Large cargo handling deals — health products, heavy machinery and coffee — have boosted Uganda’s clearing and forwarding industry despite a weak economy and rising competition. Prolonged economic downturn experienced since the beginning of 2017/18 led to a tax revenue shortfall of Ush355.8 billion ($96 million) between June and December 2017, Bank of Uganda data shows. Uganda’s economy expanded by four per cent against a target of five per cent in 2016/17 financial year. Figures compiled by Uganda Revenue Authority (URA) revealed the total number of Customs declaration entries registered by URA rose to 500,000 last year, with minimum transaction fees in the industry estimated at Ush500,000 ($135) per transaction or more than Ush250 billion ($67.7 million) in total annual industry revenues. “We are getting some huge deals from the Chinese contractors but the flow of these orders is fluctuating,” observed Lino Criel Icila, secretary general of the Uganda Clearing Industry and Forwarding Association. Infrastructure projects Mr Icila was alluding to the huge infrastructure projects in the energy and transport sectors by the Chinese, which have increased demand for new construction equipment. The ongoing projects are Karuma and Isimba dams, Mubende-Kakumiro-Kagadi and Soroti-Moroto roads. In additional to Chinese contracts, the Ministry of Works and Transport was a key player in road construction. The ministry imported about 1,151 units of equipment — motor graders, vibro rollers, wheel loaders, water bowsers and dump trucks — valued at Ush318 billion ($86 million), last year. A big chunk of this consignment was cleared and...

Cross-border traders are blaming Customs officials for harassment, high taxes, and inspection of their products by the customs authorities at the border points. According to the traders, the officials lack information on the Customs Union and the Common Market Protocol. The traders were speaking at the recently concluded 20-year anniversary celebrations of the East African Business Council in Nairobi. “Most of these officers do not understand what the Common Market Protocol entails. You will be charged taxes at the border on every product even when you try to explain that you are East African and it is not right,” said Charity Githinji, the managing director of Tandaza Tanzania Ltd. She said that although the one stop border posts have helped ease the cost and time of doing business, not all the Customs officers understand how they work. “If, for example, I am crossing the border from Tanzania to Kenya, I am subjected to checks on both sides instead of just one side,” said Ms Githinji. She cited the single tourist visa as one of the boosts for business in the region, even though only Kenya, Uganda and Rwanda have signed it. Hajjat Nakasujja, the chief executive of Aloesha Organic Natural Health Products, said there was a need to sensitise Customs officials on what free trade under the EAC entails. “New rules, regulations and agreements are passed but the information does not reach the border officials. This is where the challenge is,” said Ms Nakasujja. EABC chairman, Jim Kabeho recommended implementation of...

March 21 in Kigali, Rwanda, saw African leaders launch the biggest free trade agreement since the establishment of the Geneva-based World Trade Organization 23 years ago. The African Continental Free Trade Area is a culmination of an agreement reached in 2012 and the intense negotiations of African heads of government that started in earnest in 2015. Initially the accord was to be signed by 55 member states. Only 44 signed the document after Nigeria, Africa's biggest economy, absconded. Whichever way you look at it, Rwanda's President Paul Kagame, also the African Union chairman, rightly put it: "Some horses decided to drink the water. Others have excuses and they end up dying of thirst." The new free trade area brings together an estimated 1.2 billion people with a combined gross domestic product of more than $2 trillion. The draft agreement commits countries to removing tariffs on 90 percent of goods, with 10 percent of what they referred to as "sensitive items" to be phased in later. Crucially, the covenant liberalizes services and aims to address the perpetual problem of non-tariff barriers, which have become the biggest headache in intra-African trade. Such barriers come in the form of government laws, regulations, policies, conditions, restrictions or specific requirements or prohibitions that protect domestic industries from foreign competition. Once the bottlenecks are done away with, African states look forward to a situation where there will be free movement of labor and the establishment of a single currency like the eurozone monetary union of 19...

