In June 2014, Africa—the most fragmented Continent in the world—took a decisive step towards regional economic integration with the signing, in Charm El Sheikh, of a free trade agreement that opened the way for a vast common market uniting twenty-six countries from Cairo to Cape Town. This new Tripartite Free Trade Area (TFTA), which took five years of negotiations, is the result of a merger of three regional organizations: the Southern African Developmental Community (SADC), the East African Community (EAC), and the Common Market for Easter and Southern Africa (COMESA). The Tripartite, which includes nearly half of the Continent’s countries and population, constitutes the largest area of free trade ever established in Africa. While the agreement’s major promoters—South Africa, Egypt, Ethiopia, Mauritius—unanimously welcomed the trade negotiations’ successful conclusion, the signing of this agreement does, however, raise questions about the global dynamics of regional integration in Africa. Implicitly, the Tripartite profoundly underscores the deep fracture lines that cross the Continent. Indeed, the creation of a large English-speaking Eastern economic block made some observers fear the resurgence of  “block logic” almost thirty years after the end of the Cold War. Facing off against the Atlantic facade and Francophone Africa—which still suffers from chronic fragmentation—the new integrated economic area may generate a two-speed African economy, with all potential tensions that it carries. In the East, people and goods would circulate freely and smoothly. In the Western part, since barriers fell only gradually, talent and capital would flee towards the Tripartite.  Thus, the danger...

Business leaders from around the world gathered in Cape Town last week at the World Economic Forum (WEF) on Africa under the theme, Then and Now: Reimagining Africa's Future. According to Charles Brewer, Managing Director of DHL Express Sub-Saharan Africa, the forum’s theme could not be more fitting given the rise of Africa over the last few decades. Whilst participating in various panel discussions at the conference, Brewer said that despite Africa being one of the last frontiers for economic growth and development, leaders need to urgently determine the best approach for the continent going forward and work hard to implement it. To ensure that Africa is equipped to maintain and exceed its current growth trajectory, business leaders, government and the community need to work together towards making Africa easier to do business with. He says that a strong growth engine for the continent is the rise in small and medium enterprises (SMEs.) “The region offers plenty of untapped opportunities, which pave the way for SMEs to fill the gaps not presently being catered for by larger corporations. Manufacturing, on a large scale, is still somewhat embryonic in Africa and as such, there is a definite opportunity for SMEs that operate in the manufacturing industry.” Having set up in Africa in 1978, DHL is today present in every African country and territory and the company is very familiar with the continent’s unique challenges and characteristics. Brewer says that the biggest game changer for Africa going forward will be its ability...

DAR ES SALAAM port’s annual cargo traffic growth now stands at 14, the Acting Director General of the Tanzania Ports Authority, Mr Awadhi Massawe, says. He told editors of Tanzania media houses on a familiarisation tour of the Dar es Salaam Port that major infrastructural improvement and good working relations with port users were behind steady cargo traffic growth at the port. “The traffic growth is steady and encouraging,” he told the editors, adding: “all of these can be translated into two cardinal service delivery tenets: good working relations and understanding what the stakeholders want.” Mr Massawe said major reforms and infrastructural development projects that have been executed in recent years sought to enhance the port’s performance, telling editors that 40 per cent of the government revenue comes from ports. It was only pertinent and rational that editors and port authorities work together to ensure ports work efficiently for the good of the nation, the acting director general said appealing to editors: “let’s work together to ensure ports have a good image and perform well so that they generate requisite revenue for the welfare of Tanzanians.” On behalf of the editors the chairman of Tanzania Editors’ Forum (TEF), Mr Absalom Kibanda who is also the Chief Managing Editor of New Habari Corporation, appreciated reforms and improvements at the port. He also said TPA and the government should focus on improving railway transport because, it was the cheapest and probably the quickest haulage system if it worked well. “With efficient TRL...

Somalilandsun - Despite the major distraction of Sudanese President Omar al-Bashir's visit, African Union (AU) leaders took important decisions at their summit which ended on Monday, including a big one towards financial independence They also adopted the first ten-year plan to implement the ambitious Agenda 2063 initiative to uplift the continent, and launched negotiations for a Continental Free Trade Agreement, which would liberate trade across all of Africa. And they took steps to try to bring peace to various persistent conflicts on the continent and to combat growing terrorism, from Boko Haram in West Africa, through Al Qaeda in the Sahel via Islamic State in Libya to Al-Shabaab in the east. South African officials have hailed in particular the agreement to scale up financial contributions from member states, so that the AU can fund 100% of its operations, 75% of its programmes and 25% of its peace and security activities. The aim is to make the AU more independent of foreign donors who still provide about 60% of the overall budget. To help them meet their greater obligations, the AU has proposed a basket of alternative sources of funding to its members, including levies and taxes on air fares, smses, oil and other natural resources. But however they pay, the members will have to pay more, also because of the added costs of big AU initiatives like Agenda 2063. Their contributions will be based roughly on the size of their economies. So South Africa will be in the top tier...

