AFTER an eight-year negotiation period, the Tripartite Free Trade Area (TFTA) was launched on June 10, bringing together 26 African states with the aim of stimulating intra-African trade by creating a common market. These countries make up three major regional communities — the Southern African Development Community, the East African Community and the Common Market for Eastern and Southern Africa. The free trade area is a long-term project with significant stumbling blocks, including ratification by all 26 participating countries and the implementation of the agreement without causing significant economic disruption for weaker economies. However, the principle of promoting intra-African trade is receiving a lot of attention, along with the development of infrastructure that enables such trade. It is 50 years after the end of European rule in most parts of Africa, and more than a third of Africa’s trade remains with western Europe — historical ties still have a large influence on these markets. This is not surprising given shared languages and cultural connections between many countries. Kenya, Sudan, Uganda, Egypt, Lesotho, Botswana, SA, Namibia, Malawi, Zimbabwe, Zambia, Tanzania and Swaziland were all former British colonies and make up half of the countries in the TFTA, with most of the remainder having French, Portuguese or German languages and cultures in common. The continent’s largest economy, Nigeria, is not included in TFTA. Once the agreement is fully implemented, the way in which member states benefit will, in many ways, depend on their economic, political, trade and regulatory realities. It will also...

A fuss-free border can generate more revenues for governments and offer lower prices for consumers than one that is steeped in bureaucracy. It also encourages the movement of people which in turn inspires entrepenuership. The tourism industry can also gain through the concept of a seamless package tour. In the coming months, citizens of the East African Community (EAC) Partner States will see their presidents trooping to their borders to officially open new One Stop Border Posts (OSBP) facilities. In the dark days before economic integration became a clarion call for more regional prosperity, national borders were like fortresses. More so for business people and general traders intent on importing vital production inputs or exploiting new markets for their goods. The costs involved in both importing and exporting were high, because of the wasted time in duplication of effort. OSBPs will change all that, because persons, vehicles and goods make a single stop to exit one country and enter another. Implementation includes simplification of documents and procedures and greater use of ICT. Many online systems are already in place. For road transporters, instead of spending days at the borders, truckers will complete formalities in a single facility and leave in less than a day. Many of these documents will be received and reviewed electronically before the vehicle arrives. If all is in order and no inspection needed, the vehicle could complete formalities in a few hours and not several days as before. If inspection is needed, it will be done...

MOMBASA, Kenya - Shipping giant, Maersk, is pushing for a cloud-based strategy to reduce documentation processes in shipping and enable global trade writes JOSEPH BURITE. “The idea is to use our expertise around processes and systems around the world to help enable trade,” Managing Director for East Africa Steve Felder said in an interview on Monday. “It is to try and push for digitalization of documentation processes in shipping as an enabler to improve efficiency and lead-time. It will ultimately reduce total logistical costs,” he said by phone from Johannesburg. Partnering with Trademark East Africa, the company will work on the pilot project in the region. “If successful, it has potential to be adopted globally,” Fedler said. Transportation accounts for over 40% in cost of doing business in the region, according to the Shipping Council of East Africa. “To ship a container from Kenya to Holland, a mapping process showed - there are more than 30 individual organizations involved and more than 200 communication interactions. We are looking at how we can develop a cloud based solution to greatly improve this process,” Felder said. Source: East African Business Week

Positive developments about Africa these days are often overshadowed by dramatic scenes of terrorism, civil wars, crippling disease outbreaks and power shutdowns. This disjointed view about the African continent is also reflected in the generally negative perception people have on its ports, liner services as well as its road- and rail-related infrastructure. One update posted yesterday on the port overview.com portal serves as a useful indicator of the extremes found in Africa. This single post demonstrates the true growth potential for the continent. It also overshadows current problems, and the high risk involved in investing in the continent. The visiting senior advisor to the Japan International Cooperation Agency reaffirmed its support for Kenya’s future transport infrastructure, including financing for Mombasa’s second terminal, which is at least 65% complete and which will be run by concession to a private operator. Twelve of the world’s leading corporations have submitted a tender proposal. What he did not mention was the paralysis of Mombasa port last week, when terminal operations came to a standstill following two disputes. One was an all-out strike by dockworkers over a massive hike in state health insurance contributions deducted from dockers wages, the other was confusion over a fudged biometric system supposed to simplify the wage distribution process. Twenty eight of the union officials organising the strike were sacked, and a stampede was reported at the port with locals desperate to submit their job applications to replace them. In terms of customs procedures, a longstanding plan to introduce a...

