Today, over 40 percent of people living in sub-Saharan Africa live in absolute poverty. It is this grim reality and the urgent need to sharply reduce the poverty percentage in Africa through trade that dominated the Regional dialogue on World Trade Organization (WTO) accessions for the greater horn of Africa being held in Nairobi. Speaker after speaker bemoaned among others erection of non-barrier tariffs in African borders, lack of product diversification and weak border governance as the main challenges hampering trade growth in Africa. Speaking at the event, Gabriel Negatu, African Development Bank Director General, East Africa Regional Centre challenged African markets to diversify to have a chance at being competitive in a rapidly changing world. “Africa faces major challenges. Our economies aren’t adequately diversified, our manufacturing sector isn’t adequately differentiated,” he said, adding that “we tend to draw from somehow similar resource and end up manufacturing similar products; it becomes very difficult to trade with each other.” Negatu noted that the only way African regional blocs can attain competitiveness is to specialize. To achieve this, he urged the markets to hit a ‘pause’ button first, carry out a thorough audit to establish each nation’s strengths and weaknesses. “For example, Ethiopia has 100 million people. Their power is sold at 3 cents but the man power is not as trained. But Kenya has a very wide natural resource base, access to the port and skilled labour. We need to take a step back, look at the region. Each one should look at what they do best and focus...

THE agenda of an East African federal government, euphemistically sold as an EAC 'political federation' was back on agenda at a meeting of the bloc's council of ministers here. The agenda is up for discussion by the 26th meeting of the Sectoral Council of Ministers responsible for EAC Affairs and Planning (SCMEACP) at the EAC Headquarters here. The head of Corporate communications and public affairs, Mr Owora Othieno, revealed this, saying: "The meeting is considering several reports ... including the directive by the Summit (Heads of Partner States) ... to appoint a team of experts to draft the constitution of EAC Political Confederation." Political Federation is considered the ultimate goal of the EAC regional integration, the fourth step after the Customs Union, Common Market and Monetary Union - provided for under Article 5(2) of the treaty establishing the Community itself. It is also founded on three pillars of common foreign and security policies, good governance and effective implementation of the prior stages of regional integration. So attainment of the political federation is, in itself, a process and not an event. Though the process has been slow, the EAC heads of state resolved at a special summit held in Nairobi (August 27 to 29, 2004) to examine ways and means of deepening and accelerating the process through a fast-track mechanism. At the time, the summit meeting set up a committee to fast-track the Community's political federation, dubbed 'the Wako Committee' to carry out wide ranging consultations and finalise its work on...

The Common Market for Eastern and Southern Africa (COMESA) Business Council (CBC) will this week launch a regional tourism and wildlife heritage handbook to promote the bloc as a single tourist and wildlife destination. The handbook is part of the COMESA Sustainable Tourism Development Strategic Framework that has been adapted by member states as a model to develop national tourism action plans to boost competitiveness of the sector. It seeks to raise awareness on sustainable tourism and wildlife conservation among the 19 member countries, according to the CBC Chief Executive Officer Sandra Uwera. The publication titled, ‘The COMESA Tourism and Wildlife Heritage Handbook’ will be launched during the ongoing 47th Africa World Tourism Heritage Summit taking place in Kigali. Uwera said the handbook showcases the different tourism and wildlife products in all the 19 COMESA countries. “This initiative will promote cross-border linkages and partnerships between stakeholders in the tourism industry in COMESA. It will also help to advocate for responsible business practices towards environmental sustainability in tourism sector.” Osborn Kinene, the Rwanda Eco-Tours boss, said the handbook is a timely intervention that will help market Rwanda as a tourism destination, thus increasing tourism revenues. The publication will operate under the theme “Single Market–Countless destinations”. Rwanda projects to earn $444 million (about Rwf370 billion) from tourism this year compared to $404 million recorded last year. Source: New Times

