South Africa last week signed the agreement establishing the Tripartite Free Trade Area (TFTA) during a meeting of the Tripartite Sectoral Ministers Committee in Kampala, Uganda. The meeting was attended by the trade Ministers and officials from the Common Market for Eastern and Southern Africa (Sacu), the East African Community (EAC) and the Southern African Development Community. South Africa did not sign the agreement when it was initially launched in 2015 owing to outstanding work in some of the annexures to the agreement. All of the annexures have now been completed and adopted by the Tripartite Sectoral Ministers Committee. Trade and Industry Minister Dr Rob Davies said South Africa has been a champion of the tripartite process from the beginning and is committed to the process. “The conclusion of these negotiations will be another important step forward in the process and will provide commercial benefits to our business people by enabling them to trade products between Sacu and EAC countries at a reduced or zero tariff,” he said. The TFTA represents an integrated market of 26 countries with a combined population of 625-million people and a total gross domestic product of $1.6-trillion. Once the agreement enters into force, it will reduce the tariffs on goods traded between the tripartite countries and create new opportunities for exports as well as regional value chains. Source: Engineering News

One way to speed up Africa’s economic transformation is through deeper trade integration. Official statistics put intra-African trade at a mere 13% of the continent’s total trade. That is abysmally low. Higher volumes of intra-African trade are essential so that African countries can do business with each other more frequently and with wider margins. The merits are clear. Firms and businesses are exposed to bigger markets, new opportunities, and a larger pool of capital (including human capital) – and, ultimately, grow their turnover and returns. Consumers buy from a wider variety of products and services at a relatively cheaper cost, and attain a higher consumer welfare status. Labour benefits from skills upgrades and attractive remuneration offered by trading firms. This sets in motion a chain of other economic activities that support and spin off from regional trade. Governments also reap rewards such as a positive balance of payments, a fiscal boost from a wider tax net, and more revenue to invest in public infrastructure. This is a standard international trade position applicable throughout the world; it is therefore not surprising that regional trade deals are a core strategy in countries’ economic policies. So why are intra-African trade volumes so low and, more importantly, how can we increase it? Is it a matter of wrong or ineffective policies? Or a lack of business activity in Africa to take advantage of regional markets and build intra-African trade? I believe it is more the former than the latter, and I will explain why in...

The British prime minister has announced a multi-million pound package of support for wealth creation in Africa. Theresa May unveiled the measures at the G20 submit in Hamburg on Saturday as she called for global action to unlock the untapped economic potential of the continent. The plans include £60m to support the ability of African nations integrate into global financial markets, paving the way for the City of London to work as a hub for African finance. A further £61m will be released to boost trade infrastructure in Tanzania – including working with the World Bank to nearly double the capacity of Dar es Salaam port. Somalia will receive £30m to build a functioning civil service as it recovers from conflict and neighboring Ethiopia will get £35m to attract investment. Rwanda is set to receive £11.8m for the same ends. May said: “We must not forget that progress in Africa benefits the UK at home. “Our international aid work is helping to build Britain’s trading partners of the future, creating real alternatives to mass migration, and enhancing our security, while simultaneously ensuring we abide by our moral responsibility to meet the immediate humanitarian needs of some of the poorest people on earth. “This is the future of aid, delivering value for money for the taxpayer.” The investment is aimed at tackling the issues in Africa that slow down the continent’s growth prospects such as poverty and natural disasters like drought. It’s also includes measures such as developing insurance systems to...

Efforts are underway to create a free trade area collectively called the African Continental Free Trade Area, covering half the African continent The signing of the tripartite free trade area agreement by South Africa in Kampala has injected fresh momentum into the tripartite negotiations to create a free trade area covering half of Africa. According to a statement from the Common Market for Eastern and Southern Africa (COMESA) secretariat, this brings the total number of countries that have signed to 19. A total of 14 ratifications are required for the Agreement to enter force. Efforts are underway to create a free trade area that covers the Common Market for Eastern and Southern Africa (COMESA), Southern African Development Community (SADC) and East African Community (EAC), collectively called the African Continental Free Trade Area (CFTA), covering half the African continent. “South Africa signed the Agreement the very hour that the remaining three Annexes to the Tripartite Agreement were adopted by the Ministers following the conclusion of the ministerial meeting,” said the COMESA Director of Trade and Customs Dr. Francis Mangeni who was in the negotiating team. The meeting finalized and adopted the three remaining Annexes (on rules of origin, trade remedies and dispute settlement), thus producing the full Tripartite Agreement. While the main Agreement had been signed on 10 June 2015, six out of the 10 Annexes had by then been negotiated and cleaned up by the lawyers. Three Annexes, though negotiated, were yet to be scrubbed by the lawyers and were on...

