The launch of the Tripartite Free Trade Area (TFTA) by 26 African countries at the beginning of June brings together the Common Market for Eastern and Southern Africa (COMESA), the Southern African Development Community (SADC) and the East African Community (EAC) and is in line with the long-standing vision of creating an African Economic Union. It is expected that the TFTA will be a building block towards establishing the Continental Free Trade Area by 2017. The TFTA represents a consumer market of about 600 million people and about 58 percent of the continent’s Gross Domestic Product, estimated at US$1.3 trillion. However, Minister of Industrialisation, Trade and SME Development, Immanuel Ngatjizeko, yesterday warned that Namibia needs to increase its industrial capacity to take advantage of the opportunities provided by the TFTA. “Namibia in particular places industrialisation at the centre of its development strategy, hence the need to expand our industrial base is more important now than ever,” said Ngatjizeko during a public seminar on regional and continental economic integration arrangements. He added that his ministry is ready to work with the private sector and Small and Medium Enterprises (SMEs) to ensure that the country’s industrial strategy yields results. Ngatjizeko added that policymakers have realised that market liberalisation alone without industrialisation and infrastructure development does not serve the economic purpose, especially in countries like Namibia whose industrial capacity is constrained and not as competitive as other countries. He said for this reason the TFTA emphasises industrialisation and infrastructure development as strategic pillars...

Barack Obama has called for an increase in intra-African trade alongside a renewed economic engagement with the United States, arguing that countries on the continent can do much more to build links with neighbouring states. "The biggest markets for your goods are often right next door. You don't have to just look overseas for growth, you can look internally... it shouldn't be harder for African countries to trade with each other than it is for you to trade with Europe and America," he said. Obama was delivering a keynote speech to the African Union in Addis Ababa, the first sitting US president to address the body since its foundation in 2001. The speech capped off a five-day trip to Kenya and Ethiopia. According to UN figures, the share of intra-African trade in Africa's total trade over the past decade was only about 11 per cent, compared to 70 per cent for Europe. In response, Obama said that the US would step up efforts to encourage regional integration, building on previous US assistance in modernizing customs and border crossings in the East African Community. The president also highlighted US efforts in battling corruption, tackling illicit capital flows and building power capacity on the continent. Obama praised African countries that have torn down barriers to investment, but argued that much more needs to be done to spark business growth on the continent. "In many places in Africa, it's still too hard to start a venture, still too hard to build a business,"...

A new bill against non-tariff barriers that is awaiting assent by the heads of state of East Africa will add legal strength to the push against trade barriers in the region. A new bill against non-tariff barriers that is awaiting assent by the heads of state of East Africa will add legal strength to the push against trade barriers in the region. According to Jim Kabeho a board member of the East African Business Council, the war against the non tariff barriers has always been left to consensus as opposed to strong legal support. Source: NTV

The Tanzania Revenue Authority (TRA) has embarked on a programme to train clearing and forwarding agents on the Single Custom Territory (SCT) of the East African Community (EAC). The Arusha TRA regional manager, Aminiel Malisa, said the agents would be trained on skills that would help them know how they can operate under the new SCT arrangement. He said this would increase their efficiency, boost both government and clearing agents’ revenues as well as ease their tasks. As an example, Malisa said, a clearing agent based at Tunduma’s Tanzania-Zambia border could clear cargo or transport that of his/her customer through Mombasa Port, while he/she is at the Tunduma border, explaining: “Right now documents of releasing/receiving cargo will be processed once at the country’s entry point and its destination; only being required to get the exit note." “We will not work on other papers as everything will be seen from online systems of responsible revenue authorities,” he said. The training facilitator, Isaac Marandu, said in an effort to ease the clearing agents’ work they will be given a password for accessing the system. This would assist them to process cargo and settle payments using an online system known as Tanzania Customs Integrated System (TANCIS). Marandu said the SCT would provide room for EAC clearing agents to easily access the system as they would be given a password. “This system will reduce the long process as goods destined for another member state would be cleared at the point of entry in another...