In a Memorandum of Understanding, UNCTAD and TradeMark Africa (TMA) have agreed to strengthen the scope and impact of their activities in East Africa by joining forces on a number of issues. Joakim Reiter, Deputy Secretary-General of UNCTAD and Frank Matsaert, Chief Executive Officer of TradeMark Africa signed a Memorandum of Understanding on 1 July 2015. "With this MoU our two organizations aim at further strengthening collaboration to efficiently deliver targeted assistance to countries and institutions in the region" Joakim Reiter. "We are delighted to enter into a MoU with UNCTAD which provides a platform for cooperation between our two organizations. This will help us work together with our partners in the East African Community in a more coordinated way, implementing issues such as Trade Facilitation and policies on Women in Trade" Frank Matsaert TradeMark Africa (TMA) is a not for profit organization which promotes regional trade and economic integration in East Africa. Collaboration between the two organizations dates back to 2012. This new MoU strengthens the collaboration and lays out a framework for future work in an area of mutual concern: inclusive and sustainable growth and development through economic integration. Specific areas of collaboration: Trade and Gender. Trade Facilitation, including Customs automation and trade portals. Sustainable transport (road, rail and ports) and finance. Joint work foreseen under this MoU: Joint policy-oriented research activities. Joint policy advice at the country-level. Joint in-country projects. By joining forces with TMA, UNCTAD will benefit from TMA's in-depth knowledge of the region and well...

Kenya and Tanzania are planning new measures for handling imported refined fuel to reduce demurrage charges from sea tankers failing to discharge their cargo in time. Tanker owners charge demurrage when vessels ferrying fuel delay in offloading cargo due to lack of storage facilities in Mombasa and Dar es Salaam ports; the cost is passed on to consumers. Kenya has new procedures to improve the turnaround time of offloading petroleum products at the Kipevu Oil Storage Facility in Mombasa; in Tanzania, Tanga port is set to become the second discharge point for fuel. This month, Tanga is expected to handle imported fuel to reduce the pressure on Dar es Salaam port. In Mombasa, firms are allocated ullage (storage space) in the Kenya Pipeline Company (KPC) system on individual throughput volume. Marketing firms in Kenya pay an annual average of $100 million as demurrage. Energy regulators in the two East African countries include demurrage in the cost buildup factors when setting retail prices of fuel. Kenya and Tanzania are competing to increase the share of oil products for delivery to Uganda, Rwanda, Burundi and eastern Democratic Republic of Congo. Tanzania uses roads to transport fuel from Dar es Salaam port to other countries. Kenya supplies about 90 per cent of Uganda’s oil products. Fuel is pumped inland from Mombasa to the Eldoret, Nakuru or Kisumu depots of KPC, before being ferried by road tankers to Kampala and other destinations. Ecobank predicts that the region’s fuel imports could grow by 8 per...

Member states of the East African Community (EAC) appear to be racing against time to meet a self-prescribed deadline of December 2015 by which they pledged to have fully implemented the Common Market Protocol, which came into force on July 1, 2010. The protocol, which was ratified by all five partner states of Burundi, Kenya, Rwanda, Tanzania and Uganda, provides for four freedoms within the region; free movement of goods; labour; services; and capital. While the partners have done well with the other freedoms, there are sticky issues regarding certain provisions of the protocol that have made it hard to implement commitments to free movement of services and their providers; these require amendments. With these gaps still in the protocol, it’s unlikely that member states will meet their December deadline with just five months remaining. The 29th meeting of the Council of Ministers, held in September 2014 in Arusha, Tanzania, directed the EAC Secretariat to engage partner states in consultative dialogues involving various stakeholders to propose the specific amendments required to straighten the protocol. Rwanda held its consultative meeting organised by the Ministry of East African Affairs (MINIEAC) during which they engaged members of the private sector who submitted their views on provisions of the protocol that they want amended or clarified. The Minister for East African Affairs, Amb. Valentine Rugwabiza, told participants in the workshop that Rwanda was committed to work with its counterparts to seek practical solutions to enable easier cross border trade in services and to deepen...

