THE Zambian government must ensure that the hedging mechanism used in contracting concessional loans for infrastructure development is well managed, says the Development Bank of Southern Africa. And former British prime minister Gordon Brown says Africa needs to spend US $1.5 trillion to plug the continent’s infrastructure gap. DBSA managing director Patrick Dlamini said the Zambian government should ensure the hedging mechanism used in contracting concessional loans was well managed so that commercial viability of Zambia’s infrastructure projects is maintained in the face of continued currency volatility and imminent debt repayments. “I think what is important on the capital markets and Eurobond and sustainability of debt repayment by the countries is to try and manage the currency risks, especially if we were to raise bonds in euros and coming to fund a project inside Zambia. It has got to be well-managed to make sure that the commercial viability of the project is well protected,” he said during a press conference at the just-ended World Economic Forum on Africa 2015 in Cape Twon." Dlamini said investment in economic infrastructure was important if Zambia was to sustain its debt repayments because this was where revenues can easily be generated. “It is quite important that [investment] especially in economic infrastructure, [which] has the ability to generate their own revenues and hence can be able to serve the debt associated with the funding of this infrastructure,” added Dlamini. And speaking earlier, Brown told the media that Africa needs to increase its spending on infrastructure...

The East African Community (EAC) and the World Bank today hosted a convention to assess the challenges and opportunities in improving connectivity along key trading corridors to facilitate regional integration in East Africa. The Integrated Corridor Development convention, held at the UNESCO headquarters, brought together representatives from major bilateral and multi-lateral donor organizations, to discuss solutions to facilitate the funding of corridor development in land-locked countries, such as Burundi, Rwanda and Uganda. "In East Africa, high transport costs, poor infrastructure and underdeveloped logistics services limit the competitiveness and inhibit the integration of both the landlocked and transit countries into the regional and global market. Increasing the integration between the different modes of transport through development corridors can significantly improve connectivity and contribute to higher growth in the region," said Pierre Guislain, senior director for the World Bank's Transport and ICT Global Practice. The event comes as a follow up to the third EAC Heads of State retreat on infrastructure development and financing, held in Kenya in November 2014, where EAC leaders endorsed a strategy and action plan to improve the quality of service, and reduce the costs of transport, through developing better links between the different modes of transport along the key trading corridors of the region. The strategy, which the EAC Secretariat was tasked to implement, focuses on improving intermodality for freight transport along the Northern and Central Corridors, from the maritime ports to the inland lakes of Victoria and Tanganyika. "The EAC views the implementation of the Intermodal...

Djibouti’s President Ismail Omar Guelleh and Ethiopia’s Prime Minister Hailemariam Desalegn will attend the ceremonial laying of the last track Thursday in a 752-kilometer (467-mile) railway, financed and built by China, linking the port capital of Djibouti with landlocked Ethiopian capital Addis Ababa. The first scheduled train is expected to use the desert line in October, reducing transport time between the capitals to less than 10 hours, rather than the two days it currently takes for heavy goods vehicles using a congested mountain road. “Some 1,500 trucks use the road every day between Djibouti and Ethiopia. In five years, this figure will rise to 8,000,” said Abubaker Hadi, chairman of Djibouti’s Port Authority. “This is not possible, this is why we need the railway.” The new line is a restoration of an old one, built in 1917 by the Franco-Ethiopian Railway Company, that fell into disrepair and only worked erratically. With a capacity of 3,500 tonnes — seven times the capacity of the old line at its peak — the new electrified line will mainly be used for transporting goods to Africa’s second-most populous nation. Ethiopia’s economy is growing fast, with almost 90 percent of its imports going through Djibouti. Djibouti, the smallest country in the Horn of Africa, is embarking on large infrastructure projects, building six new ports and two airports in the hope of becoming the commercial hub of East Africa. Another new line linking Djibouti and the Northern Ethiopian town of Mekele is also planned, and that’s...

