Africa’s biggest trading blocs are next month set to sanction the creation of a grand free trade area while still seeking consensus on tariff liberation and rules of origin of manufactured products. The Common Market for Eastern and Southern Africa (Comesa) has been negotiating for agreeable tariff offers and the criteria for determining the national sources of products with its counterparts—Southern African Development Community (Sadc) and the East African Community (EAC). But the indecisiveness of some member states and trading blocs to table their own tariff proposals has delayed the launch of the Tripartite Free Trade Area (TFTA). The negotiations for the single market were launched in Johannesburg in 2011. “These issues will be renegotiated after the approval of the draft agreement establishing the Tripartite Free Trade Area among the Comesa, Sadc and EAC trading blocs,” Mark Ogot, a senior assistant director in charge of economic affairs at Kenya’s Ministry of East African Affairs, Commerce and Tourism told The EastAfrican, noting that only 40 per cent of the issues to do with rules of origin have been completed. “They have agreed on the way forward although there is still some work to be done. Rules of origin and tariff offers are the outstanding issues.” According to draft documents, the tripartite member states are expected to simplify and harmonise their trade and Customs documentation and procedures for trade in goods among themselves. The member states are not supposed to impose quantitative restrictions on imports or exports in trade with each other...

The East African Community states are among countries that will benefit from low cereal prices expected to prevail this year, following the record-breaking output in Europe and Asia last year. The world cereal output is forecast at 2,509 million tonnes (including rice in milled equivalent), which is 39 million tonnes lower than in 2014 but still nearly 5 per cent above the average of the past five years. According to the Food and Agriculture Organisation (FAO), exporting nations are still holding abundant stocks of cereals, hence an increase in prices will be unlikely. “The world food import bill is forecast to reach a five-year low in 2015, mainly driven by a decline in international prices, low freight rates and a strong US dollar,” said FAO in its latest global food outlook. The situation will benefit low-income countries that continue to spend millions of dollars importing cereals. As a result, these countries are expected to save on foreign exchange this year. The EAC member states do not produce enough wheat, rice and maize for their 134.5 million citizens. Although Uganda and Tanzania have increased their maize production, supply still remains erratic and heavily dependent on rainfall performance. Prices are expected to remain low despite a slight decline in global grain production this year compared with last year, as abundant stocks held by exporting countries and some importing nations are expected to offset any pressure from the demand side. “Worldwide cereal production will likely decline by 1.5 per cent from last year’s...

The cost of imports looks set to rise with the planned introduction of a one-per cent levy on goods coming outside the East Africa Community to fund the regional bloc’s budget. In the budget speech made to the East African Legislative Assembly last week, the levy was the only highlighted option among various choices for funding the regional budget. Currently, the budget is mainly funded by donors. This is the second time that the levy is being floated after it was rejected last year on grounds that it would sharply increase the cost of goods and doing business. “The ministers of finance received the proposals including a one per cent levy on imports from outside the EAC region,” said Harrison Mwakyembe, chairperson of the EAC Council of Ministers. “They will consider the comments submitted by partner states, finalise the proposal and recommend a sustainable financing mechanism for the community council and summit for consideration and approval during the financial year under review.” Kenya imported goods worth Sh1.6 trillion last year, meaning the levy would net the regional bloc Sh16 billion. Other EAC member states are Tanzania, Uganda, Rwanda and Burundi. The proposed levy is modelled on Kenya’s railway levy that charges 1.5 per cent on imported goods. Proceeds help to build the new Mombasa-Nairobi railway line. The EAC levy sets the stage for price increases, including fuel, food, cars and second-hand clothes, with the potential effect of eroding the purchasing power of most households. It would also see a dramatic...