Asmita Parshotam unpacks the continent-wide agreement aimed at accelerating integration and economic development. The Continental Free Trade Agreement (CFTA) is an Africa-wide free trade agreement (FTA) designed to boost intra-African trade and pave the way for the future establishment of a continental customs union. The CFTA builds on existing Tripartite FTA negotiations amongst three African regional economic communities (RECs): the Southern African Development Community (Sadc), the Common Market for Eastern and Southern Africsa (Comesa) and the East African Community (EAC), although it would like to incorporate all other African RECs too. The decision to establish the CFTA was adopted as early as 2012 by the heads of state at the 18th ordinary session of the African Union (AU), and negotiations officially begun in June 2015. In bringing together all 54 African countries with a combined GDP of more than US$3,4 trillion, the CFTA is an ambitious project that will connect more than one billion people to a variety of cross-continental goods and services through enhanced trade facilitation and greater movement of people and investments. Why do we need it? The CFTA stems, in part, from the realisation that regional integration is stultified and not equitably pursued amongst all African regional economic communities (RECs), and that intra-African trade is at critically low levels compared to African trade with outside partners. The CFTA will address seven priority areas related to trade: policy, infrastructure, finance, information, market integration, boosting productivity and trade facilitation. For the CFTA to be successful there is great need...

Railway infrastructure development is an important building block to improving trade across the Southern Africa Hinterland Territories, which comprises three landlocked countries; Malawi, Zimbabwe and Zambia. This is according to Emmanuel Ntshangase, Country Manager of Maersk Line Hinterland Territories - who says access to the Hinterland countries is extremely vital for the growth of the African continent, as each of these countries have a great deal to offer the rest of the world. "For example, Lake Nyasa in Malawi contains more fish species than any other lake in the world, making it a prime location for the export of fish. Furthermore, Zambia is Africa's second largest copper producer and Zimbabwe is the world's sixth largest tobacco producing country." Poor inland connectivity and the related cost to move products inland are among the biggest challenges currently facing landlocked countries with regards to trade. "The World Bank Trading Across Boarders Report, which ranks economies on their ease of doing business, suggests that hinterland Countries currently have room to improve when it comes to moving products inland." Ntshangase attributes the majority of these issues to the high proportion of cargo that currently moves inland via road. "The border crossings and customs processes in these landlocked countries were not designed for the amount of traffic and cargo that currently moves via road, which has occurred due to the use of railways having diminished over the years." Ntshangase explains that increasing the use of rail, which reduces the amount of cargo on the road provides...

The East African Community countries in conjunction with public and private production companies in the countries have considered a ban on import of new shoes and second hand shoes after signing of memoranda awaiting Head of States signatures in bid to conserve, utilize, improve local production, supplies and sales among the member countries. “The challenge we have had previously that has been in the center to undermine local production is fear for competition between public and private leather production companies. It is good that we realised that we can do much better if we work together hence the move to have the memoranda signed,” acknowledged Mr.Robert Njoka, Director REDDAMAC Leather Centre. This emerged during a press briefing by stakeholders in the industry after Kenya Prison Service Officers were awarded for excellence after successfully completing 3 months special training within the sector. The move is aimed at seeing public and private companies in the industry work together to improve and increase production locally to boost the members countries economy. Three months ago, the Kenyan government partnered with one of the leather manufacturing pioneer company locally that saw selected prison officers go through extensive training in Management, Manufacturing and Equipment service and maintenance. The officers from Athi River and Kamiti Maximum Prisons are now tasked with training as many prisoners as possible to boost production in the Kenyan leather industry. Source: Citizen Digital

Some eyebrows were raised when South Africa’s President Jacob Zuma announced last weekend that Comoros had been admitted as the Southern African Development Community’s (SADC) 16th member. The announcement came after the 37th Ordinary Summit of the Heads of State and Government of the organisation in Pretoria. Officials disclosed that Burundi had also applied but had been declined, for now. They said Burundi first needed to resolve the internal political instability that President Pierre Nkurunziza provoked in 2015 when he took an apparently unconstitutional third term in office. But they seemed confident that Burundi would eventually be admitted. Why the interest in joining? SADC doesn’t, on the face of it, seem a very alluring organisation. Vera Songwe, the Economic Commission for Africa (ECA) executive secretary, painted a rather bleak picture of the region’s economy in her speech to the summit. She said overall growth in the region had declined to 1.4% in 2016, from 2.3% in 2015. The share of manufacturing in the region’s overall GDP had also declined, from 14.1% in 2005 to only 11.1% in 2015. SADC countries continued to rely heavily, for over 60% of total exports, on raw commodities, in particular minerals – with minimal value added. In 2016 the region also registered a deficit of $17 billion in goods and services, while lower revenues from diminished global commodity prices and depreciating currencies inflated fiscal deficits and public debts. SADC’s overall government debt rose from 42% of GDP in 2014 to 46.8% of GDP in 2015....