Delta Air Lines has said it added a second non-stop route from Lagos to the United States (U.S.), with the aim of boosting trade and commerce between both nations put at $9 billion as at 2016. The airline also affirmed that the move came as Nigeria opens up greater investment opportunities, as well as to provide business travellers more opportunities to reunite with families and friends.Records have shown that the U.S. is Nigeria’s largest foreign investor and the airline carried more than 89,000 passengers between Lagos and the country in 2017, while the new strategy is expected to increase the indices. Unveiling the new commercial schedules to newsmen last week, in Lagos, alongside the Commercial Director, West and East Africa, Bobby Bryan, the company’s Senior Vice President, Europe, Middle East, Africa and India, Corneel Koster, said the Lagos to New York-JFK route is planned to connect both financial headquarters. Launched on March 25, 2018, as the first ever direct operations on the route, he disclosed that the flights depart Lagos at 11.30p.m (23:30hrs) on Tuesday, Thursday and Sunday to arrive New York-JFK at 5.30a.m (05:30hrs), while in-bound flights arrive Lagos Monday, Wednesday and Saturday. According to Koster, the new arrangement will afford customers flying to Delta’s New York-JFK hub the benefit of over 20 connections across the U.S. to destinations including Washington D.C., Baltimore and Chicago, while also complementing the existing Lagos-Atlanta route with more travel options to and from the U.S. “With the U.S. the largest foreign investor in...

The East African Community (EAC) stands to benefit from the recently unveiled African free trade area if it consolidates its internal market, according to the East African Business Council (EABC). “Failure to remove trade impediments means that our bloc will remain weakened,” EABC executive director Lillian Awinja said last week. She told regional press that the African Continental Free Trade Area (CFTA) unveiled in Kigali last week could pull some EAC states into the new pact at the expense of their trade relations. “This means the benefits going elsewhere...to the rest of African market instead of our internal market,” she said on the sidelines of a regional workshop on trade between EAC and the outside world. CFTA was launched by leaders of the African Union (AU) member states in Kigali on March 21, and the continental body hopes that it will be the world’s largest single market with a cumulative GDP of $3.4 trillion. Leaders from some 44 African countries out of 55 signed up for the trade deal while more others committed to the deal through assenting to the Kigali Declaration. The milestone agreement is seen as a key part of AU’s long-term development plan, Agenda 2063, which calls for easing of trade and travel across the continent. The pact came in the wake of advanced talks on a tripartite trade area comprising the EAC, Common Market for Eastern and Southern Africa (Comesa) and South African Development Community (Sadc), constituting more than 60 per cent of Africa’s GDP and...

A free trade agreement across Africa is "great in principle," Matthew Parks, parliamentary deputy co-ordinator for the Congress of South African Trade Unions (COSATU), told CNBC via telephone Tuesday. COSATU represents more than 2 million workers in South Africa. Attending a summit in Kigali, Rwanda, last week, South Africa's President Cyril Ramaphosa did not immediately sign the African Union's proposed free trade agreement. The agreement posits a free trade area between its 55 member states. Safeguarding jobs and cheap Chinese goods flooding the market are hurdles the South African government must clear before it signs up to a pan-African free trade agreement, the country's largest trade union group told CNBC. A free trade agreement across Africa is "great in principle," Matthew Parks, parliamentary deputy co-ordinator for the Congress of South African Trade Unions (COSATU), told CNBC via telephone Tuesday. COSATU represents more than 2 million workers in South Africa. But, "we need to see some kind of plan," he added. Attending a summit in Kigali, Rwanda, last week, South Africa's President Cyril Ramaphosa did not immediately sign the African Union's proposed free trade agreement, which posits a free trade area between its 55 member states. Ramaphosa instead signed the Kigali Declaration, a precursor to the deal. "We are part of this process of opening up Africa for trade. All that is holding us back from signing the actual agreement is our own consultation process," Ramaphosa was quoted as saying by South African broadcaster eNCA. Forty-four African nations signed on to...

The East African Community is set for logo change in a move aimed at accommodating new members and creating harmony among various organs within the body. The exercise which is expected to conclude in November saw youths from member states invited to submit different designs for consideration. It got 485 different designs from the youths aged between 18-35 years. “We have narrowed down to ten applicants and expect to forward the top three to the council of ministers for approval in an exercise we expect to come to conclude before the end of this year,” said Jesca Eriyo, EAC deputy secretary general. “Rebranding is important to enable the East Africa Community have a simple logo that can also be easily adopted in other organs of the body,” she said noting that the current logo has so many colours that needs to be replaced to also accommodate new entrants in the union. The East African Community launched the rebranding competition in 2017 targeting to change its visual brand identity for eleven Organs and Institutions including the regional parliament and the court. The council of ministers will consider the report of the top entrants in April 2018, where 438 proposed designs have been considered by regional brand experts. The Rebranding process targets to resolve among others the lack of a unique common identifier among the EAC Organs and Institutions, too many colours being used for the flag and logos, the EAC logo not being adaptable to the expansion of the community, two...