Sharm el Sheikh (Egypt) (AFP) – Senior African officials negotiating a trade deal in Egypt to create a common market across half the continent said Monday the pact was ready to be signed. The Tripartite Free Trade Area (TFTA) spanning 26 countries is to be launched at a summit of heads of state and government on Wednesday in the Red Sea resort town of Sharm el-Sheikh. The pact aims to set up a common framework for tariff preferences that would ease the movement of goods across the area’s member countries. The deal between the East African Community, Southern African Development Community and the Common Market for Eastern and Southern Africa would create a market with a population of 625 million and gross domestic product of more than $1 trillion (900 billion euros). “The deal is complete and ready to be signed by heads of state on Wednesday,” Peter Kiguta, the director general of the East African Community, told AFP. Trade ministers and officials gathered in the resort town from Sunday had worked out final concerns, including the management of disputes and protection for small manufacturers, he said. “All issues have been sorted out. Some technicalities remain but the overall agreement is now complete,” Kiguta said. Egypt’s Industry and Trade Minister Mounir Fakhri Abdel Nour said the agreement would be a “monumental step” for the continent. “It will bring together a united Africa,” he told delegates. “On top of that it will promote production and add value to our resources.” The...

Senior officials in Africa are poised to sign a milestone trade deal to create a common market that will span 26 countries across the eastern half of the continent — from Egypt in the north, to South Africa in the south, via Kenya. Heads of state will sign the Tripartite Free Trade Area (TFTA) pact on Wednesday in the Egyptian seaside resort of Sharm el-Sheikh, bringing five years of negotiations to a close. Once the agreement has been signed, the deal will still need to be ratified by the parliaments of each of the signatory states — a mere formality, according to Egypt's industry and trade minister Mounir Fakhry Abdel Nour, who described the final step as "simpler compared to the effort that has gone into preparing the document." Jean-Joseph Boillot, an advisor to the business club of international economics CEPII, said the deal is "a big step" for Africa. Speaking to VICE News Tuesday, Boillot explained that "the deal could potentially reconcile the 60s dream of a Pan-African nation with the financial interests of companies with an eye on the African market." The market today is "Balkanized," he said and customs barriers and trade restrictions actively discourage intra-African trade. The deal would convert three African trade blocs — the East African Community (EAC), the Southern African Development Community (SADC), and the Common Market for Eastern and Southern Africa (COMESA) — into a single customs union by 2017. The area covered by the agreement includes a population of 625 million...

The East Africa Legislative Assembly (EALA) has passed two crucial bills to facilitate free trade among East African Community member states. The bills will, however, have to be approved by the EAC heads of state before they can become law. Once they become law, the two pieces of legislation will compel partner states to eliminate barriers that have hindered smooth trade in the region. One of the laws, Elimination of Non-Tariff Barriers Bill 2015, seeks to establish a mechanism for identifying and monitoring the removal of non-trade barriers within partner states. Its passage comes against the backdrop of a surge in trade disputes arising from administrative measures deemed to be harmful to free trade in the region. The other proposed law, East Africa Community (EAC) Co-operative Societies Bill 2014, gives guidelines on the formation of co-operative societies as well as rights and duties of members. It also sets out rules on dispute settlement and dissolution of societies. The bill is based on the understanding that each partner state will encourage the efficient use of resources and promote the development of private sector organisations such as associations and agricultural outfits. This was revealed when Eala members visited Kiambu Governor William Kabogo at the county headquarters en route to Limuru for a one-day seminar at Thayu Hotel. Assembly chairman Kenya chapter Sauli Nkanae said the two proposed laws were expected to help promote fair trade among EAC member states. “We were at Brookside Dairy Limited yesterday where the officials told us that...