Arusha. The East African Court of Justice (EACJ) yesterday dismissed an application filed by a Tanzanian against the East African Community (EAC) member states signing the Economic Partnership Agreement (EPA) with the European Union (EU). The regional court refused to grant an order restraining four partner states, including Tanzania, which have not signed the EAC-EU-EPA trade arrangement from penning the deal. Equally, the court under the Deputy Principal Judge, Isaac Lenaola, failed to restrain Kenya and Rwanda, which had signed it, from continuing with the subsequent procedures. The court also refused to direct the seventh respondent, the EAC, in an application filed by Castro Pius Shirima, to withdraw forthwith from any negotiations initiated with the EU. Apart from Tanzania, three other countries which have declined to sign the EPA agreement are Uganda, Burundi and South Sudan. The latter joined the EAC only last year and was not involved in negotiations that date back to 2002. Kenya and Rwanda signed the deal in September last year, roughly around the time the negotiations were concluded. Kenya has even ratified it and has been pressing for fellow states in the bloc to follow suit. Mr Shirima had sought the court’s order that would bar the EAC member states and the secretary general of the community from signing the EPA deal on grounds that signing the agreement was in contravention of the EAC Treaty. He further argued that the EAC bloc would suffer considerably by nodding to EPA, noting that agriculture - the backbone...

Trade and Industry Minister Rob Davies will today leave for Uganda where he will attend the Tripartite Committee of Sectoral Ministers meeting. The meeting, which will be held in Kampala on Friday, will give the Ministers from the Common Market for Eastern and Southern Africa (COMESA), East African Community (EAC), and Southern African Development Community (SADC) an opportunity to get an update on the progress achieved in the Tripartite Free Trade Area (TFTA) negotiations. The TFTA consists of 26 member states of the African Union. "The TFTA marks an important step in promoting regional integration in Africa and is a building block for the Continental Free Trade Area. The meeting is expected to consider the remaining annexes, thus marking the conclusion of the legal framework for trade in goods," said the Department of Trade and Industry. This will facilitate the signature of the agreement by all member states. Negotiations on tariffs, rules of origin and Phase II will continue as part of the built-in agenda. Minister Davies has said that considerable progress has been achieved in tariff negotiations between Southern African Customs Union (SACU) and the EAC and Egypt. According to Minister Davies, it is expected that SACU and the EAC will conclude the tariff negotiations in the near future. Launch of Microfinish Automotive Meanwhile, Trade and Industry Deputy Minister Bulelani Magwanishe will on Friday launch the multi-million black industrialist firm, Microfinish Automotive in Pinetown, KwaZulu-Natal. Microfinish, which is an automotive valve guide and valve seat manufacturer, was approved for...

Growth in the logistics industry may stagnate or drop due to inadequate participation of women in the sector, a new study by lobby group Trademark East Africa shows. The study, released in June reveals that 68 per cent of female employees in the logistics sector find their working conditions very poor while only 13 per cent find them good. Locally, only 20.5 per cent of employees in the logistics sector are women, a statistic that is below the one-third participation requirement by the law. The story is replicated throughout the East African region with only Rwanda achieving slightly above the one-third rule, at 33.3 per cent, while Tanzania and Uganda stagnate at 15.8 per cent, while Burundi trails behind at 15.6 per cent women in the sector. “East Africa’s logistics industry faces a significant skills gap and the region could make up on much needed skills by enhancing women’s participation. We need to get to that level where more women take up relevant training courses and eventually these jobs so that we all grow the economies,” TradeMark Africa director of trade logistics Abhishek Sharma said in a statement to the Star. Collectively, the East Africa region only has 19.73 per cent of its women in the logistics industry with men taking up 80.21 per cent of the jobs. According to the study, the pipeline of young women to the industry is very narrow, a situation likely to make the sector worsen as women in the country are failing to enroll...

