrated into its region. Even the most integrated country, South Africa, scores 0.625 less than two-thirds of its potential on the scale. For Nigeria and other African countries to succeed in its long-standing efforts towards closer economic integration, ARII 2019 recommended that countries improve regional networks of production and trade by enhancing countries’ productive, distributive, and marketing capacities; build...

Poultry farmers in Kenya want the Ministry of Trade to intervene on the discriminative tariff by the Uganda on chicken meat. Uganda Revenue Authority has in the past two years charged Kenyan chicken meat exports a cumulative 25 per cent in taxes – 18 per cent VAT, one per cent Railway Development Levy and six per cent Withholding Tax. “We want the government to review the taxes charged by our neighbors, both Uganda and Tanzania,'' Kenya Poultry Farmers president Monica Wanjiru said. She added that their plea is to the government to impose tax Uganda poultry imports or for the Ugandan government to waive 19 per cent tax on VAT and Railway Development Levy. The taxes charged by the Uganda, Wanjiru argued, violates World Trade Organization first principle on fair trade. This means that the Uganda poultry products have free access to the Kenyan market while the Kenyan products are hindered from access to Uganda through Non-Tariff Barriers (NTBs) or imposition of domestic taxes (VAT, withholding taxes or railway levies). Wanjiru added that “Tanzania has also imposed stringent requirements for compliance from the Tanzania Bureau of Standards (TBS) which many players in the poultry sector have seen as deliberate efforts to bar them from accessing the market." In 2016,Tanzania banned the importation of poultry and poultry products into the country. “We, therefore, cannot overemphasize the vulnerability of the Kenyan poultry industry from the regional attack,"Wanjiru said. According to the lobby, the most recent impact of such actions by Tanzania culminated...