The 172-kilometre Ahero- Isebania highway is set for an upgrade, complete with new service roads at commercial centres along the corridor to help boost trade with Tanzania. The project traversing four counties - Migori, Kisii, Homa Bay and Kisumu- is expected to improve trade in the Lake Victoria basin. The African Development Bank (AfDB) and the government will fund the project, which is a major boost to traders in Kenya and Tanzania who have been struggling with the narrow and worn road. “The rehabilitation of the Isebania-Kisii-Ahero section of the Tanzania-Kenya-South Sudan Corridor will facilitate cross border movement of passengers and freight, and further enhance access to regional markets,” says the environmental and social study report. “The project road condition has deteriorated over the years due to increasing transit traffic on the road. Currently, the road carriageway width measures 4-5m wide, and increasingly is becoming a major constraint for the main economic activities within the Lake Victoria basin.” The report adds that traffic accidents have increased due to the narrow and heavily potholed road condition. Besides the improvement of the main road, the project will also entail upgrading 75km of feeder roads that connect to the highway. These include the Oyugis-Kendu Bay road (19.5km), Nyachenge-Tabaka-Ogembo road (15km), Sondu-Nyabondo road (6km), Oyugis-Gamba road (7km), Suneka-Rangwe road (18km), and Misambi-Ekerenyo road (11km). “The population of Lake Victoria Basin is over four million and up to two million people are directly served by the Isebania-Kisii-Ahero road and the associated feeder roads for their...

Director General of the Standards Organisation of Nigeria Joseph Odumodu, discuses how the Africa Standards Organisation under his leadership, is enhancing trade on the continent, he spoke with Crusoe Osagie. Excerpts: As President of ARSO, what stage are you now in terms of harmonisation of standards across the region and the enhancement of intra-African trade? I will like to do some introductions. In 1991 I think, there was what they call the Abuja treaty and it was in that treaty ‎that African countries talked about the creation of Africa economic community. I do recall again that in that treaty, they identified the importance of quality infrastructure in the development of the African continent and there were other issues that they highlighted at that time, pointing out that African countries were not trading with each other enough but trading with other economic communities. What was also identified as a major constraint was the fact that we were already used to the quality of products coming from other continents but apparently, we do not trust each other about the quality of products we were circulating amongst ourselves. ARSO was actually formed about 50 years ago by the Organisation of African Unity (OAU), but I must say that not much was done after the formation of ARSO in terms of using it as a vehicle for creating economic development for Africa. Just as in the case of Nigeria, nobody thought of how we can use standards to develop our economy. Today, at least...

A renewed sense of urgency to get things done characterised last Friday's inter-state council meeting of ministers from Rwanda, Burundi, Uganda, Tanzania and DR Congo as they discussed how to make the central corridor, East Africa's hotbed for trade. The meeting, held in the serenity of the Lake Kivu Serena Hotel in Rubavu District, saw ministers approving more than 20 ambitious projects to be jointly implemented by the Central Corridor partners. Perhaps the most exciting of the projects is the proposed multi-billion dollar standard gauge railway connecting Rwanda, Uganda, Burundi and DR Congo to Dar es Salaam port whose construction is to be launched in August 30. Also, this month, Dar es Salaam port will open offices in Rwanda, Burundi and Uganda. Initially to be housed at the Tanzanian embassies in the respective countries, the move is aimed at getting the port closer to traders, said Dr Shaaban Mwinjaka, the permanent secretary in Tanzania's transport ministry. With Kenya ports authority already running an office in Kigali, renewed efforts to improve trade facilitation on the Northern and Central Corridors is gradually giving way to healthy competition between East Africa's two ports of Mombasa and Dar es Salaam. That competition, according to analysts, will boost regional trade and ease transportation costs and lead to a positive effect on the final prices of goods and services. A good example is the recent launch of block trains bound for Uganda and Rwanda via Isaka-Mwanza and to Burundi and DR Congo via Kigoma, seen as...