Traders have been urged to take advantage of the new customs reforms to become more competitive and increase cross-border trade. According to the Rwanda Revenue Authority (RRA), some of the reforms including, the gold card scheme and authorised economic operator, offer benefits that could enhance the efficiency of local traders. Though some of the reforms were implemented this year, the gold card facility was launched two years ago to ease goods clearance procedures for low-risk importers. Fred Nuwagaba, the RRA customs unit trade management division expert, however, said few cross-border traders have embraced the facility despite its enormous benefits. “Goods of compliant tax-payers that hold this facility (gold card) are released immediately upon declaration at customs. This is, therefore, an instrument that eases and promotes trade that the importers should exploit to boost business,” Nuwagaba told The New Times. The gold card scheme is intended to help customs balance its conflicting mandates of trade facilitation and enforcement and control, the expert explained. It also allows the department to facilitate low-risk consignments, allowing the agency to focus its enforcement efforts on the transactions representing “higher or unknown risk” ensuring easy flow of goods, he added. Sensitisation needed Trade experts, however, say there is need to sensitise traders on such facilities to enhance their effectiveness and, ultimately, promote regional trade. Kevin Umuhoza, a trade expert in Kigali, said it is RRA’s responsibility to educate traders about such facilities and the benefits they present them (business community). Umuhoza added that few importers and exporters...

Kenya stands to gain significantly from stronger economic growth of regional partners, as it can take advantage of increased demand from these economies, says a report launched on Tuesday by an international accountancy and finance body. The report by the Institute of Chartered Accountants in England and Wales (ICAEW) finds that Nairobi is positioned to take advantage of rising demand for manufactured goods, while the country's location and relatively developed transport infrastructure will allow Kenya to act as the gateway into the East Africa region. "The East Africa Community (EAC)'s infrastructure development strategy still largely depends on improving the efficiency of imports to the region through Mombasa, from which Kenya can be expected to gain," the report says. The report reveals that EAC members accounted for a fifth of total Kenyan exports in 2016. According to the report, the African continent accounted for 41 percent of Kenya's exports in 2016 while Europe and Asia each accounted for approximately a quarter of total exports. The study finds that Uganda held the position of Kenya's largest single export destination accounting for 11 percent of total exports during 2016. The report, commissioned by ICAEW and produced by partner and forecaster Oxford Economics, provides a snapshot of the region's economic performance. The report focuses specifically on Kenya, Tanzania, Ethiopia, Nigeria, Ghana, Ivory Coast, South Africa and Angola. The East African nation has been relatively successful in diversifying its exports and building up a strong manufacturing base. Agricultural products such as tea and flowers made...

EAST African Grain Council (EAGC) is optimistic that the Zambia Commodity Exchange (ZAMACE) platform will boost trade relations between Zambia and East Africa. EAGC executive director Gerald Masila said the East African region has a great demand for local commodities, providing an opportunity for Zambia to supply grains and cereal to that region. Mr Masila said in an interview when ZAMACE hosted-regional grain trade facilitation forum last week that the gathering provided an opportunity for Zambia to supply East Africa as Zambia is a big supplier and producer of grains and cereal. “We are here hosting a trade facilitation programme that has brought together buyers from the East African region including Rwanda, Burundi, Uganda, Kenya, Malawi and others. “In this forum, buyers from the Eastern African region are meeting sellers from Zambia and they are negotiating and signing transaction agreements for supply of grains and cereals out of Zambia to East Africa… This is the beginning of a long journey that will see a total change in trade relations between Zambia and East Africa,” he said. Mr Masila said the assurances that Minister of Finance Felix Mutati gave to the business community that Government will support the transactions and also address the bottlenecks that may come along the way of trading will further boost trade relations. “We are, therefore, glad that the minister [of Finance] has confirmed that the export bans are a thing of the past and that Zambia has changed orientation so that this country will be looking...