Egypt will sign a free trade agreement with Africa’s three biggest economic blocs on June 10, a senior official said Sunday. Industry and Trade Minister, Mounir Fakhri Abdel-Nour, added that the signing of the agreement would take place in the resort city of Sharm el-Sheikh. He noted that the agreements would be signed with the Southern African Development Community, the East African Community and the Common Market for Eastern and Southern Africa. He added that delegations from 26 African states would attend the event in the Egyptian resort city. Abdel-Nour said the agreements would be beneficial for Egypt, on one hand, and member states in the three blocs, on the other. He said the agreement would open the door for the creation of a free trade zone in the future. “This will pave the road for the removal of import tariffs and the elimination of non-tariff barriers along with any fees that negatively impact the flow of trade,” Abdel-Nour said in a statement. He added that the deal would also lead to the removal of quantitative restrictions on imports and exports, the introduction of measures to facilitate cooperation between customs authorities, and the adoption of anti-dumping measures and countervailing duties. The three blocs contain a huge consumer market of up to 625 million people, Abdel-Nour said. They also represent 62 percent of the total volume of trade in Africa and a total GDP of up to $1.2 trillion, he added. Source: News video news.us

Experts query benefits Uganda would reap from EAC-COMESA-SADC FTA On June 10, representatives from Uganda along with counterparts from 26 other member countries of the three regional trade blocs— the Common Market for Eastern and Southern Africa (COMESA), the East African Community (EAC) and the Southern African Development Cooperation (SADC) — will finally convene in Sharm el Sheikh, Egypt, to sign the long-awaited tripartite free trade area (FTA) agreement. A free trade area is a geographical region that covers a trading bloc, whose member states have signed a free trade agreement, and in the process eliminate barriers to trade such as tariffs and import quotas. Once it is endorsed by all the members, the FTA will stretch from Cairo in Egypt to Cape Town in South Africa, only skipping the newest nation on the continent, South Sudan, which is not yet a member of any of the three regional blocs. The countries have a combined population of over 600 million people and a gross domestic product (GDP) of $ 1.3 trillion - almost 60% of the continent’s total GDP - according to a 2013 COMESA policy document. When signed, the tripartite FTA sometimes referred to as the ‘grand free trade area,’ would be the largest economic bloc on the continent. Though Amelia Kyambadde, Uganda’s minister of trade, industry and cooperatives is positive, other experts are not very excited yet. Kyambadde told The Independent on May 9 that the FTA, which will be transformed into a common customs union at a...

CAPE TOWN, South Africa - Having a regional cross-border payment systems in Africa goes a long way towards easing concerns that have arisen about the general reduction in correspondent banking relationships globally writes PAUL TENTENA. This, according to Lesetja Kganyago the Governor South African Reserve bank (SARB) will bring about greater efficiencies in the payments process. Kganyago said the South African Development Community (SADC) Integrated Regional Electronic Settlement System (SIRESS), launched in July 2013, is already having a significant impact on cross-border payments. Ablout 43% of intra-SADC payments were now taking place through SIRESS. “By the last week of April this year, SIRESS had reached the R1 trillion settlement mark,” he said. He praised other regional solutions implemented in the payment systems environment since the year 2000 like the West African Monetary Zone (WAMZ), and the East Africa Payment Systems (EAPS) of the East African Community (EAC). “The EAPS is a secure, effective and efficient funds transfer system that enhances efficiency and safety of payments and settlements within the region. It also facilitates cross-border transactions that are essential for boosting intra-regional trade among East African countries. “Some of the benefits of EAPS include real-time funds transfers, finality and irrevocability of payments, increased accessibility and same-day settlement. The initiative is indeed a success that is worth celebrating,” Kganyago said. He was speaking during the 22nd SWIFT African Regional Conference (ARC) held in Cape Town recently. Society for Worldwide Interbank Financial Telecommunication (SWIFT) brings together, bankers, policymakers, industry leaders and the broader...

ARUSHA, Tanzania - Development partners are to fund more than half of the 2015/2016 East African Community Secretariat budget. The Tanzania Deputy Minister for East African Affairs Dr. Abdallah Sadaala Abdallah, who is also the Chair of the Council of Ministers was presenting the East African Community (EAC) Secretariat budget last week. Sadaala said, “Member states will contribute ($47,566,973) compared to $46, 958,273 of the current year and Development Partners support will inject ($58,555,635) which is a significant drop from the $75,121,126 of the previous year. Other sources of revenue shall account for $4,537, 490.” Assessing the Community performance in the financial year 2014/2015, Dr. Abdallah said the EAC achieved various achievements in the financial year ending 2014/2015. These include the commencement of the clearance of goods under the Single Customs Territory on the Central Corridor as well as rollout of more products on the corresponding Northern Corridor. He remarked that the EAC worked hard to see that there is an Elimination of Non-Tariff Barriers Bill (NTB) and this has been achieved following the passing of the Bill in 2015 he said the Elimination of NTB, coupled with legally binding mechanism for elimination of NTBs, would spur business and enhance the free movement of goods and services in the Five country’s Economic block. The Minister said in the financial year 2014/2015 EAC adopted the legal and regulatory framework of the EAC Securities Market that includes public offers for equity securities and fixed securities and regional listings in the securities market....