The East African Community (EAC) and the World Bank today hosted a convention to assess the challenges and opportunities in improving connectivity along key trading corridors to facilitate regional integration in East Africa. The Integrated Corridor Development convention, held at the UNESCO headquarters, brought together representatives from major bilateral and multi-lateral donor organizations, to discuss solutions to facilitate the funding of corridor development in land-locked countries, such as Burundi, Rwanda and Uganda. “In East Africa, high transport costs, poor infrastructure and underdeveloped logistics services limit the competitiveness and inhibit the integration of both the landlocked and transit countries into the regional and global market. Increasing the integration between the different modes of transport through development corridors can significantly improve connectivity and contribute to higher growth in the region,” said Pierre Guislain, senior director for the World Bank’s Transport and ICT Global Practice. The event comes as a follow up to the third EAC Heads of State retreat on infrastructure development and financing, held in Kenya in November 2014, where EAC leaders endorsed a strategy and action plan to improve the quality of service, and reduce the costs of transport, through developing better links between the different modes of transport along the key trading corridors of the region. The strategy, which the EAC Secretariat was tasked to implement, focuses on improving intermodality for freight transport along the Northern and Central Corridors, from the maritime ports to the inland lakes of Victoria and Tanganyika. "The EAC views the implementation of the Intermodal...

The African Union is looking to the Continental Free Trade Area (CFTA) to solve transportation problems and infrastructure issues, according to Nadir Fath Elalim from the African Union’s senior political office. Elalim told Daily News Egypt that one of the African Union’s projects is called “Free Space”, which includes three African airlines connecting the continent and will be achieved in 2022. “We are trying to address these issues together, and we’re going to reform other kinds of transportation, infrastructure and moving of goods,” Elalim added. “By implementing these kinds of projects, we show we have the plan. We have already outlined the Alexandria-Cape Town Road and the road from Alexandria to Sudan, Ethiopia and Djibouti.” In addition to this, a railway has been planned between Zambia and Angola , and one from Dakar to Djibouti as well, Elalim said, highlighting that the infrastructure programme is on the agenda . “It is not true that we don’t have transportation, but we don’t have a proper infrastructure to enable exports to move to other countries,” he confirmed. The African Union has been working on Agenda 2063 since 2013, outlining where Africa will be in the next 50 years. The agenda is broken down into 10-year plans, with the first 10-year plan, the Continental Free Trade Area (CFTA), to be launched in 2017. African countries are working in harmony with trade blocs, including ECCAS and ECOWAS, alongside COMESA, SADAK and the East African Community (EAC). Elalim added that all member states of the...

When Kenya, Uganda and Rwanda began the implementation of some of the projects under the East African Community (EAC), without the other partner states; Tanzania and Burundi, critics were already predicting doom for the bloc. The reasons forwarded by the leaders then was that time was of essence if the projects were to get off the ground. Those who were ready could proceed, the others could follow later. They were applying the variable geometry principle. Today, that wisdom is already paying off, especially as regards to the Northern Corridor projects that were being held back by lack of action or sense of urgency. That is why the leaders of the three countries decided to take personal supervision: they would meet every three months to access progress and give guidance. The summit that was held in Uganda this week went even further by setting up a special body that would exclusively fast track all projects. That is called acumen. If the projects were not getting the full attention of busy government officials, the only option was to go back on the drawing board and rearrange the pieces. That is called foresight. We cannot afford the luxury of falling behind on our schedules; we have the necessary manpower, so there is no need to dilly dally when crucial decisions have to be made. Source: All Africa

Senior African officials negotiating a trade deal in Egypt to create a common market across half the continent said Monday the pact was ready to be signed. The Tripartite Free Trade Area (TFTA) spanning 26 countries is to be launched at a summit of heads of state and government on Wednesday in the Red Sea resort town of Sharm el-Sheikh. The pact aims to set up a common framework for tariff preferences that would ease the movement of goods across the area's member countries. The deal between the East African Community, Southern African Development Community and the Common Market for Eastern and Southern Africa would create a market with a population of 625 million and gross domestic product of more than $1 trillion (900 billion euros). "The deal is complete and ready to be signed by heads of state on Wednesday," Peter Kiguta, the director general of the East African Community, told AFP. He said trade ministers and officials who had gathered in the resort town from Sunday had worked out final concerns, which had included the management of trade disputes and protection for small manufacturers. "All issues have been sorted out. Some technicalities remain but the overall agreement is now complete," Kiguta said. Egypt's Minister of Industry and Trade Mounir Fakhri Abdel Nour told delegates Monday that the agreement would be a "monumental step" for the continent. "It will bring together a united Africa," he said. "On top of that it will promote production and add value to our...