Promoting intra-regional trade has long been a priority item for African policymakers.  Over time, regional integration arrangements have proliferated all over the continent, often creating a confusing mixture of overlapping, sometimes incompatible, preferential trade regimes.  The Tripartite Free Trade Area (TFTA), which was officially launched on June 10, goes some way towards addressing these issues by bringing together three of Africa’s major regional economic communities—the Southern African Development Community (SADC), the East African Community (EAC), and the Common Market for Eastern and Southern Africa (COMESA). Over the last few decades, several initiatives to boost intra-regional trade have been undertaken by the three regional economic communities that are now coalescing to form the TFTA. While it is difficult to determine actual impact of those trade expansion efforts on regional trade flows, available data show that merchandise exports among the members of this new FTA have steadily increased from $2.3 billion to $36 billion between 1994 and 2014—more than a 12-fold increase over 20 years. Over that period, the share of intra-regional trade in total exports increased from 7 percent to 25 percent.  While these shares are low compared to European (70 percent) or Asian (50 percent) standards, the trend clearly suggests that trade among the Tripartite members grew faster than their trade with the rest of the world. Regional officials believe that the TFTA could accelerate this trend by further stimulating intra-regional trade. The launch of the TFTA has not received as much media coverage as the ongoing negotiations of the...

At the Chilly Willy factory in Dubai, the lorries roll in with giant drums of raw tomato paste from China and roll out with tiny sachets of the processed product bound for Africa. “It’s a 24-hour operation,” says director Iain Cusick as workers pack boxes destined for shops and restaurants from Mozambique to Somalia. Business is booming. The rise of the African consumer is encouraging companies across the UAE to look west, from the factories and warehouses of Jebel Ali Port and Dragon Mart to the banks and fund managers of Dubai’s financial heartland. The race is on to become Africa’s staging post. “The fact is that over the next 10 to 15 years, the growth prospects on the African continent are the best in the world,” says Rudi Lohmeyer, a director of the Global Business Policy Council at AT Kearney, the management consultancy. • Take a look inside the Chilly Willy factory in Dubai Yet it also remains the least integrated region in terms of cross-border trade, which is where Dubai and other potential entrepôts to the continent’s $3 trillion economy see an opening. The tomato paste business of the catchily named Chilly Willy is a case study of the logistical challenges Africa faces. With 60 per cent of the world’s uncultivated arable land, the continent has plenty of space to grow and process tomatoes of its own. But moving them across poor roads and closed borders is where African trade starts to wither on the vine. It is...

TANZANIA has introduced a 1.5% infrastructure development levy on imports to assist the government with raising $US 14.2bn to finance new rail projects and improve existing lines over the next five years. Finance minister Ms Saada Mkuya Salum said a similar levy was introduced in the other East Africa Community (EAC) countries, Kenya, Rwanda and Uganda, in 2014. The new levy is pegged on the cost, insurance and transport of imported goods. Tanzania has already approved for development three standard gauge railway projects including the 2561km line linking the capital Dar es Salaam with neighbouring Rwanda and Burundi at a cost of $US 7.6bn and a 1000km line linking the iron and coal mines in southern Tanzania to the port of Mtwara at an estimated cost of $US 1.4bn. Tanzania has selected global financial group Rothschild as the project's financial advisor. Source: IRJ

African leaders have agreed to create the largest free-trade zone ever attempted on the continent, and the world’s second largest. The Tripartite Free Trade Area (TFTA) deal, signed in Egypt, will ease the movement of goods across 26 member countries comprising three current trade blocs: The Southern African Development Community (SADC); the East African Community (EAC) and the Common Market for Eastern and Southern Africa (Comesa). It has also been dubbed the “Cape to Cairo” super bloc. Analysts forecast intra-Africa trade will more than double to 30 per cent, and one report said it could stimulate at least $1 trillion’s worth of economic activity in the bloc. Now, each national parliament will have to vote for it, and it will also be presented to the continent’s big chiefs at the African Union this weekend in South Africa. And several African cynics and pragmatists immediately said that, with that, the project had been handed over to the burial committee. Good reason Going by the past, there is good reason not to be optimistic that TFTA will become reality on the ground. Perhaps it is a good time to go ask why economic integration has been so troubled in Africa. Some years ago, when Rwanda’s President Paul Kagame was still vice-president, and Rwanda was still in the very early stages of exploring entry into the EAC, I raised this question with him in an interview. His answer surprised me. He said the biggest stumbling block to economic integration was Customs taxes. African...

The Holili/Taveta One Stop Border Post between Kenya and Tanzania is now operational. Long trips due to waiting times at borders, red tape and crowding will now be a thing of the past for passengers and vehicles between Kenya and Tanzania using the new Holili-Taveta border crossing facilities. According to the senior director One Stop Border post/Integrated Border Management at TradeMark Africa (TMA) Mr Theo Lyimo, OSBP’s will create new possibilities for economic growth and people enhanced mobility across borders. Source: Daily Nation

Mobile money transfer tariffs within East Africa Community member States could become uniform, if proposed regulations are passed into law. Fred Matiang’i, the ICT secretary, says the plan is part of a wider strategy by Uganda and Rwanda to also harmonise data and SMS tariffs. The proposal to have the mobile money and SMS charges harmonised were arrived at during the East Africa ICT ministers’ meeting held in Kampala on June 5. “We are working on a proposal to have tariffs of SMS and those of mobile money transfer be harmonised within the region. Each of the East Africa member State will have to put a proposal to their respective Treasury and get their advice because it will have a revenue implication on the governments,” Dr Matiang’i told Business Daily in an interview. He added that the mobile operators will have to negotiate and agree on inter-operator rate, which will then be presented to their respective ICT ministries before tabled to the East Africa ICT ministers for discussion in the next Northern Corridor summit. “The consultation with the private sector is necessary since we understand that they are also in business, however, we would also want to see that our people are not overcharged.” The Kampala meeting follows a communication from the Communication Authority of Kenya (CA), to Safaricom, Airtel and Telkom Kenya’s Orange, seeking their views on the application of a harmonised data roaming charges within Kenya, Rwanda, Uganda and South Sudan. The move by the CA, follows a...