The tax bodies of the region have rolled out a scheme to consolidate gains from local Customs incentives in order to increase import revenues and minimise trade bottlenecks faced by business people while clearing goods. The Authorised Economic Operator (AEO) scheme allows accredited firms to enjoy shorter turnaround times for clearing goods at border points across the region and faster verification checks, according to officials. Local AEO schemes offer faster Customs clearing procedures to gazetted firms within national borders. Leveraging efficiency gains By leveraging the efficiency gains generated by the Single Customs Territory arrangement rolled out in February 2013, regional AEO firms could register Customs turnaround times of one day on certain trade routes compared with the current three-and-a-half days, sources said. Richard Kamajugo, a trade and Customs expert based at Trademark East Africa said: “For example, cargo consignments between Kampala and Katuna border station will take less than a day for beneficiaries.” Over the medium term, businesses should post higher profits due to the cost-saving thus effected. The AEO model is the brainchild of the World Customs Organisation, which offers incentives to importers and exporters for the purpose of improving tax compliance, increasing revenues from Customs transactions and boosting efficiency levels among beneficiary companies. After nearly three years of preparation, 13 pioneer firms were awarded regional AEO status last month, with revenue officials citing delays in resolving tax-related queries concerning selected businesses as a major challenge during the vetting process. Eligible firms were selected from the pool of existing...

Central Corridor member states are finding it difficult to attract private investors to finance prioritised infrastructure projects because of the huge financial outlay and the delayed return on investment involved. This puts the governments under pressure to either finance the projects from their budgets, or mobilise donors to fund the activities. These financing issues were raised last week during the 4th Central Corridor Transit Transport Facilitation Agency (CCTTFA) regional task force meeting to review the Presidential Round Table (PRT) resolutions and finalisation of an implementation plan. “What private investors want is to put money in projects that make quick returns, but projects like railways are long term and this is partly why the private sector is shunning these projects,” said George Rukara, Assistant Commissioner of Water and Rail Transport Regulation in Uganda’s Ministry of Works and Transport. The five Central Corridor member states are Rwanda, Uganda, Tanzania, Burundi and the Democratic Republic of Congo. Unlike Tanzania, the other Central Corridor members are landlocked and any efforts to access to the sea would facilitate trade. Drawing funds from their coffers would strain regional governments given that some have a tight budget for domestic expenditure and the Central Corridor projects have not been included in this year’s fiscal budget. Member states have the huge task of securing funds to finance more than 10 new joint development projects that have been prioritised and will be jointly owned and funded. The projects are to enhance intra-regional trade by lowering the cost of doing business...

Policies to Maximize the Gains of Trade Opportunities for the Poor, and Minimize the Risk This important report reviewed here was prepared by the World Bank which we hope will receive the due consideration it deserves considerable attention and study in the formulation of new development strategies in the future. Further progress in the Doha negotiations, and in particular achieving a substantive outcome on agriculture, is necessary to increase the effectiveness of trade in reducing poverty. The agriculture sector, which employs most of the poor, will continue to play a key role in lifting people out of poverty. Its role could be strengthened if more was done to remove remaining obstacles to agricultural exports. Tariffs and subsidies are particularly high in the agricultural sector and anti-competitive behaviour in some segments of the supply chain can make it particularly hard for the poor to benefit from trade participation. The increasing importance of supply chains in production has highlighted the linkages between the agriculture sector on one side and the services and manufacturing sectors on the other, showing that progress in removing obstacles to trade ideally should occur simultaneously across all sectors. In the long run, the capacity to leverage agriculture for reducing poverty will depend on achieving continuous improvements in productivity, reducing the costs to trade in agricultural goods, reducing tariffs on imports and key intermediates such as fertilizers and agricultural machinery, and improving access to a range of services that are key inputs in the production chain. The capacity to...