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...

Kampala, Uganda | INDEPENDENT TEAM & AGENCIES | Rwanda and Tanzania have agreed to review the design of Isaka-Kigali standard gauge railway. They have dropped the proposed use of diesel engines in favour of electric locomotives. The line is proposed to link the Tanzanian port of Dar-es-Salaam and Kigali; a stretch of 1,320km. The initial diesel Standard Gauge Railway from the port of Dar es Salaam to Kigali was expected to cost about US$2.5 billion. The bill was to be settled on an approximately 50-50 basis. It is not clear how much the new rail will cost and the financing model for the project has also not been revealed. The initial project was launched on Jan. 20 in Dar es Salaam following a meeting between President Paul Kagame of Rwanda and his Tanzania counterpart, John Pombe Magufuli. The main considerations for the recent changes were train efficiency and impact on environment. The electric trains scored better than diesel on both counts. The move puts the project planning in sync with international trends which are shifting away from diesel over environmental concerns. The change in plan means that the proposed trains will now be faster; with cargo trains travelling at 120km/hr instead of the earlier planned 80km/hr and the passenger train travelling at 160km/hr instead of the earlier proposed 120km/hr. Rwanda’s Minister of State in charge of Transport, Jean de Dieu Uwihanganye, and Tanzania’s Minister for Works, Transport and Communication, Makame Mbarawa agreed the changes in a meeting in Kigali. “We need to...

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...

Regional and international partnerships will be crucial in ensuring that East African countries leave no one behind with respect to access to clean energy, a senior East African Community official said Monday. Speaking at the opening of the first Sustainable Energy Forum for East Africa 2018, in Kigali, Christophe Bazivamo, the EAC deputy secretary-general in charge of productive and social sectors, called for collaborations among sector players, including between governments, private sector and developing partners. Nearly 80 per cent of east Africans, he said, live in rural areas and their main source of energy is traditional biomass consisting of fuel wood, charcoal and agricultural waste. According to the East African Industrialisation Strategy (2012-2032), the EAC seeks to diversify the manufacturing base and raise local value-added content of resource-based exports to at least 40 percent by 2032. “To achieve our industrialisation targets, we need to accelerate access to sustainable energy and promote energy production for productive uses. We realise that we cannot do this single-handedly. We need to revitalise our regional cooperation and partnership with development partners around the globe,” Bazivamo said at the opening of the three-day forum. Energy is a key priority for the six-nation bloc, he said, adding that ensuring availability of sufficient, reliable, cost effective and environmentally friendly energy sources in the region would facilitate achievement of broader EAC objectives, including attracting investments and promoting regional competitiveness. In 2013, EAC government ministries in charge of energy directed the bloc’s secretariat to seek support from the United Nations...

Arusha — A member of the East African Legislative Assembly (Eala), Mr Adam Kimbisa has broken silence, saying Tanzanians were yet to exploit ample opportunities for businesses and jobs in the bloc. "We have to capitalize on our standard gauge railway (SGR) and upgraded ports. Our landlocked neighbours will use them and that will be to our benefit" he told The Citizen. He said instead of complaining from unfair competition from some countries within the East African Community (EAC), Tanzanians should unlock their potentials "that can enable us fair well in our union." "Tanzania can benefit enormously from EAC integration" he said, citing the major infrastructure projects underway which can transform the country into a transport hub within the region. Mr Kimbisa, who was in the limelight when he unsuccessfully contested the position of Eala Speaker last December, said the country has the potential to produce enough food for the rest of the region. "There are ample markets for agricultural produce in South Sudan, Burundi, Rwanda and Kenya. Have we ever saturated these markets?" he asked during an interview with this paper. He attributed failure to exploit the available export markets in the neighbouring countries to Tanzanians being averse to taking risks or being too slow in snatching available opportunities. He said while the crisis-torn South Sudan was short of food, newly established textile mills in Rwanda are in dire need for cotton and sisal imports from Tanzania. He challenged the local entrepreneurs to exploit the export markets for foodstuffs,...