African countries will incur at least $4.3 trillion, or $174 billion a year, in financing infrastructure projects to support economic growth over the next 23 years, according to a recent report by G20’s Global Infrastructure Hub (GI Hub). The Global Infrastructure Outlook calls upon African countries to raise the continent’s infrastructural investments to $240 billion per year ($6 trillion by 2040) in order to match their peers. According to the study covering infrastructure investment needs globally, Africa’s infrastructure segment remains small, accounting for just six per cent of the global tally. The continent’s needs are 39 per cent more than the forecast investment under current trends. “Total infrastructure investment in Africa was equivalent to 4.3 per cent of GDP between 2007 and 2015. The continent will need to maintain investment at around this proportion of GDP to accommodate economic and population growth to 2040,” the report says. In East Africa, the three countries included in the report; Kenya, Ethiopia and Tanzania will cumulatively spend $837 billion on infrastructure projects by 2040. But the three will require at least $308 billion more to meet their infrastructure spending needs over the period. Striking differences Kenya must spend at least Ksh969 billion ($9.3 billion) every year on infrastructure to meet its infrastructure spending needs of $223 billion. Ethiopia has the highest forecast spending against current spending trends gap of $154 billion, followed by Tanzania at $115 billion followed. To bridge the gaps, the two countries will need to raise their infrastructural spending to...

The Intergovernmental Authority on Development (IGAD) began Monday a consultative process within member states which is expected to lead to a pact that will enable free movement of people in the region. According to the IGAD secretary general, Amb. Mahboub Maalim, when the body was established on January 16, 1986, one of its core objectives was to enable free movement of people among member states. "One of the core ambitions of IGAD was to enable migration. Unfortunately we have been dogged by many challenges such as internal conflicts in member states. We were thus forced to focus on priority areas such as peace, security and disaster management," he said. He added that regional co-operation has been vital in solving conflicts in Somalia and South Sudan, citing Uganda's contribution as key in stabilising both nations. "Migration is not about to stop anywhere. People cross borders every minute. It is unfortunate that many of the migrants dying in the Mediterranean Sea are from the IGAD region, yet we could have worked out a mechanism to help them by easing intra-migration. And that is why the entire world is concerned about migration," said Maalim. The three-day consultative meeting (August 21-23) dubbed The Protocol on Free Movement of Persons in the IGAD Region, brings together key players in the migration sector, including civil society, academia, private sector, the media, the Police, the military, and the ministries of health, internal affairs and foreign affairs. The stakeholders are expected to give their views on free movement...

Speaking during the Africa Business Forum, South African Trade Minister Rob Davies said that available colonial era infrastructure was only geared towards fulfilling its role as a mere producer and exporter. “Colonialism has created infrastructure that was only geared towards the continent fulfilling its role as mere producer and exporter of primary commodities that were taken to other people’s economies. There is a huge amount of catch-up that we need to undergo as a continent in order to achieve regional integration,” said Davies. The continent is also losing over 40 percent of its competitiveness due to the absence of infrastructure or inefficiency of established infrastructure. He emphasized the role of infrastructure saying it would provide roads, rail, ports, energy transmission lines and ICT connectivity which are all necessary to facilitate economic development. “Infrastructure can be an important counter-cyclical tool because by infrastructure development we can to generate economic activity even if some of the other forms of economic activities are suffering from the negative waves,” he continued. The continent, therefore, needs integration which is dependent on three factors: free trade areas, infrastructure development and cooperation which are essential in promoting industrial development across the continent. “We need to partner to build the required infrastructure and the real capability that will assist all of us build our countries. Adequate, effective, affordable and well-maintained infrastructure is an essential tool for Africa’s growth and development,” he said in conclusion. Source: Capital Business