AFRICA is a continent endowed with a lot of resources and yet the continent continues wallowing in poverty with most of its people living below the poverty datum lime. There have been several issues of humanitarian crises in Africa and most of these have dwelt on the debilitating poverty crises that many African countries face. Some economists argue that the absence of economic growth is in part due to a detrimental geography that impacts on the economies of the countries. Another cause for the sluggish economies, it is argued, is the insufficient cooperation among member states. This could, however, be significantly eased when some of Africa’s regional groupings sign a pact. Minister of Foreign Affairs Harry Kalaba says the three regional groupings will next month sign a tripartite agreement aimed at emancipating Africa from poverty through a well-coordinated trade environment. The three regional groupings: Southern African Development Community (SADC), Common Market for Eastern and Southern Africa (COMESA) and the East African Community (EAC) will sign an agreement to enhance trade. The tripartite agreement will be signed in Egypt’s resort city of Sharm El Sheikh on June 10, 2015. This is a welcome development because African stands to benefit from increased inter-continental trade and this development can translate into more revenues for respective countries. The removal of tariff barriers will help African countries improve trade amongst themselves and this would serve as a catalyst for enhancing trade and lead to more revenues. It has long been realised that trade is a...

THE government is committed to working with the private sector to make sure Tanzania played active role in the regional integration process, the Permanent Secretary in the Ministry of East African Cooperation, Ms Joyce Mapunjo, has said. She said in Dar es Salaam that the government was welcoming more engagement with the private sector to address issues that affect trade and investments in the country. "The government is very much committed to work with the private sector to improve the business environment," she told the East African Community Secretary General forum with the Chief Executive Officers of business organisations in the EAC region. The PS encouraged the private sector to engage more with the government on matters affecting trade and investments and noted the government would even entertain informal meetings to speed up process of addressing particular hassles to the private sector. "We support more engagement with the private sector. Formal and even informal arrangements are most of the times entertained to make things go faster," she said. The PS said the government was working on tax and standard harmonization, two areas that have been raised by the private sector as a problem in efforts to boost trade and investments in the region. She said non-tariff barriers to trade was an area where the government made significant progress but noted addressing the NTBs was a continuous process calling for the cooperation of the private sector. Earlier, the Secretary General of the East African Community, Dr Richard Sezibera, said there were...

After conducting improvements on infrastructure at border posts, Trademark East Africa (TMA) has mooted one stop inspection stations (OSIS) along the central corridor. TMA’s country director for Tanzania Dr. Josephat Kweka said this early this week in Dar es Salaam at the launch of the annual report of TMA for 2013/14. The report titled “Partnering for prosperity in East Africa” describes various development initiatives currently being undertaken by TMA to improve inland transportation infrastructure within East Africa region. A feasibility study has been completed and procurement is being instituted for design and supervision work on the basis of the project as set out in the feasibility study report, he said. He told the gathering that three sites have been selected, namely Nyakanazi in Kigoma region, Vigwaza in Tabora region and Manyoni in Singida region where upon completion of these stops this will reduce the time it takes to inspect goods being transported along the central corridor. Elaborating, Dr. Kweka said that road safety will improve along with reduction in road congestion, especially by introducing “electronically linked weigh in motion weighbridges” to reduce truck weighing times. “TMA has tirelessly worked with East and Central African states since its inception in 2009, in the elimination of Non Tariff Barriers (NTBs) to improve efficiency for prosperity within the regional block,” he declared. TMA is also engaged with stakeholders in the modernization of Dar es Salaam port which by 2020 is expected to handle 22 million tons annually from the current 12 million tons...