DODOMA, Tanzania (Reuters) - Cargo volumes at Dar es Salaam port are expected to rise as much as 25 percent this year, helped by expanded capacity and improved efficiency, Tanzanian president Jakaya Kikwete said in his last address to parliament before an election in October. The port, whose main rival is bigger but also congested Mombasa in Kenya, acts as a trade gateway for landlocked states such as Zambia, Rwanda, Malawi, Burundi and Uganda, as well as the eastern region of Democratic Republic of the Congo (DRC). "In 2014 the port handled 14.4 tonnes of cargo ... We expect it to reach 18 million tonnes this year," Kikwete said late on Thursday. "The port currently operates 24 hours a day and the speed of unloading and loading cargo has significantly increased ... even those who previously stopped using the port have now returned." Tanzania said it wants to increase capacity to 28 million tonnes a year by 2020. The World Bank said last year that inefficiencies at Dar es Salaam cost Tanzania and its neighbours up to $2.6 billion a year. Tanzania signed a $565 million deal last year with the World Bank and other development partners to expand the Dar es Salaam port, part of plans to boost the east African nation's role as a regional trade hub. Kikwete said plans to build two new berths would double the number of containers handled by the port each year to 1.2 million twenty-foot equivalent units, or TEUs, from the current...

A.P. Moeller-Maersk A/S freight volumes will probably increase by as much as 10 percent in the East African region this year, helped by accelerating economic growth and improved efficiency at major ports. “In East Africa, we are seeing increased political stability, a growing middle class, infrastructure development and oil resources that will drive growth,” Steve Felder, the Danish shipping company’s managing director for the region, said by phone from Johannesburg on Monday. Governments in Kenya and Tanzania have been increasing investment in harbors as cargo volumes grow. Kenya’s Mombasa port, the biggest in the region, competes with Dar es Salaam in neighboring Tanzania. Kenya’s economy is expected to grow by 6.9 percent this year and Tanzania’s 7.2 percent, according to the International Monetary Fund, compared with a sub-Saharan Africa average of 4.5 percent. “We are currently seeing 24 berth moves per hour at the Mombasa container terminal, which has potential to double with on-going investment in hardware, deployment of better I.T. solutions and training,” Felder said. “Productivity in the private terminal at Dar es Salaam has greatly improved over the past year to 33 berth moves per hour.” Maersk, based in Copenhagen, shipped 380,000 20-foot equivalent units in the region last year, about 35 percent of the total market, according to Felder. The company operates the world’s largest shipping container line, and employs almost 10,000 people in more than 40 African nations. Productivity Issues About 65 percent of Maersk freight in East Africa goes through Mombasa, while Dar es Salaam...

Twenty-six African nations have created a free trade zone that spans the eastern half of the continent from Egypt to South Africa in an effort to increase the flow of goods through reduced tariffs and improved infrastructure. According to observers, the new trade bloc is expected to act as a common market with a combined gross domestic product of $1.2 trillion with the potential to generate a 25 percent increase in each individual member country’s trade profile over the coming decade. The agreement includes Egypt and South Africa, among Africa’s wealthiest countries, and some of its poorest including Mozambique and Burundi. The continent’s most powerful economy, Nigeria, located on the continent’s west coast, is not included in the new FTZ. The new bloc replaces the Tripartite Free Trade Area, comprised of the East African Community, the Southern African Development Community and the overlapping Common Market for Eastern and Southern Africa. According to a 2013 United Nations report, a lack of regional integration caused Africa to lag behind Asia and Europe in economic growth. If African governments want to achieve their objective of boosting intra-African trade, the report said, “they have to create more space for the private sector to play an active role in the integration process.” Source: Global Trade