When the sun sets on Kigali today, March 21, 2018, it will signal a new dawn for Africa. A new chapter in our continent’s history that will be remembered by future generations as the onset of Africa’s economic liberation struggle. The imminent signing of the African Continental Free Trade Area was described by President Paul Kagame and many other speakers at the African Continental Free Trade Area (CFTA) Business Forum yesterday, as the best thing that has happened to Africa in the last five decades. In his closing line, however, President Kagame decried the slow pace at which we, Africans, are embracing the tremendous opportunities that are associated with Africa’s integration. He said that we seem to enjoy problems while solutions are also around. The purpose of this piece is to call on Africa, to embrace one such solution that will solve the “speed” problem – Digital. The internet (of people and things), big data analytics, artificial intelligence, Blockchain, autonomous cars, drones, robotics, 3D printing, biotechnology, quantum computing, etc have the potential of transforming governments and businesses at an exponential rate. Provided that we embrace the digital revolution instead of pushing back, the CFTA won’t be a dream to be realised by the next generation as it was often said. We can deliver it and enjoy its fruits while we are still with this generation of leaders that has taken up the challenge left by Africa’s forefathers who won the political liberation during the 60ies. As I sat in the...

South Africa's tax chief has been suspended, just days before ratings agency Moody's announces its decision of the rainbow nation's severeign credit status. Zimbabwe's president says Chinese mining firms owe Harare a lot. Uganda's president becomes the latest African leader to defect from the planned signing of a continental free trade deal. And the east African economy is doing very nicely, thank you. South African President Cyril Ramaphosa has suspended the country's top taxman with immediate effect. That's the top story in this morning's Johannesburg-based paper BusinessDay. It's also top of the front page of the Mail & Guardian and tabloid the Sowetan. According to the reports, Tom Moyane, the chairman of the South African Revenue Service, refused to step down after he was asked to resign by the president. According to the presidency, Ramaphosa explained his decision on the basis of a deterioration in public confidence in the South African Revenue Service and the compromising of public finances due to the ongoing controversy at the tax agency under Moyane's leadership. Ramaphosa said it was in the public interest to restore the credibility of the revenue service without delay. The Finance Ministry is to name an acting commissioner. Pressure has been building for Moyane to quit, says BusinessDay. Factors include a 48-billion-rand hole in revenue collection and Moyane's handling of conflict of interest allegations against senior members of his staff. The international ratings agency Moody's will make an announcement later this week on a possible downgrade of South Africa's sovereign...

I recently asked a business acquaintance how long it took to travel by road between DR Congo’s two biggest cities, Kinshasa to Lubumbashi. There was a long sigh, a pained look, then a helpless shrug. “It could take a week or two.” DRC is Sub Saharan Africa’s largest country but this seemed remarkable. A Google Maps search tells you the 1,451 miles (2,335 kilometers) between both cities should take 36 hours, but as my contact noted, it’s not quite that straightforward. A similar distance in the US, from New York to Oklahoma City, (2,373 km), would take take 22 hours, says Google. The DRC conversation came to mind while reading a report (pdf) from London School of Economics’ International Growth Centre, which argues that despite years of trade liberalization and tariff reductions across Africa, the impact has been significantly limited by the internal costs of moving goods within African countries and between neighbors. The high cost of moving goods from or to ports eats into the benefits of free or lower tariff trade. Research shows a one-day reduction in inland travel times could lead to a 7% increase in exports, the equivalent to a 1.5 percentage point reduction on importing country tariffs. Other research shows a 10% drop in transport costs could increase trade by 25%. As is likely in the case of DRC, 2015 research estimated the cost of transporting goods could be up to five times higher (per unit distance) in some sub-Saharan African countries when compared to...