East African governments are under pressure to resolve longstanding trade disputes and remove non-tariff barriers that have slowed economic integration. As the East African Business Council celebrates its 20th anniversary on March 22 and 23 in Nairobi with a series of high-level events, the spotlight is on the gains and hindrances to integration. Lilian Awinja, the EABC executive director, said the council seeks to address integration and industrialisation challenges. Regional businesses will convene at the Kenyatta International Convention Centre to showcase domestic value-added products that are set to transform the bloc into an upper-middle income economy by 2050. “The exhibition will feature products and services grown, developed or manufactured in East Africa,” Ms Awinja said. “Promotion of local industries to manufacture and offer more products and services is critical for the realisation of the Buy and Build East Africa campaign.” At the EAC Heads of State Summit in Kampala last month, regional leaders directed the secretariat to ensure that the Customs Union Protocol, the Common Market Protocol and the EAC Elimination of NTB Act, 2017 are implemented. Non-tariff barriers According to a report by the EAC Council of Ministers to the presidents, by August 30, last year there were 18 longstanding NTBs. Among them is Uganda’s restriction on imports of beef and beef products from Kenya. Although Uganda should have lifted the ban in accordance with the recommendations of the bilateral meeting held between Uganda and Kenya in October 2015 in Nairobi, Uganda says it is still in the process...

Tanzania is banking on the development of its vast gas find into electricity to increase its capacity and provide a dedicated electric line for the SGR network, once completed. Currently, the country’s available power generation capacity stands at about 1,500MW, against a demand of 1,352 MW. “Jointly with Ethiopia, Tanzania re-opened the bids in August last year for the Rufiji hydropower project at the Stiglers Gorge which we will inject more than 2200MW to the national grid once completed over the next two years. We will soon announce the tendering. We are also in the last stages of the Kinyerezi plant from our natural gas, which should now inject 240MW next month and reach a peak of 3,000MW by 2022. We expect these power projects to be used to power the railway line,” a senior government official told The EastAfrican in an earlier interview. The region has turned to electric powered rails in a bid to increase efficiency, but questions abound on how these lines will be powered given the energy deficits individual countries face. Kenya dropped plans for electrification of the SGR line between Mombasa and Nairobi, citing its high costs and irregular power supply. Kenya Railways managing director Atanas Maina said that the preliminary research had shown inadequate demand for electric trains in Kenya coupled by higher cost and intermittent electric supply. “Electrifying this line also depends on our ability as a country to finance that kind of infrastructure. It was something that we would love to have,...

When Eritrea gained its independence from Ethiopia in 1993, Ethiopia became landlocked and therefore dependent on its neighbours – especially Djibouti – for access to international markets. This dependency has hampered Ethiopia's aspiration to emerge as the uncontested regional power in the Horn of Africa. Recently, however, the ground has been shifting. As we point out in a recent article , Ethiopia has attempted to take advantage of the recent involvement of various Arab Gulf States in the Horn of Africa's coastal zone to reduce its dependency on Djibouti's port. The port currently accounts for 95% of Ethiopia's imports and exports. It has done so by actively trying to interest partners in the refurbishment and development of other ports in the region: Port Sudan in Sudan, Berbera in the Somaliland region of Somalia, and Mombasa in Kenya. But it is Berbera, in particular, that will prove the most radical in terms of challenging regional power dynamics as well as international law. This is because a port deal involving Somaliland will challenge Djibouti's virtual monopoly over maritime trade. In addition, it may entrench the de-facto Balkanization of Somalia and increase the prospects of Ethiopia becoming the regional hegemon. Ethiopia's regional policy Ethiopia's interest in Berbera certainly makes sense from a strategic perspective. It is closest to Ethiopia and will connect the eastern, primarily Somali region of Ethiopia to Addis Ababa. It will also provide a much needed outlet for trade, particularly the export of livestock and agriculture. The development and expansion...