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

The inauguration of a $3.2-billion Chinese-funded railway, linking the port of Mombasa to the Kenyan capital Nairobi with future extension to the border with Uganda, promises to be a game changer. But only if sticky issues, such as harmonization of procedures and charges, in East Africa are sorted out. Being part of China’s “One Belt, One Road” initiative that targets to upgrade maritime and land trade routes between China and Europe, Asia and Africa, the potential benefits of the railway are huge – not just for businesses in Kenya but the region as a whole. With offers of haulage charges of $0.08 per ton per kilometer on Kenya’s new standard gauge railway (SGR), there is hope for bigger returns for businesses. For years they have had to endure the pain of costly road transport and equally expensive and unreliable service on a dilapidated railway system built by British colonialists more than a century ago. “Today, the cost of transport along the northern corridor accounts for up to 45 percent of the goods and services in the region. The high costs make it hard for businesses to compete effectively on both the global and the local markets. We expect these costs to reduce significantly with the SGR,” the Kenya Private Sector Alliance (KEPSA) says. Industry estimates show that hauling a 40-foot container from the port of Mombasa to the Ugandan capital, Kampala, by truck costs about $3,030 exclusive of handling and clearing fees – which captures why businesses long for cheaper options,...

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...

The capacity of the Port of Dar es Salaam will be increased to 25 million tons over the next seven years following the World Bank Board of Executive Directors’ approval of a $345 million credit and a $12 million grant to the new Dar es Salaam Maritime Gateway Project (DSMGP). The investments in the Port will also improve waiting time to berth from 80 hours to 30 hours as well as overall productivity. “The Port of Dar es Salaam is vital for the economies of Tanzania and neighboring countries,” said Bella Bird, World Bank Country Director for Tanzania who also oversees Malawi, Burundi and Somalia. “Enhancing its operational potential will boost trade and job creation across the region, and reduce the current cost of $200-400 for each additional day of delay for a single consignment.” The DSMGP is to be implemented as part of a larger ongoing investment program for the overall development of the Port of Dar es Salaam with the support of several development partners. The Government of Tanzania is contributing about $63 million through Tanzania Ports Authority, while Trade Mark East Africa is supporting improvements in the spatial and operational efficiency of the port currently, through the rehabilitation of access and egress roads and demolition and relocation of sheds. The United Kingdom through its Department for International Development (DFID) are also contributing a $12 million Grant. This support will co-finance the activities in the DSMGP, and further support is available for capacity building programs in institutions like...

Dar es Salaam. Tanzania Ports Authority (TPA) yesterday signed a new lease contract with Tanzania Internal Container Terminal Services Limited (Ticts). The agreement was signed less than a year after President John Magufuli directed TPA to review its contract with Ticts, saying it did not benefit the country. Speaking during a tour of Dar es Salaam Port last September, Dr Magufuli tasked the Minister of Works, Transport and Communication, Prof Makame Mbarawa, with overseeing talks between the two parties. Earlier last year, Controller and Auditor General Mussa Assad listed in his 2014/15 financial year report shortcomings in the contract, and advised the government to review the lease agreement “with a view to ensuring that public interests are protected therein”. Prof Mbarawa appointed a 12-member team of experts chaired by Mr Hamza Johari, who is also the Tanzania Civil Aviation Authority director general, to review the contract and advise the government on the way forward. Other members of the committee were drawn from TPA, Tanzania Intelligence and Security Services (TISS), Attorney General’s Chambers and the University of Dar es Salaam, among other institutions. Members included Prof Palamagamba Kabudi, who was later appointed Minister of Constitutional and Legal Affairs. TPA and Ticts originally signed a ten-year lease agreement in 2005. However, the lease period was irregularly and dubiously extended to 25 years in 2005, according to the CAG. The two sides yesterday signed a five-year contract pending a performance review. The CAG also raised a red flag on TPA’s decision to award...

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...