A trio of recent lateral hires indicates that law firms in London are keeping a close eye on African energy and infrastructure opportunities, with US law firms at the vanguard of such interest. Recent announcements by the London offices of Covington & Burling, Akin Gump Strauss Hauer & Feld, and McCarthy Denning, show that partners with project finance, infrastructure and energy backgrounds are in demand in London’s busy lateral law firm hires market. That reflects increasing confidence by banks and sovereigns in financing energy developments, the impact of gradually rising oil and gas prices and increasing activity, recently valued at USD 21.2 billion, in oil and gas mergers and acquisitions, alongside increased infrastructure activity associated with gradually increasing confidence in the mining sector. There is a clear mandate from development banks and African institutions alike to encourage investment in both conventional and renewable energy projects, especially with the prospect of greater investment as a result of China’s Belt and Road infrastructure intensifying around African maritime routes, and London remaining a hub for lawyers working in, and for, the infrastructure industry. COVINGTON BUILDS STRENGTH IN LONDON Covington & Burling was the most recent to announce hires, both individuals possessing extensive skills in project finance particularly in the power and renewable energy, transportation, mining, natural resources and water sectors, following last year’s opening of offices in Johannesburg and Dubai. Robin Mizrahi, a partner, and Laure Berthelot, a special counsel, joined from leading United States energy law firm Baker Botts. Both lawyers advise sponsors, lenders...

The European Union and its free trade agreement took decades to establish. Africa is now hoping it can achieve the same in a fraction of the time. But with Nigeria pulling out, questions are being raised over just how achievable it really is. It's a great idea and a desirable future. A free trade deal encompassing 1.2 billion people stretching from Cape Town to Cairo. Goods, services and perhaps labour, flowing freely in and out of more than 50 African countries. It could create tens of thousands of jobs and significantly reduce unemployment among the continent's youthful population. It'll boost trade between African countries and would be instrumental in moving the whole continent away from the narrative of simply being a place where the powerhouse economies of the West and East come to get their raw materials. Fears Many African governments, naturally, are keen. So, expect lots of fanfare when African leaders gather in the Rwandan capital, Kigali this week to sign the agreement. The South African department of trade and industry says it's "committed to a co-ordinated strategy to boost intra-Africa trade and to build an integrated market in Africa that will see a market of over a billion people with a GDP of approximately $2.6 trillion (£1.85tn) ". And Kenya's trade ministry says it'll not only create a massive liberalised market, but will also "enhance competitiveness at the industry and enterprise level, enhance value addition of products and exploit economies of scale and optimum utilization of resource". But...

Kenya will be playing host to over 180 women entrepreneurs from across Africa who will on Thursday convene at Kenyatta International Conference Centre (KICC) for an intra-regional conference on trade. The conference, the first in the East Africa region will be officiated by Hon. Adan Mohammed Kenya’s Cabinet Secretary Ministry of Industry, Trade and Cooperatives. Dubbed the East African women in intra-regional trade conference & exhibition, the event will bring together high-ranking government officials, women in business from the region, top executives in the manufacturing sector, agri-business, finance, information communication and technology and handcraft sector among others. The conference aims to create a platform for women to dialogue, identify trade bottlenecks and solutions in the EAC region. According to EAWIB platform coordinator, Nancy Gitonga, the conference is keen on ensuring that at least 30 women led businesses are assisted to negotiate for contracts with buyers, during the conference. This follows a process that has already identified the business and pre-matched them to the most ideal buyer. Further, it will be a forum for women in business to engage government, private sector and development agencies and advocate for an environment that promotes women’s participation in trade. Commenting on the event, TradeMark Africa, Senior Director, Business Competitiveness, Lisa Karanja noted: “Having the right conversations with the right people makes all the difference. This conference is a first step in the right direction. It is our plan that strategic partnerships are formed here, that fruitful dialogue to identify key trade bottlenecks and solutions...

The standard gauge railway (SGR) is a critical and strategic national infrastructure fully justified on many fronts, key among them transportation efficiency and synergy that adds value to the expanded port of Mombasa to support the Kenyan and regional economies. Rail is energy- and time-efficient, cost-effective, saves road maintenance costs, and reduces safety exposure on our roads. The SGR project is funded through public funds, debts and even special taxes on imports. Now that the Mombasa/Nairobi phase is in place and extension to the west ongoing, the public have vested interests in seeing the SGR promptly “enabled” to move into full capacity utilisation by shifting imports and exports from road to rail. This is a national obligation and priority to enable SGR create sufficient cash flows to pay its debts, fund ongoing expansion toward the western border while moving towards economic independence away from public subsidies and levies. The government has the fiscal and regulatory means to increase SGR cargo utilisation, and I believe that is exactly what they have been doing. The recent government orders on transfer of cargo from road to SGR are a correct effort to protect a critical public investment. All along, it was known that the SGR would result in “collateral damage” to road transport companies, clearing and forwarding companies, and also highway markets and towns that rely on patronage from truckers. These stakeholders have to adjust their businesses to fit a new national transport model which has the SGR as the main artery. On...