African leaders have just signed a framework establishing the African Continental Free Trade Area, the largest free trade agreement since the creation of the World Trade Organisation. The free trade area aims to create a single market for goods and services in Africa. By 2030 the market size is expected to include 1.7 billion people with over USD$ 6.7 trillion of cumulative consumer and business spending – that’s if all African countries have joined the free trade area by then. Ten countries, including Nigeria, have yet to sign up. The goal is to create a single continental market for goods and services, with free movement of business persons and investments. The agreement has the potential to deliver a great deal for countries on the continent. The hope is that the trade deal will trigger a virtuous cycle of more intra African trade, which in turn will drive the structural transformation of economies – the transition from low productivity and labour intensive activities to higher productivity and skills intensive industrial and service activities – which in turn will produce better paid jobs and make an impact on poverty. But signing the agreement is only the beginning. For it to come into force, 22 countries must ratify it. Their national legislative bodies must approve and sanction the framework formally, showing full commitment to its implementation. Niger President Issoufou Mahamadou, who has been championing the process, aims to have the ratification process completed by January 2019. Cause and effect Some studies have shown...

With no shortage of shocking headlines in the past few weeks, it’s understandable that many Canadians might’ve missed that the Trudeau government launched free trade negotiations with the world’s fifth largest economic market — one with over 270 million people and a GDP of more than $3 trillion dollars. In fact, they can even be forgiven for not knowing it by name:  Mercosur. Mercosur is the world’s fourth largest trading bloc, comprised of some of the most important economies in South America: Brazil, Argentina, Paraguay, and Uruguay. Argentina and Brazil, in particular, are high-growth markets both rich in natural resources and home to expanding middle class populations.  They are so-called ‘emerging’ markets, not unlike Mexico, Nigeria, and South Africa. With the continued uncertainty around NAFTA, and the slow pace of talks with India and China, Mercosur represents a welcome addition to Canada’s trade diversification strategy.  To date, Mercosur has not signed a free trade agreement with any western economy. Interestingly, and perhaps surprisingly, it only has trade agreements in place with Israel, Egypt, Palestine, and Lebanon. The renewed Canadian interest in Mercosur is due in large part to Argentina’s pro-business President Mauricio Macri — currently the Chair of Mercosur. Macri was elected in late 2015, shortly after Prime Minister Justin Trudeau, and moved quickly to transform a country that had effectively languished under his more erratic and controversial predecessor Cristina Fernandez de Kirchner. Since Marci’s election, Argentina has taken steps to liberalize the economy by lifting capital controls, removing export...

International trade has brought great benefits, but also inequities. By incorporating the philosophy of the SDGs into trade agreements, trade has the potential to benefit all. The value of world trade has nearly quintupled over the past 20 years from $5 trillion to about $24 trillion. Over the same period, trade has proved to be an excellent medium to leverage and promote economic growth, helping lift a billion people around the globe out of extreme and abject poverty. But in the last 10 years there has been a significant change in how international integration is perceived by the public and pursued in policymaking. As new middle classes have emerged in developing countries, middle-class prosperity in developed countries has found itself wavering. After the financial crisis of 2008, and especially in the last few years, the debate around the benefits of international trade has become much more fractious. One particularly contentious point is whether trade integration – establishing freer trade between countries – has resulted in inequitable economic growth, with some people and nations benefiting at the expense of others. Even the simplest classroom trade models acknowledge that trade benefits accrue unevenly. Trade integration can polarise the gap between the low and high skilled, suppress wage growth for workers facing overseas competition and create hardship and displacement for those who lose their jobs. As it happens, trade agreements are generally devised to reduce trade frictions across borders, while paying little attention to the distribution of the costs and benefits of trade...