Shipping lines have joined the government campaign to transfer more cargo from the roads to the standard gauge railway (SGR). They are increasingly wooing importers to use a model where cargo terminates at the Nairobi Inland Container Depot as opposed to the port of Mombasa. Technically known as through bill of lading (TBL), the model has been in use but it is expected to go up after the upgrade of the ICD since it benefits both the shippers and importers, especially on return of empty containers. After a series of talks with the shippers, the Kenya Ports Authority (KPA) eventually got their nod. “We have been holding talks with shipping lines and they have agreed to aggressively market the through bill of lading model to importers for cargo destined to Nairobi. This will help us in ensuring that more containers are loaded onto the trains,” the KPA operations general manager William Ruto said on Tuesday. “This is a positive step towards increasing cargo transported using the trains. The challenge was on return of empty containers but if the destination of the goods is listed as the ICD, this will solve the problem,” Mr Ruto said in a telephone interview. The agreement between the shipping line and the importer using the bill of lading model is that the container deposits will be refunded once the equipment is returned to the ICD, he added. While under the bill of lading importers designate cargo directly to the Nairobi ICD, the model that is...

More than two years after the signing of the Sharm-el-Sheikh Tripartite Free Trade Area (TFTA) agreement in June 2015 – which brought together member states of the Southern African Development Community (SADC), East African Community (EAC) and Common Market for Eastern and Southern Africa (COMESA) – trade ministers from all of Africa’s 54 countries, including those of the Economic Community of West African States (ECOWAS), which already have a common external tariff, met in Niamey, the capital of Niger, in early December last year to agree final terms for the African Union’s Continental Free Trade Area (CFTA). By and large, they made good progress. However, there are still issues to iron out. Member states have yet to agree on tariffs on all goods, for instance although on services, they successfully closed the book. "Intra-African trade grew by 8% in the first nine months of 2017, with Guinea, Ethiopia, Burkina Faso, Equatorial Guinea, and Sierra Leone in the lead." In order to make a meaningful impact, the CFTA will have to improve the quality as well as the quantity of intra-African trade. The objective of the CFTA is primarily to engender more intra-African trade, which currently comprises just 15% of the continent’s total merchandise trade. When compared with intra-regional trade in other continents – 67% in Europe, 58% in Asia and 48% in North America – this is quite low. Efforts, thus far, at improving the low trade interactions within the continent, have clearly not been very effective. There are signs...

A walk around Nairobi’s streets may give an impression that Chinese merchandise may have been in the country for decades - virtually filling all aspects of the lives of many Kenyans. China has, however, not always been the leading source of imports for Kenya. The country became the leading source of goods into Kenya in 2015, following her aggressive marketing strategy as well as a focus on the close ties with the East in the initial years of the Jubilee administration. This saw imports from China grow faster. By 2017, they accounted for over a fifth or 22.6 per cent of all goods coming into Kenya. According to Kenya National Bureau of Statistics (KNBS), the value of imports from China in 2017 reached Sh390 billion, a 20 per cent jump from Sh337 billion in 2016. This is against the total imports of Sh1.7 trillion during the year. China as a source of imports for Kenya is in comparison to India that stood at Sh170 billion in 2017, a 17 per cent decline from Sh205 billion in 2016. India was the largest exporter to Kenya in 2014. The country has however sustained a declining trend since 2014 when the value of imports from India stood at Sh264.5 billion, which was in comparison to China’s Sh248.6 billion in the same year (2014). India has been a source of medicine, medical equipment and refined petroleum. Among the factors that have resulted in the rapid growth of imports from China include the cheap prices...